AA Shi Pty Ltd v Avbar Pty Ltd (No 5)

AA Shi Pty Ltd (AA Shi) filed a proceeding against Avbar Pty Ltd (Avbar) and others in the Federal Court of Australia, seeking relief related to an alleged breach of contract. The dispute involved allegations of breach of operation agreements and misconduct in the operation of service stations. The case reached the trial stage, but AA Shi failed to appear, leading to the dismissal of their claims under Order 32 rule 2(1)(c) of the Federal Court Rules. Additionally, the court addressed a cross-claim by Avbar, which sought a declaration that the operation agreements did not constitute "fuel re-selling agreements" under the Oilcode, and sought damages for alleged breaches of the agreements.

The primary legal issue before the court was whether the operation agreements between AA Shi and Avbar constituted "fuel re-selling agreements" as defined in the Oilcode. This definition includes agreements where a supplier grants a retailer the right to offer, supply, or distribute motor fuel under a system substantially determined by the supplier, among other criteria. The court also had to consider whether the agreements met the statutory requirements and whether there were breaches entitling Avbar to damages.

The court examined the nature of the agreements and the roles of the parties involved. It found that the agreements did not meet the statutory definition of "fuel re-selling agreements" as they lacked the supplier's substantial ongoing role in the retailer's operations beyond merely branding and supplying fuel. Consequently, the court held that the operation agreements did not constitute fuel re-selling agreements under the Oilcode. The court further found that AA Shi had breached the agreements by failing to pay licence fees and retaining money from fuel sales, entitling Avbar to damages.

The court ordered that the claims brought by AA Shi be dismissed, and all interlocutory restraints on Avbar be discharged. Additionally, AA Shi was ordered to pay Avbar's costs, including reserved costs related to the application. The court also declared that the operation agreements did not constitute fuel re-selling agreements under the Oilcode and ordered AA Shi to pay damages to Avbar for breaches of the agreements.