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SHELL GAS LANKA LTD.VSSAMYANG LANKA (PVT) LTD.COURT OF APPEAL.
SOMAWANSA, J (P/CA) AND.
DC COLOMBO 44032/MR.
AUGUST 26. 2005.
Interim injunction – Acting in breach of a covenant ■ No likelihood of any defence
■ Is it contrary to law to grant an injunction if it would give the plaintiff substantial
relief claimed by him?
It is permissible to grant interim relief which gave substantially the wholeof the relief claimed in the action, in a case where it was plainly seenthat there was no defence.
Here there is a strong prima facie case, in favour of the plaintiff and thebalance of convenience too favours the plaintiff and further there is nopossible defence available to the defendant and the defendant is actingin breach of a covenant; it is not contrary to law to grant'an interiminjunction, even if the granting of the interim injunction would give theplaintiff substantial relief claimed by him.
APPLICATION for leave to appeal from an order of the District Court of Colombo.
Cases referred to .
Jinadasa vs. Weerasinghe 31 NLR 33 at 35K
Richard Perera vs. Albert Perera (1963) 69 NLR 445
Woofard vs. Simit (1970) 1 ALL ER 1091
Dodd vs. Amalgamated Marine Workers Union
Baijley (Malta) Ltd. vs. Bailey
AG vs. Stocktoh on Tees Corpn
Heywoodvs. BDC Properties Ltd. (1963) .1 NLR 97
Booker vs. James
Manchester Corporation vs. Connoly and others (1970) Chancery 420
Shell Gas Lanka Ltd. vs Samyang Lanka (Pvt) Ltd. (Wimalachandra, J.)
S. De Silva for plaintiff – petitioner.
D. P. Wanigasundara for defendant – respondent.
September 21, 2005.
K. WIMALACHANDRA, J.This is an application for leave to appeal by the plaintiff petitioner (plaintiff)from the order of the learned Additional District Judge' of Colombo dated03.06.2005.
Briefly, the facts relevant to this application are as follows ;
The plaintiff is in the business of selling liquid petroleum gas (LPG)to consumers and for industrial use and the defendant has-been acustomer of the plaintiff. On 01.04.1999, the plaintiff and the defendantentered in to a contract (annexed to the petition marked ‘c’) in whichthe defendant agreed to purchase LPG from the plaintiff. In terms of thesaid contract the plaintiff installed a Bulk Gas Vessel and otherEquipment at the defendant's premises. The said Gas Vessel andother Equipment installed at the defendant's premises remain theproperty of the plaintiff. The plaintiff states that in breach of the termsand conditions of the contract marked ‘C the defendent failed to payfor the gas supplied to the defendent and also the rental fee due inconnection with the use of .the said Bulk Gas Vessel. Hence by letterdated 10.05.2004 marked ‘L’ the plaintiff terminated the said agreement.In terms of the said agreement marked ‘C’, it was agreed between theplaintiff and the defendant [clause X (C) (30)] that upon the terminationof the said agreement for whatever reason, the customer (defendant)shall permit the Company and its agents, representatives to enter thepremises and remove the Bulk Gas Vessel and Equipment and shallpay the Company all costs incurred for such removal. It is the plaintiff’sposition that although repeated requests were made, the defendantillegally and wrongfully in breach of the terms and conditions ofthe aforesaid agreement refused the plaintiff to enter thedefendant’s premises to remove the said Bulk Gas Vessel andEquipment. The plaintiff filed the aforesaid action in the DistrictCourt of Colombo inter alia for a declaration that the plaintiffis entitled to a sum of Rs. 595,130.16 together with interest thereon
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from 10th May 2004 at 24% from the defendant and thereafter on theaggregate amount of the Decree until the date of payment in full, adeclaration that the aforesaid Bulk Gas Vessel and Equipment are theproperty of the plaintiff and a declaration that the defendant and/or itsservants and/or agent and/or any persons acting directly or indirectlyunder the authority of the defendant has no right in law to prevent,obstruct, restrain or in any way interfere with the removal from thedefendant’s aforesaid premises the said Bulk Gas Vessel andEquipment. The plaintiff also sought an enjoining order and an interiminjunction in terms of paragraphs ‘d’ and ‘e’ of the prayer to the plaint.Paragraph (e) of the prayer to the plaint reads as follows :
“Until the matter of the permanent injunction is determinedissue an interim injunction against the defendant and/or itsservants and/or its agents and/or any persons acting directlyor indirectly under its authority from preventing, obstructing,restraining or in any way interfering with the plaintiff and/or itsagents and/or any persons acting under its authority fromremoving from the defendant’s aforesaid premises the saidBulk Gas Vessel and Equipment.”
With regard to the aforesaid interim injunction prayed for by the plaintiff,an inquiry was held and the learned judge pronounced the order on
refusing the grant of the interim injunction prayed for in theaforesaid paragraph (e) of the prayer to the plaint. It is against that orderthe plaintiff has filed this application for leave to appeal.
The plaintiff – petitioner has prayed for interim relief in terms of paragraph
of the prayer to the petition. It reads as follows :
“Make Interim Order pending the final determination of thisapplication against the respondent and/or its servants and/orits agents and/or any persons acting directly or indirectlyunder its authority from preventing, obstructing, restraining orin any way interfering with the petitioner and/or its agents and/or any persons acting under its authority from removing fromthe respondent’s aforesaid premises the Bulk Gas Vesseland Equipment installed in the Respondent’s premises.”
cA Shell Gas Lanka Ltd. vs Samyang Lanka (Pvt) Ltd. (Wimalachandra, J.)17
The Court directed the plaintiff to support the application for interimrelief after notice to the defendant. Accordingly, the notice was issued onthe defendant and the matter was taken up on 26.08.2005. The defendantwas represented by a counsel. At the inquiry both counsel agreed that theaforesaid Bulk Gas Vessel and Equipment belong to the plaintiff and itwas installed at the defendant’s premises. They further agreed that theaforesaid agreement has been terminated and that the aforesaid DistrictCourt action is pending in the District Court of Colombo. At the inquiry intothe application for interim relief, the main submission of the learned counselfor the defendant was that the plaintiff is not entitled to interim relief prayedfor in paragraph (d) of the prayer to the petition as the granting of theinterim order prayed for in the petition would give the plaintiff substantiallythe whole of the relief claimed in the petition. The interim relief prayed forin paragraph (d) of the prayer to the petition is the interim injunction prayedfor in paragraph (e) of the plaint, which was refused by the learned AdditionalDistrict Judge.
The question that arises for determination is, can the Court grant theinterim relief prayed for in the petition which is the interim injunction prayedfor by the plaintiff in paragraph (e) of the prayer to the plaint, which wouldgive the plaintiff substantial relief prayed for in this petition. This is theforemost and sole submission of the learned.counsel for the defendant.
It is the general practice that an interim injunction will normally not begranted if the granting will result in a decision of the main question involved.In other words, in deciding whether to grant or refuse the interim injunctionthe Court must not in effect decide the plaintiff’s main relief (vide- Jinadasavs Weerasinghe.' However, in the case of Richard Perera vs:Albert PereraPHNG Fernando, J. (as then he was) held that although the trial judgeshould not decide the substantive question in considering an applicationfor injunction, some consideration of the substantive question at this earlystage is not irrelevant.
The learned counsel for the defendant admitted that the said Bulk GasVessel and Equipment belong to the plaintiff. He also admitted that thesaid agreement entered into between the plaintiff and the defendant hasbeen terminated. As stated above, in terms of the agreement marked 'Cclause X (C) (3) states that upon termination, for whatever reason theCustomer (the defendant) shall forthwith permit the Company (the plaintiff)
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and its agents or representatives to enter the premises and remove theBulk Gas Vessel and/or Equipment and any Shell Gas remaining in thevessel and shall pay the Company all costs incurred tor such removal. Inthese circumstances it can be seen that the plaintiff is entitled to removeits Bulk Gas Vessel and Equipment. The interim relief prayed for by theplaintiff is for the removal of the said Bulk Gas Vessel and Equipmentinstalled in the defendant’s premises. As stated above, the learned counselfor the defendant admitted unequivocally, the said Bulk Gas Vessel andthe equipment belong to the plaintiff and the aforesaid agreement enteredinto between the parties has been terminated. Hence there is a strongprima facie case in favour of the plaintiff and the balance of conveniencetoo favours the plaintiff. I cannot see any possible defence available to thedefendant when he admits that the said Bulk Gas Vessel belongs to theplaintiff.
When it appears that there is no defence for the defendant and he isacting in breach of a covenant, it is not contrary to law to grant an interiminjunction even if the granting of the interim injunction would give the plaintiffsubstantial relief claimed by him.
In Woodford Vs. Smith? Megarry, J. made the following observation atpage 1093;
“Counsel for the defendant also read me a passage in theSupreme Court Practice 1970, which runs as follows :
“It is not the practice of the Court (except by consent) to grant onan interlocutory application an injunction which will have thepractical effect of granting the sole relief claimed (Dodd V.Amalgamated Marine Worker’s Union) This does not deter the Courtfrom granting such interlocutory injunction as may be necessary topreserve property to prevent irreparable damage.
When I ventured to assert that this did not represent the law, counselfor the defendants accepted that as being the case. I do not thinkthat there is anything to prevent the court in a proper casefrom granting on motion substantially all the relief claimed in theaction. It is true that in Dodd. V. Amalgamated Marine Worker’sUnion (supra) it was said in the Court of Appeal that it was not the
Shell Gas Lanka Ltd. vs Samyang Lanka (Pvt) Ltd.
‘usual practice’ or the ‘general1 rule of practice’ to grant on motionall the relief claimed in the action. But this language is generalrather than absolute, the judgments are very brief, no reasons aregiven, and there have been later decisions. Thus in Bailey (Malta)Ltd. Vs. Bailey Denning MR flatly said that it seemed to him thatthere was ‘no such rule’. In this, he based himself on what SargantLJ had said in A- G v Stockton-on-Tees Corpn where there is what Imay call a reasoned demolition of the supposed rule, the basis ofwhich seems to have been an objection to trying the same point'twice over. In the Bailey case, (supra) Harman.LJ referred to thesupposed rule as a theory which had in his view ‘long beenexploded” : see also Heywoodv B DC Properties Ltd.7 and BookerV.James.81 have ventured to refer to those authorities (which werenot discussed before me, since there was no need) because it istime that the passage in the Supreme Court Practice 1970 which Ihave read received the firm touch of a revising hand. Plainly in thepresent case the objection which counsel for the defendants raisedbut did not press is no obstacle to granting the injunction sought.”
In the case'of Manchester Corporation Vs. Connoly and Others, it washeld that there being, on the facts, no likelihood of any defence succeedingat the trial, the Vice Chancellor had been right in exercising his discretionto grant interlocutory relief in the form of the injunction.
At page 428, Lord Diplock made the following observation :
“The question argued in the appeal in Heywood’s Case waswhether it was permissible to grant interlocutory relief whichgave substantially the whole of the relief claimed in that action.
It was held that in a case where it was plain that there was nodefence, it was permissible to do so. In so far as argument, in thepresent case is based on the ground that the injunction givessubstantially the whole of the relief claimed in the action, thatcase in an answer to that contention”
The complaint of the plaintiff is that the defendant is wrongfully andunlawfully using the Bulk Gas Vessel to store LPG purchased from othersuppliers and this would cause immeasurable and irreparable damage tothe plaintiff. The counsel for the defendant admits that the said Bulk GasVessel is the property of the plaintiff and he makes no claim to the saidproperty. In the circumstances the granting of the interim relief prayed for
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in paragraph (d) of the prayer to the petition will not cause any irremediableloss or damage to the defendant. But on the other-hand refusal to grantthe interim relief would cause irremediable harm to the plaintiff. In thecircumstances when there is no defence forthcoming from the defendantto the application made by the plaintif, for interim relief in the form of aninjunction, I do not see there are reasons on which Court should refuse togrant interim relief.
Admittedly, the Bulk Gas Vessel and Equipment belong to the plaintiff.,Where there is clearly no defence to the claim for possession of the saidBulk Gas vessel and Equipment by the defendant an order for possessioncan b.e made in favour of the plaintiff as an interim order. Moreover, bygranting of the interim relief the Court is not giving the whole of the reliefclaimed by the plaintiff in the District Court action.
For these reasons the interim relief is granted as prayed for in paragraph
of the prayer to the petition and as a precautionary measure, it issubject to the condition that the said Bulk Gas Vessel and Equipmentremain to be the property of the plaintiff and the plaintiff shall keep the saidBulk Gas Vessel in good condition until the conclusion of the trial of thisaction or until further order is made by this Court. This order will not preventthe plaintiff from using it for any purpose.
Accordingly, I set aside the order made by the learned Additional DistrictJudge of Colombo dated 03.06.2005 and the application for interim reliefprayed for in paragraph (d) of the prayer to the petition is granted subjectto the aforesaid condition. I make no order as to the costs of this inquiry.
Somawansa, J. (P/CA) – / agree.Application allowed.