#6683 - Sky Petroleum V. Vip Petroleum - Commercial Remedies BCL

Facts

This is a motion for an injunction brought by the plaintiff company, Sky Petroleum Ltd., as buyer under a contract dated March 11, 1970, made between the defendant company, VIP Petroleum Ltd., as seller of the one part and the plaintiffs of the other part. That contract was to operate for a period of ten years, subject to certain qualifications, and thereafter on an annual basis unless terminated by either party giving to the other not less than three months’ written notice to that effect. It was a contract at fixed prices, subject to certain provisions which I need not now mention. Further, the contract obliged the plaintiffs — and this is an important point — to take their entire requirement of motor gasoline and diesel fuel under the contract, with certain stipulated minimum yearly quantities. After the making of the agreement, it is common knowledge that the terms of trade in the market for petroleum and its different products changed very considerably, and I have little doubt that the contract is now disadvantageous to the defendants. After a long correspondence, the defendants, by telegrams dated November 15 and 16, 1973, have purported to terminate the contract under a clause therein providing for termination by the defendants if the plaintiffs fail to conform with any of the terms of the bargain. What is alleged is that the plaintiffs have exceeded the credit provisions of the contract and have persistently been, and now are, indebted to the defendants in larger amounts than were provided for.

What I have to decide is whether any injunction should be granted to protect the plaintiffs in the meantime. There is trade evidence that the plaintiffs have no great prospect of finding any alternative source of supply for the filling stations which constitute their business. The defendants have indicated their willingness to continue to supply the plaintiffs, but only at prices which, according to the plaintiffs’ evidence, would not be serious prices from a commercial point of view. There is, in my judgment, so far as I can make out on the evidence before me, a serious danger that unless the court interferes at this stage the plaintiffs will be forced out of business. In those circumstances, unless there is some specific reason which debars me from doing so, I should be disposed to grant an injunction to restore the former position under the contract until the rights and wrongs of the parties can be fully tried out.

Specific and Unascertained Goods – Departure – Damages are not an adequate remedy

Now I come to the most serious hurdle in the way of the plaintiffs which is the well known doctrine that the court refuses specific performance of a contract to sell and purchase chattels not specific or ascertained.

However, the ratio behind the rule is, as I believe, that under the ordinary contract for the sale of non-specific goods, damages are a sufficient remedy. That, to my mind, is lacking in the circumstances of the present case. The evidence suggests,...