Chuan Hong Petrol Station Pte Ltd v Shell Singapore (Pte) Ltd

• Jurisdiction: Singapore
• Judge: Chan Sek Keong J
• Judgment Date: 30 April 1992
• Neutral Citation: [1992] SGCA 35
• Date: 30 April 1992
• Subject Matter: Owners terminating licence because of fire hazard,Court cannot compel one party to perform obligations when other party cannot perform his,Licence to operate petrol station,Contract to supply petrol,Principles for granting,Mandatory and prohibitory injunctions,Civil Procedure,Whether owners should be restrained from repossessing station,Whether evidence of promissory estoppel admissible,Interlocutory injunction,Injunctions,ss 93 & 94 Evidence Act (Cap 97),Parol evidence rule,Contract,Contractual terms
• Docket Number: Civil Appeal No 23 of 1989
• Published date: 19 September 2003
• Defendant Counsel: Wong Meng Meng and Sundaresh Menon (Shook Lin & Bok)
• Court: Court of Appeal (Singapore)
• Plaintiff Counsel: Joseph Ang and Mark Lim (Lee & Lee)

The appellants were operators of a petrol-filling station at Coronation Shopping Plaza, Bukit Timah Road, owned by the respondents. They occupied and operated the station under a filling station operating licence (`the operating licence`) granted by the respondents. Motor fuels and other products were supplied by the responunder a resellers` bulk motor fuels contract (`the supply contract`).

Arising from certain events taking place at the station on 12 August 1988, to be more fully described later, the respondents terminated the operating licence and later stopped supplying fuels and other products to the appellants. The appellants commenced action against the respondents and made an application by Summons No 5779 of 1988, which, as subsequently amended, was for:

(a) an interim injunction restraining the respondents from repossessing the station and compelling the respondents to perform and observe the terms of the operating licence;

(b) an order restraining the respondents from withholding supplies of motor fuels and other products in accordance with the terms of the supply contract;

(c) an order compelling the respondents to maintain and repair pumps accessand related equipment.

As the appellants failed to vacate the premises after the termination of the licence, the respondents made an application of their own for an order restraining the appellants from continuing to remain in occupation of the premises.

Lai Kew Chai J had, in September 1988, dismissed the appellants` summons in its original terms. The appellants asked to present further arguments, and in the course of the further arguments, the summons was amended. The respondents` application was heard at the same time as the further arguments on the appellants` summons. On 23 March 1989, Lai Kew Chai J dismissed the appellants` application as amended. He granted the respondents the injunction they sought, upon the usual undertaking as to damages and the further undertaking by the respondents not to appoint another dealer to the filling station but to operate it themselves. Lai Kew Chai J refused a stay of his orders pending the appeal.

From these decisions, the appellants brought this appeal. We heard the appeal and dismissed it. We now give our reasons.

The facts

The history of this station starts in 1951, when the respondents granted a licence to operate a station on this site to Chen Chin Feng, trading under the name Chuan Hong & Co. Chen was the uncle of Mr Tan Yeow Seng, a director of the appellants. This station, consisting of a vehicle service bay and other facilities, as well as a petrol-filling station, was larger than the station with which we are concerned. In 1976, the respondents conveyed the site to Goldhill Properties for redevelopment with an adjacent plot of land into the Coronation Shopping Plaza. The then current operating licence, dated 27 April 1970, (`the 1970 operating licence`) was terminated with effect from 1 December 1976.

The original station was demolished and a smaller station was erected as part of the shopping development. When the new station was ready some four years later, Chuan Hong & Co were reappointed as dealers, and a new operating licence and supply contract were concluded on 19 May 1980.

In 1984, Chuan Hong & Co were converted to Chuan Hong Petrol Station Pte Ltd, the present appellants, who then took over Chuan Hong & Co`s business of operating the station.

The contractual framework

It was not disputed that the contractual relations between the parties were governed by the operating licence and the supply contract, the appellants being treated as successors to Chuan Hong & Co.

The operating licence was in the form of an agreement between the parties. It gave the appellants the right to enter upon the land on which the station stands and to make use of the station for the sole purpose of marketing the respondents` petroleum products. Under it, the respondents were obliged to maintain the station and its accessories in good repair.

Clause 12 was an important clause in this case. It allowed the respondents to determine the operating licence forthwith if the licensee should commit any of the acts listed in that clause. In particular, cl 12(d) allowed the respondents to terminate if the licensee

... shall do any act which is or may be detrimental to the interests of the company and for this purpose the company shall be the sole judge as to the doing and effect of such act.

Clause 15 provided as follows:

The company may in its discretion and without assigning any reason therefor forthwith determine this agreement without notice and thereupon the company shall pay to the licensee a sum equivalent to the difference between the wholesale and retail prices on the sale of motor fuels made by the licensee from the licensed premises during a period of one calendar month immediately preceding such determination and the licensee shall not be entitled to any further sum by way of damage (sic) or otherwise.

Clause 11 provided as follows:

At the expiration or sooner determination of this licence for whatever reason the licensee shall peaceably and quietly quit the licensed premises and shall not thereafter re-enter upon the licensed premises without the company`s consent.

The 1970 operating licence had printed terms identical to those of the 1980 licence. The 1970 operating licence was, however, stated to be from 1 January 1970 to 31 January 1970, and thereafter from month to month, whereas in the 1980 licence no commencement date was inserted in the blank spaces provided. As the new station was only a filling station, the 1980 licence was headed ` Filling station operating licence` while the 1970 licence was headed ` Service/Filling station operating licence`.

The supply contract

The supply contract governed the sale of motor fuels by the respondents to the appellants and their resale by the appellants. The appellants were described as the buyers and the respondents were described as the sellers. Clause 1 read:

Buyers have this day bought of the sellers for delivery during the period . . . the whole of their requirements of motor fuels (motor spirit and automotive gas oil/diesel fuel) for all purposes and agree that after the expiry of the said period they will unless and until this agreement shall be determined by either party giving to the other one month`s previous notice on (sic) writing of determination purchase the whole of their requirements of motor fuels for all purposes from sellers.

The first part of the clause was left blank presumably because it was for some reason inapplicable when the contract was made. This makes the clause somewhat incomplete, but nothing turned on this, as it was conceded by the respondents that the supply contract was not formally terminated, either in pursuance of cl 1 or otherwise.

Clause 2 provided that the respondents shall give and the appellants shall take delivery at pumps installed at the station. By cl 12, the appellants agreed not to sell motor fuels other than those of the respondents. By cl 10, the respondents had the right to stipulate the resale prices of the motor fuels supplied.

The background

Among the more traditional sections of the non-Christian Chinese population in Singapore, it is believed that the seventh month of the lunar calendar is the month of the hungry ghosts. The ghosts are appeased by offerings of food. The ceremony calls for placing items of food on an altar table. Candles are lighted, and the praying is done with lighted joss sticks. At the conclusion of the ceremony, joss paper is burned.

For some time before the event giving rise to this suit, the Director of Fire Service, as the regulatory authority in relation to the storage of petroleum products in Singapore, had been concerned about the danger posed by petrol station operators and their staff engaging in the performance of the prayer ceremonies just described. The director issued letters of warning to the major oil companies in Singapore, including the respondents, and the respondents in turn issued similar warnings to their dealers, including the appellants. The respondents exto their affidavit copies of letters of warning they received from the director about cigarette smoking and the holding of the seventh month prayer ceremonies, and their own letters of warning to their dealers. These letters were all in clear terms, warning of the danger posed by these activities, and, in the case of the letters from the respondents to their dealers, warning of the cancellation of their licences and the possibility of their status as dealers being affected. The appellants did not deny the receipt of such letters of warning. They said they received many letters from the respondents and they could not remember whether they received these particular ones.

The triggering event

On 12 August 1988, the first day of the seventh lunar month, Tan Yeow Seng and his staff, true to a long-standing custom, went about the prayer activities described above. Two tables were joined together to serve as the altar table. In his own words:

On the altar table, we had placed all the usual offerings. I placed two small red candles with wooden legs into a sand-filled metal container. I lighted [sic] the two candles, then I prayed with three lighted joss sticks. Before I could place the three joss sticks into the metal container the two candles had been blown off due to the strong breeze that day. No effort was made to light the candles again because of the strong wind.

Mr Tan Yeow Seng was interrupted in his prayer by Francis Ong, the auto market development manager of the respondents, who was taking a colleague from England around their stations on a survey in preparation for a regional merchandising seminar to be held in Singapore. After they left, Mr Tan Yeow Seng said he finished off his prayer by burning joss paper by the side of Coronation Road away...