NGC ENERGY SDN BHD v 1. ) KALSOM BINTI MUHAMAD 2. ) Goo (Goh) Say Dock berniaga sebagai PUSAT PEMBEKAL GAS BUDIMAN CERGAS [Business Registration No.: JM0192279-H] 3. ) berniaga sebagai PUSAT PEMBEKAL GAS BUDIMAN CERGAS

Case Significance

A detinue and unlawful-interference dispute over LPG gas cylinders decided against the backdrop of the recognised industry practice of cylinder exchange and buy-back, with an assessor-based valuation of serviceable, reconditionable and scrap cylinders and a limited counterclaim allowed.

This High Court (Muar) decision follows a full trial of a dispute in the liquefied petroleum gas (LPG) industry between an LPG supplier and its distributors. The plaintiff supplies LPG under one brand, while the defendants, trading as a gas supply centre, distribute LPG under a different brand. The plaintiff discovered that more than 200,000 of its gas cylinders were being kept at the defendants' premises, and it sued for wrongful detention of the cylinders based on the tort of detinue, seeking an injunction for delivery up of the cylinders, damages for unlawful interference with trade, and compensation for loss of profits. The defendants counterclaimed for transportation charges, storage costs, security charges and damages in the event the interim injunction were set aside.

A central issue was the existence and effect of an industry practice concerning the exchange and buy-back of cylinders, a practice recognised in the reported decision Solar Gas Sdn Bhd v NGC Energy Sdn Bhd. The court examined whether, in light of that practice, the plaintiff had an immediate right to possession of its cylinders, whether the industry practice vitiated the claim for unlawful detention, and whether the defendants had shown any intent to injure the plaintiff by interfering with its trade. It also considered whether the defendants had proven their counterclaim for transportation, storage and security costs, having regard to the mechanisms of the industry practice.

In its disposition the court made orders requiring payment to the plaintiff for the serviceable cylinders, those requiring requalification or reconditioning, and those to be scrapped, at prices to be determined by an assessor on an agreed basis, with interest at 5% per annum from the date of judgment. The defendants' counterclaim was allowed for the sum of RM34,946 with interest at 5% per annum from 1 September 2022 until full realisation, the cost of the assessor to be shared equally, and each party to bear its own costs.