UDL Marine (Singapore) Pte Ltd v Jurong Town Corp

Kan Ting Chiu J:

[1] The plaintiff, UDL Marine (Singapore) Pte Ltd (“UDL”), had sued the defendant, Jurong Town Corporation (“JTC”). Pending the disposal of the action, UDL applied for an interim injunction against JTC. I dismissed UDL’s application, and UDL has appealed against my decision.

[2] UDL has operated a shipyard on premises at Benoi Road, Singapore (“the premises”) since 1991. The premises were leased from JTC. The lease was scheduled to expire on 31 December 2010. UDL had wanted to renew the lease, but JTC refused to renew it.

[3] On 21 July 2010, UDL filed these proceedings against JTC to seek a declaration that JTC is estopped from refusing to renew the lease or granting a new lease of the premises for a period of not less than 20 years; for an order of specific performance for JTC to renew or grant a new lease; and for damages.

[4] On 16 September 2010, UDL filed a summons for an interim injunction to restrain JTC from leasing out the premises to any other party pending the final determination of the action and an order that UDL be permitted to lease, occupy and enjoy exclusive use of the premises upon payment of the current rent or the rent at the market rate.

[5] The action and the summons were based on the same alleged facts which were set out in the Statement of Claim in this action and the affidavit of Leung Yat Tung, Managing Director of UDL, dated 16 September 2010 which was filed in support of the summons (“the supporting affidavit”). The allegation was essentially that representations were made to UDL that the lease of the premises might be renewed.

[6] UDL’s case was that in December 2004, it understood that the lease would not be extended beyond 11 December 2010 as JTC had plans to re-develop the Tuas area. However in February 2005, UDL received information from Sidat Senanayake, an officer of the Economic Development Board (“EDB”). The information was narrated in the supporting affidavit and incorporated in paras 8 to 13 of the Statement of Claim and was characterised by UDL as representations:

[7] In paras 14 to 15 of its Statement of Claim, UDL alleged that the representations were made with JTC’s knowledge and/or consent and stated that it relied on the representations and re-structured its shareholdings so that it became the subsidiary of UDL Holdings Ltd, a company listed on the Stock Exchange of Hong Kong, produced business plans at the request of the EDB, and held concurrent discussions with the EDB and JTC.

[8] Paragraphs 17 and 18 of the Statement of Claim disclosed the process by which UDL drew its conclusions on the events:

[9] There was something else that was brought up after the Statement of Claim was filed and the parties had filed their affidavits in connection with the application. In para 20 of its skeletal submissions dated 3 November 2010, UDL referred to an email from Ernest Tay of JTC to his colleague Karen Lee dated 20 December 2005, that:

The email had not been referred to in the Statement of Claim or the supporting affidavit, and the full text of the email was not set out. After quoting that portion of the email, UDL submitted that “[t]here is no evidence whatsoever that Ms Karen Lee or any other officer of the Defendant had in fact told EDB to stop sending the “wrong signal or message” to the Plaintiff” and it was submitted that “[t]he email suggests that representations of the nature alleged by the Plaintiffs were in fact made.” I find, on my reading of the email, no indication that the JTC had made or authorised any representations that may have been made by EDB, and that JTC had not made any decision to renew the lease and did not share or agree with EDB’s perceived support for a renewal.

[10] UDL’s case is stated in its Statement of Claim and its skeletal submissions to be founded on proprietary estoppel flowing from the alleged representations. It is therefore important to look at the parties’ positions on the representations.

[11] UDL’s position has been set out in the foregoing paragraphs. For JTC, Loh Yew Pong, a Deputy Director of its Aerospace, Marine and Cleantech Cluster, filed an affidavit on 15 October 2010. He stated in clear terms in his affidavit that EDB is not the agent of JTC:

[12] Sidat Senanayake also deposed an affidavit. He stated that he was an officer of the EDB from July 2003 to August 2007, first as a Senior Officer of the Industry Promotion Division and then as Assistant Head of the Logistics and Transport Cluster from April 2007. He deposed that:

[13] The principles on which interim injunctions are to be granted are set down in American Cyanamid Co v Ethicon Ltd [1975] AC 396 (“American Cyanamid”) at 407 and 408 by Lord Diplock. The first principle is:

At this stage, the court will not endeavour to resolve conflicts of evidence, and will accept the claim at face value:

[14] The second principle is that if the court is so satisfied:

The balance of convenience is determined on the basis that:

but:

[15] The first requirement for a serious question to be tried or the real prospect of success was expanded on and explained in In re Lord Cable, Decd. Garratt and Others v Waters and Others [1977] 1 WLR 7 (“In re Lord Cable, decd”) at 19 and 20 by Slade J:

and this exposition of the requirement has been adopted in subsequent cases when the first principle was applied. The portion of Slade J’s judgment which I have italicised was cited with approval in the Court of Appeal’s decision in Middlebrook Mushrooms Ltd v Transport and General Workers’ Union and Others [1993] ICR 612 by Hoffmann LJ. Slade J’s judgment was referred to and followed more recently in Novartis AG v Dexcel-Pharma Ltd [2008] FSR 31.

[16] It is clear from American Cyanamid and In re Lord Cable, decd that an applicant has to go beyond pleading a course of action to obtain an interim injunction. The applicant has to present the material or evidence to show that it has a real prospect of succeeding in its action. This is necessary because it takes little to raise a serious question for trial. An applicant has to establish a connection between the facts in his case and the question for trial because there can be no entitlement to any relief on the latter without the former.

[17] When I applied the “real prospect of succeeding” test, I dealt with the material and evidence with care. I took the material and evidence presented by UDL at face value, as the sum of its case at the present stage of the proceedings. I was, however, more restrictive in the treatment of the evidence of JTC, and only looked for admissions which supported UDL’s application or unrebutted refutations of any of UDL’s allegations, and I did not find any such admissions or refutations. I took this approach in view of Lord Diplock’s caution in American Cyanamid that:

[18] When the material and evidence presented by UDL were examined, it was clear that:

(a) UDL had not produced any contemporaneous note or record of the alleged representations;

(b) UDL did not verify with Sidat Senanayake, EDB or JTC at the time of the alleged representations that Sidat Senanayake was speaking on behalf of JTC when he made the alleged representations even though UDL had concurrent discussions with EDB and JTC on the renewal of the lease;

(c) UDL misunderstood (or misrepresented) JTC’s request that UDL submits a formal application for the renewal of the lease to be a representation that the lease renewal was a matter of formality;

(d) as late as 26 May 2005, at the end of the period when the alleged representations were made by Sidat Senanayake (see para 6 supra), he only stated that JTC was “agreeable to consider” UDL’s request to extend the lease; and

(e) when UDL received JTC’s letter of 20 November 2009 that the lease will not be renewed, it did not protest and remind JTC of the alleged representations.

[19] The material and evidence presented by UDL did not disclose that UDL has a real prospect of succeeding in its claim on proprietary estoppel. Consequently, the application, as Slade J noted, must fail in limine and the question of balance of convenience will not fall to be considered. I therefore dismissed the application and ordered that there be an expedited trial of the action.

[20] As my decision is under appeal, I will also deal with the second principle relating to the balance of convenience, first on whether damages would be an adequate remedy for UDL.

[21] UDL contended in the supporting affidavit and its written submissions that damages would not be an adequate remedy because on its business plans, UDL expects to earn approximately $40 million in gross profits a year, and that even without the expanded activities contemplated in the business plan, it would earn about $1.8 million a year if it continued with its existing business activities. UDL also submitted that if it was denied a renewal of the lease, it would have to relocate its business, and that would result in a loss of its customers, goodwill and reputation which would be difficult to quantify.

[22] Quite inexplicably, JTC did not respond to that submissions, but that did not mean that I should accept the submissions without examination. It is quite clear that the cessation of the lease would affect UDL’s ability to carry on its business, unless it secured alternative premises, and it would be difficult to find premises of similar attributes in terms of location and size. In addition to that, if UDL is able to find alternative premises, and relocates its business operations, then it would be in the ironic position that if it succeeds in its claim it may not want to return to the premises because it may not require two sites for its operations.

[23] It is apparent that if UDL succeeds in its claim, the quantification of its loss for lost income, goodwill and reputation would be contentious and difficult. In addition to that, monetary damages cannot adequately redress the effect of a forced relocation. For these reasons, I agree with UDL that damages would not be an adequate remedy.

[25] In conclusion, I dismissed the application because UDL failed to show that its claim in proprietary estoppel had a real prospect of success. If it had a real prospect of success, its application would have been granted as it satisfied the second requirement for an interim injunction.