Ampol Ltd v Calaby Pty Ltd - [1991] FCA 427

Re: AMPOL LTD
And: CALABY PTY LTD
No. D G3 of 1991
FED No. 427
Trade and Commerce
30 FCR 426
(1991) 110 ALR 343

COURT

IN THE FEDERAL COURT OF AUSTRALIA

NORTHERN TERRITORY DISTRICT REGISTRY
GENERAL DIVISION
Spender(1), French(1) and Von Doussa(1) JJ.

CATCHWORDS

Trade and Commerce - Petroleum Retail Marketing Franchise Act - assignments - partnership franchisee - sale of service station business to company - partners controlling company - franchisor consents - whether assignment of agreement new arrangement or understanding - subsequent franchise agreement with company - whether agreement by way of renewal.

Petroleum Retail Marketing Franchise Act 1980

Supreme Court Act (NT) s.70

Fourth Report of the Royal Commission on Petroleum 1976

Caltex Oil (Australia) Ltd v. Best (1990) 97 ALR 217

Esso Australia Ltd v. R.I. and M.I. Abela (1989) 91 ALR 476

Beckford Nominees Pty Ltd v. Shell Co of Australia Ltd (1986) 73 ALR 373

Waltons Stores (Interstate) Ltd v. Maher (1988) 164 CLR 387

Foran v. Wight (1989) 168 CLR 385

Commonwealth v. Verwayen (1990) 170 CLR 394

HEARING

DARWIN

#DATE 25:7:1991

Counsel for the Appellant : Mr A. Wyvill

Solicitors for the Appellant : Mildrens

Counsel for the Respondent : Mr P. Tiffin

Solicitors for the Respondent : Cridlands

ORDER

The Court orders that the appeal be allowed.

The order of Angel J. made 12 September 1990 be set aside.

The matter be remitted to the learned trial judge to determine according to law whether any further orders are necessary and appropriate.

The respondent pay the appellant's costs of the appeal and of the proceedings before Angel J.

Note: Settlement and entry of Orders is dealt with in Order 36 of the Federal Court Rules.

JUDGE1

Introduction

The Ampol Stuart Park Service Station in Darwin has been operated by Calaby Pty Ltd, a company controlled by Cleve and Leanne Kumnick, since 1 July 1986. Before that time the Kumnicks carried on the business themselves as a partnership. Franchise agreements entered into in 1987 between Calaby and Ampol Ltd, the owner of the site, expired on 31 July 1990. Ampol advised the company in 1989 that it did not intend to renew the agreements and that Calaby would be required to vacate the site upon their expiry. Calaby maintained that Ampol was obliged to renew the agreements by virtue of the provisions of the Petroleum Retail Marketing Franchise Act 1980. It said in essence that the agreements it entered with Ampol in 1987 were fresh or original franchise agreements attracting a statutory entitlement to renewal for two successive terms of three years. Ampol contended that the 1987 agreement was a renewal of a pre-existing franchise agreement and that upon its expiry there was no further statutory entitlement to a renewal. Calaby brought proceedings against Ampol in the Supreme Court of the Northern Territory and obtained a declaration that the agreements were not entered into by way of renewal for the purposes of the Petroleum Retail Marketing Franchise Act 1980. The Court also…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [1991] FCA 427
Decision Date: 25 JULY 1991

CaseChat Overview and Summary

Ampol Ltd appealed against a decision of Angel J. which found that a subsequent agreement entered into with Calaby Pty Ltd, a company controlled by the former partners of a partnership, was an assignment of an existing franchise agreement without the franchisor's consent, and therefore in breach of the Petroleum Retail Marketing Franchise Act. The original franchise agreement was with a partnership, and the partners subsequently sold their service station business to Calaby Pty Ltd, a company they controlled. The franchisor had consented to the original assignment of the franchise agreement to the partnership. The issue for determination was whether the subsequent agreement between the franchisor and Calaby Pty Ltd was a new arrangement or understanding, or whether it was a renewal of the existing franchise agreement.

The Court found that the subsequent agreement was not an assignment without consent, as the trial judge had determined. The Court found that the evidence showed that the agreement was by way of renewal, and not a new arrangement or understanding. The Court found that the partnership had effectively ceased to exist, and the company had taken over the business and assets of the partnership, including the franchise agreement. The Court found that the franchisor had not objected to the sale of the service station business to the company, and had dealt with the company as the franchisee from the outset. The Court found that the subsequent agreement was a renewal of the existing franchise agreement, and not an assignment without consent.

Accordingly, the Court allowed the appeal, set aside the order of Angel J., and remitted the matter to the trial judge to determine whether any further orders were necessary and appropriate. The Court also ordered that the respondent pay the appellant's costs of the appeal and of the proceedings before Angel J.

Orders

Orders of the court

The Court orders that the appeal be allowed.

The order of Angel J. made 12 September 1990 be set aside.

The matter be remitted to the learned trial judge to determine according to law whether any further orders are necessary and appropriate.

The respondent pay the appellant's costs of the appeal and of the proceedings before Angel J.

Note: Settlement and entry of Orders is dealt with in Order 36 of the Federal Court Rules.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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