Chenoa Pty Ltd v Shell Company of Australia Limited, The
[1988] FCA 168
•13 Apr 1988
FOR LIMITED DISTRIBUTION CATCHWORDS
Franchise agreement for distribution of petroleum products - Petroleum Retail Marketins Franchise Act (1980) previously held to be excluded from application to subject premises by
operation of 1984 amendment - period during which Act
inapplicable to premises held to commence on coming into operation of amending Act - claim for possession of premises
- nature of distributor’s right to occupy premises - how
determinable - whether Court has discretion to decline to make an order for possession or postpone its operation - discretion to grant declaratory relief.
Petroleum Retail Marketins Franchise Act 1980 (Cth) ss. 3, 6 ( 1D)
Petroleum Retail Marketins Sites Act 1980 (Cth) ss. 3, 7, 11 No. VG 273 of 1985
FOR LIMITED DISTRIBUTION
.
IN THE FEDERAL COURT OF AUSTRALIA 1 ) VICTORIAN DISTRICT REZISTRY
) No. VG 273 OF 1985 ) GENERAL DIVISION )
m: CHENOA PTY. LTD
(Applicant)m: THE SHELL COMPANY OF AUSTRALIA LIMITED
(Respondent)
Coram: Ryan J.
W: 13 April 1988 Place: Melbourne
In a judgment delivered on 10 March 1988 I indicated my
reasons for concluding that the applicant is not entitled, in respect of its tenure of premises comprising a transport refuelling terminal at 542 Footscray Road, West Melbourne, to
the protection afforded by the Petroleum Retail Marketinq
Franchise Act 1980 as amended, ("the Franchise Act").
However, there remain for consideration the form of order which should be made disposing of the application and the respondent's cross-claim for possession of the premises.
The amended cross-claim of the respondent ("Shell"), as
further amended pursuant to leave granted by me on 25 March 1988, referred to and repeated relevant paragraphs of its amended defence and concluded with the following paragraphs:-
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"28. Insofar as the cross-claimant was required
to serve a notice on the cross-respondent to quit
or deliver up possession of the premises, it didso by letter dated 11 December 1985 from its
solicitors to R.J. Clemente, the then solicitor for the cross-respondent.
AND THE CROSS-CLAIt4AN!r CLAIMS:
1. Possession of the premises.
2. Such other and further relief as the Court sees fit.
3. Costs. "
The defence to cross-claim filed on behalf of the
applicant ("Chenoa") comprised the following contentions:-
1. The Cross-Respondent is in possession and relies upon its possession.
2.
Upon the true construction of S.6(1D) and in
the events which have happened, the Cross-Respondent retains protection of the provisions of the Franchise Act on and after the 1st January, 1985, and the Cross-Claimant
is prevented from enforcing any rights given
in the Judgement of the 10th March, 1988 until the Cross-Respondent has been afforded
proper notice of hearing to permit it to
answer the claim for possession or to permit
it to mitigate or modify the terms of an
Order for Possession that might be made.
3 . The Cross-Claimant has not served upon the
Cross-Respondent anotice requesting the Cross-Respondent or other person for the time
being entitled to possession to quit and deliver up possession of the premises."
To paragraph 3 of that pleading, Shell, by paragraph 3
of its reply to defence to cross-claim amended pursuant to leave granted by me on 25 March 1988, responded as follows:-
"3. In respect of paragraph 3 thereof it says as
follows :
(a)
it says the Cross-Claimant is not required to serve a notice upon the Cross-Respondent to quit or deliver up possession of the premises
(b)
in any event, the Cross-Claimant has served upon the Cross-Respondent a notice demanding possession of the premises namely -
(1) by the said letter dated 11th
December 1985 from the solicitors
for the Cross-Claimant to R.J.
Clemente, solicitors for the Cross-Respondent; (ii)by the issuing and service of a Writ issued on the 16th day of December 1985 in the Supreme Court of Victoria action No. 5062 of 1985 between the Cross-Claimant as Plaintiff and the Cross-Respondent
as Defendant. ' I
The consignment distributor agreement between Shell and
Chenoa dated 11 September 1981 has been described in some detail in my reasons for judgment of 10 March 1988. In addition to the clauses there set out, it contained, amongst others, the following provisions:-
"3. (a) The Distributor shall use the Distributor Depot for the purpose of the Distributor
and hold out the same as a Distributor Business and ostensibly maintain manage Depot of Shell by the prominent display
thereon of Shell's Identifications.(b) Where the Distributor Depot is owned or leased by Shell the Distributor and Shell shall each observe and comply with their respective agreements in relation to the Distributor Depot as set out in the Schedule. 4. Where applicable, a licence fee shall be payable by the Distributor to Shell in respect of the occupancy of the Distributor
Depot and the use of the Equipment and such fee shall be as shown in the Schedule under the heading 'Licence Fee'. The Distributor
and Shell shall each comply with eir
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respective obligations as set out under the heading ‘Manner of Payment of Licence Fee‘ in the said schedule...
11. The Distributor shall permit any authorised
representative of Shell at any time to have access to and examine and measure and count stocks and inspect all property, records, accounts, books, papers, letters and
documents relating to he Distributor Business and will afford the representative every facility for so doing ...
19. Where the Distributor Depot is owned or
leased by Shell the Distributor shall not store in the Distributor Depot any fuels other than Shell fuels...
21. The Distributor shall not at any time hereafter without the consent in writing of Shell assign transfer or in any manner make over the present Agreement to any person or persons whomsoever...
24. The Distributor acknowledges that all plant
and equipment and dvertisements and advertising materials (hereinbefore defined
as ‘Equipment’) supplied and which may be
supplied by Shell whether at the commencement
of this Agreement or during the currency
hereof (including the items listed under the
heading ‘Specified Equipment’ in the
Schedule) are and will remain the property of Shell, unless written notice to the contrary is given by Shell, and the Distributor agrees on demand by Shell to return the Equipment to Shell in good order and condition, ordinary depreciation and fair wear and tear excepted, and to pay for and compensate Shell for any
loss and any damage thereto other than as expected. The Distributor shall promptly notify Shell of any defect in the Equipment or the working thereof. The Distributor agrees not to move the Equipment from the
position in which it is installed at the
Distributor Depot without the consent in
writing of Shell and also not to use the same
for any purpose other than is necessary to
carry out the Distributor Business, and
further, should computer equipment (as listed
in the Schedule and hereinafter referred to
as ‘the computer equipment’), be included
within the Equipment then the Distributor
agrees: that the computer equipment shall be
operated only by him or his employees in
accordance with procedures established by
Shell and for purposes approved by Shell and
that no additional computing equipment will
be acquired for use in conjunction with the
computer equipment without Shell's prior
agreement in writing. Where Shell does not own the computer equipment, but arranges for
the installation at the distributor depot ofcomputing equipment (identified on attached
schedule) to assist he distributor in
carrying out duties related to the distributor business, the distributor acknowledges that the equipment remains the
property of IBM Australia Rentals Pty. Ltd. from whom it is rented by Shell and the same agreements between the distributor and Shell as are heretofore mentioned will apply.
The Distributor shall not sell or otherwise dispose of or mortgage or pledge or otherwise encumber any of the Equipment. Where the Distributor owns or leases the Distributor Depot the Distributor shall expressly exclude
the Equipment from any sale lease or other
disposal of the Distributor Depot and shall return Equipment to Shell (unless Shell makes arrangements for the new owner or occupier to
have possession before any change of possession or occupation of the Distributor Depot), and if the Distributor is a tenant
only of the Distributor Depot, the
Distributor shall return the Equipment to
Shell before yielding up possession of the
Distributor Depot to the Distributor's
landlord. If the Distributor does not return
the Equipment or any item thereof to Shell upon demand, Shell may remove such Equipment
(including fixtures) from the Distributor
Depot at he Distributor's expense and
without any liability to make good any reasonable damage occasioned to the Distributor Depot in such removal.
25. Without prejudice to any remedy Shell may
have against the Distributor for breach or non performance of this Agreement Shell shall
have the right to terminate this Agreement
summarily on otice in writing to the distributor:-
(a)
if the licence fee hereby reserved or any part of it shall at any time be unpaid for fourteen days after becoming payable
whether formally demanded or not... (d) if Shell being the owner or lessee of the
Distributor Depot loses its right to
possession thereof for any reason
whatsoever;. . .
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35. This Agreement cancels any existing
Distributor Agreement between the parties
hereto and shall continue for the Term."
The premises were described in the Schedule to the
consignment distributor agreement as "All those premises
leased by the Distributor and situated at 542 Footscray Road,
West Melbourne, 3011, and where the premises are owned or
leased by Shell, including as well as the land, the buildings and other improvements thereon and all tanks pumps and other
plant and equipment attached to the said premises."
By cl.1 of the consignment distributor agreement, "the
Term" was defined to mean "the period defined in the
Schedule." The Schedule in turn contained this reference:-
"TERM: A period commencing on the 11th day of September 1981 and continuing for three
years and thereafter until the expiration
of not lees than three months written notice of determination given by either
party to the other."
The Schedule also contained the following paragraphs
under the heading:- "
DISTRIBUTOR DEWT:
(For Shell owned or leased premises only - refer Clause 3(b)
(a) The Distributor acknowledges that his permitted occupancy of the Distributor Depot
for the purpose of this Agreement is as a
licencee only from Shell and agrees that his licence to occupy the premises is personal
to him or when the Distributor is a
corporation or when two or more persons areherein described as the Distributor and one
or more of those persons is a corporation, to such corporation organised with its or their presently existing shareholding and
directorate."he Distributor further acknowledges that
the said licence shall not create in theDistributor's favour any tenancy or any
rights in the nature of tenancy; in
particular, without derogating from the generality of the foregoing the said licence shall not confer on the Distributor any right to exclude from the Distributor Depot
Shell its servants or agents or any person
authorised by Shell, nor shall the said licence be assignable by the Distributor.
The Distributor agrees that he is not making any payment for goodwill to Shell to occupy the Distributor Depot for the purpose of conducting thereon the Distributor Business and that upon termination of this Agreement and his thereupon vacating the Distributor Depot he acquires no right to any goodwill that m y attach to the Distributor Business and/or the Distributor Depot, nor shall he be entitled to receive any payment therefor
f rom Shell. "
The Schedule concluded with the following paragraphs:-
"LICENCE FEE (Refer Clause 4 ) A licence fee of $ nil per month shall be payable
by the Distributor to Shell in respect of: (1) use of the Equipment and Facilities; and
(11) occupancy of the Distributor Depot (where applicable);
provided that such fee may be varied from time to time throughout the Term by Shell if additions or substractions are made to or from the Equipment,
Distributor Depot or Buildings thereon.
OF PAYMENT OF LICENCE FEE
The first payment of Licence Fee shall be made on the Commencing Date and the second and succeeding
payments shall be made on the first day of each
successive calendar month or part thereof
occurring during the term. Payment on the due
date shall be by means of an automatic debit by Shell to the Distributor's bank cheque account, for which purpose the Distributor shall complete,
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sign, and hand to Shell a request to the distributor's bank in the form made available by Shell, PROVIDED HOWEVER that Shell shall be entitled to vary the terms of payment by giving
one month's notice in writing the to Distributor. " Mr Parker P.C., who again appeared with Mr
Blackburn-Hart for Chenoa, took as his starting point the proposition that the consignment distributor agreement created the relationship of landlord and tenant between Shell and Chenoa. Particular reliance was placed on Radaich v
M (1959) 101 C.L.R. 209 where by deed the respondents "as
licensors" granted to the appellant "as licensee" for a term
of five years "the sole and exclusive licence and privilege to supply refreshments to the public admitted to" a lock-up shop "and to carry on the business of a milk bar therein".
In the deed the appellant covenanted, inter alia, upon the expiration or sooner determination of the licence immediately to "give up possession of the said building occupied by her for the purposes of the said business". It was held that in substance and effect the deed granted to the appellant a right to exclusive possession of the shop and it thereby
created a leasehold interest in the appellant so bringing the shop within the jurisdiction of the New South Wales Fair
Rents Board.McTiernan J., at 214, indicated that "the true test of a supposed lease is whether exclusive possession is conferred upon the putative lessee". Applying that test to the deed in question he was able to express himself "satisfied that what was granted by this deed was an interest in the premises,
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therein described, which amounts in truth and in substance to a lease".
To similar effect, Taylor J. observed, at 217:- "I have no doubt that the substance and effect of the instrument in question here was to grant to the appellant a right to the exclusive possession
of the subject premises upon the specified conditions for the prescribed term. The deed obviously contemplated that the appellant should
have the right to occupy the premises for the purposes of her business and the business was to
be carried on upon the premises at all times when they might lawfully be kept open. The character of the business was such that it could only be
effectively carried on if the appellant had
exclusive occupation and it seems clear that, even at times when they could not lawfully be kept open for the purposes of the business, the
premises were to remain under her effective
control. That being so it is inevitable that we
should hold that the instrument created a leasehold interest and that at the material time
the relationship of lessor and lessee existed between the parties."
Windeyer J.'s formulation of the test is to be found in this passage, at 222:-
"When (the parties) have put their transaction in writing this intention is to be ascertained by
seeing what, in accordance with ordinary principles of interpretation, are the rights that the instrument creates. If those rights be the rights of a tenant, it does not avail either
party to say that a tenancy was not intended. And conversely if a man be given only the rights of a licensee, it does not matter that he be called a tenant; he is a licensee. What then is
the fundamental right which a tenant has that distinguishes his position from that of a licensee? It is an interest in land as distinct from a personal permission to enter the land and
use it for some stipulated purpose or purposes. And how is it to be ascertained whether such an interest in land has been given? By seeing whether the grantee was given a lesa1 risht of exclusive possession of the land for a term or
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from year to year or for a life or lives. If he
was, he is a tenant. And he cannot be other than
a tenant, because a legal right of exclusive possession is a tenancy and the creation of such a right is a demise. To say that a man who has, by agreement with a landlord, a right of
exclusive possession of land for a term is not a
tenant is simply to contradict the first proposition by the second. A right of exclusive
possession is secured by the right of a lessee to
maintain ejectment and, after his entry,
trespass. A reservation to the landlord, either by contract or statute, of a limited right of entry, as for example to view or repair, is, of
course, not inconsistent with grant a of exclusive possession. s ch Subject to
reservations, a tenant for a term or from year to
year or for a life or lives can exclude his
landlord as well as strangers from the demised premises. All this is long-established law: see on Electment (1857) pp. 72. 73, 207, 458."
However, in the present case, Chenoa had no right to exclude Shell from occupation of the premises. It expressly
acknowledged in paragraph (b) of the "Distributors
Agreements" in the Schedule to the consignment distributor
agreement that "the said licence shall not confer on the Distributor any right to exclude from the Distributor Depot,
Shell, its servant8 or agents or any person authorised by
Shell. 'I
In addition, Chenoa was circumscribed in the way in
which it could occupy the premises by the obligation to
maintain prominent display thereon of Shell's
identifications. No fee or remuneration referable to
Chenoa's occupation of the premises was payable by Chenoa to Shell. Moreover, Chenoa was constrained by c1.19 not to store on the premises any fuels other than Shell fuels.
On the other hand, the premises were described in the
schedule to the consignment distributor agreement as "all
those premises leased by the Distributor (Chenoa) and situated at 542 Footscray Road, West Melbourne, 3011",
(emphasis added). Attention was also drawn by counsel for Chenoa to cl. 21 of the consignment distributor agreement which provided that "the present Agreement" could be assigned
with the consent in writing of Shell. In addition, it
appears that Chenoa has from May 1987, with the acquiescence of Shell, permitted some third persons to occupy part of the
site for the purpose of conducting the restaurant business which has been carried on since the premises were opened.
However, a contractual licence may be assignable or not assignable according to the terms of the contract; (see e.g. papman v Edwards C19381 2 All E.R. 507).
It was also pointed out by counsel for Chenoa that in
its amended Defence in these proceedings Shell has pleaded
that it is not required to renew or offer to renew, and is
entitled to fail or refuse to renew or offer to renew "the
Distributor Agreement and the Lease"; (emphasis added).
However, if, as I consider it could not, Shell could bind
itself by an admission on the legal question of the
characterization of Chenoa's interest in the premises, I
regard that pleading as a mere adoption for the purpose of
joining issue, of the expression used in paragraph 12 of Chenoa's amended Statement of Claim.
In my view, on balance, the consignment distributor
agreement created only a licence in Chenoa to occupy the premises for the specified term. I have been particularly influenced in coming to this view by the fact that it
conferred no right on Chenoa generally to exclude from the premises Shell, its servants or agents, or any person authorized by Shell. Accordingly, Chenoa was not granted the
exclusive possession which was regarded as decisive in
Radaich v Smith (supra). Rather, it was granted a right to
occupy the premises continuously throughout the term of the agreement for the purpose of selling Shell products. That right was indistinguishable, I consider, from what was characterized as a licence by the Court of Appeal in
Shell-Mer and BP Ltd. v Manchester Garaqes Ltd. C19711 1 All E.R. 841. The need to resolve the question of lease or licence has usually arisen from the application of rent restriction statutes as in Radaich v Smith (supra) and Shell-Mex and BP Ltd v Manchester Garaqes Ltd. (supra). However, there may be cases, as Taylor J impliedly recognized in Radaich v Smith at
220, where there is not "a real contest between the issues of lease and licence". For reasons which I shall indicate this
is one such case, making it unnecessary to come to a
concluded view on the question of whether Chenoa occupied the depot site as a tenant or licensee of Shell.
From the premise that Chenoa was a lessee, Mr Parker
argued that there had been no effective notice to quit which, he argued, the common law made a pre-requisite to recovery of
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possession. He referred, in support of his contention that a notice to quit, in order to be effective, must demand in
terms that the tenant deliver up possession of the demised premises, to the following passage from Cole, The Law and Practice in Electment (1857) at p.46:-
"Generally speaking notice to quit is given
writinq. No particular form is necessary.
Roscoe's Evidence 451 (7th ed.). But if given by or on behalf of the landlord, it must in substance and effect request he tenant, or other the person for the time being legally entitled to
the term (not a mere under-tenant, ante, 45) to quit and deliver up possession of the demised premises at the proper time. 2 Arch. N.P. 397; pee the Form. Appendix. No. 1."
In my view, neither that passage nor later authority
supports the contention advanced on behalf of Chenoa. The
general nature of a notice to quit is described by Cole, m. at p.30 in these terms:-
"A notice to quit is a certain reasonable notice required by law, or by custom, or by special agreement, to enable either the landlord or tenant, or the assignees or representatives of either of them, without the consent of the other,
to determine a tenancy from year to year, or from
two years to two years, or for other like indefinite period. "
The requirement for a notice arising by special
agreement is treated specifically at p.32 of the same work
where the learned author observes:-
"Where there is any express stipulation as to the notice to be given by either party to determine
the tenancy, such notice, whether more or less than that usually required by law, must be given,
and will be sufficient."
A statement similar in effect to the passages from
cited above can be found in P. F'hipps €i CO v Rosers C19253 1 K.B. 14 where Atkin L.J. pointed out at 27:-
"A notice to quit may be the subject of express agreement; it may be required by law in the absence of agreement, as in the case of a weekly, monthly or yearly tenancy. However the necessity arises I think that the principle expressed by
Lord Coleridge C.J. in Gardner v. Insram (1889)
61 L.T. 729 at 730 is correct: 'Although no
particular form need be followed, there must be plain unambiguous words claiming to determine the existing tenancy at a certain time.' Bowen J. in
the same case uses language to the same effect.
The date of determination must be the right date. It may however be given alternatively, and it
is
sufficient if one of the alternatives, without
expressing the actual date, denotes it in terms
which enable the person receiving it to make it certain. " In W. Davis. (Spitalfields), Ltd v Huntlev and Others
C19473 1 All E.R. 246, Henn Collins J had to consider the
sufficiency of a notice relied on as terminating a tenancy which was in these terms:-
"With reference to our meeting with Mr. W.H. Huntley on Apr. 11, we regret that we must give you 3 months' notice to terminate the lease dated
May 14, 1935. Under the conditions set out
therein, you are entitled to receive a sum of 25 when vacant possession is given."
His Lordship said of that notice, at 247:-
"It is said that that is a bad notice according to
the terms of the lease because it does not
specify the date on which possession is to be given in that it does not state the date from which the three months are to run. Suppose that a notice is served by hand, undated, on a tenant:
'I, so-and-so, the landlord, hereby give you
three months' notice in accordance with the
tenancy to deliver up ossession' 'to or
terminate the lease.' Does not the tenant know perfectly well when that notice expires, namely, in three months from the moment that it meets his
eye? Assuming that the landlord is in a position to prove on what date that was, there is no uncertainty about the matter at all. So here, one would assume, that this notice was received
in the course of post - I have heard nothing to
the contrary - and, therefore, would operate at
the expiration of three months from the
defendants' sight of the notice on Apr. 23-Apr.
21, when it was posted, being a Saturday."
The effect of those authorities is that the law does
not require every notice to quit to contain a particular set of words. Where the giving of notice is stipulated in a written lease or other special agreement between the parties,
whether or not the form of a given notice is effective to
determine the tenancy, is primarily to be resolved by
examining the notice against the terms of the provision for it. In the present case the notice required to terminate
the relationship was the subject of express agreement to be
found in the definition in the Schedule to the consignment distributor agreement of "the Term" as:-
"A period commencing on the 11th day of September
1981 and continuing for three y ars and
thereafter until the expiration of not less than
three months written notice of determination
given by either party to the other." The document relied on by Shell as constituting such a
notice was the notice given on 29 August 1985 or
alternatively that given on 5 September 1985 which, it will be remembered, was in the following terms:-
"Pursuant to the Consignment Distributor Agreement dated the 11th September, 1981 made between The Shell Company of Australia Limited ('Shell') of
the one part and Chenoa Pty. Ltd. of the other
part, Shell hereby gives you notice of termination of the said Consignment Distributor Agreement to take effect on 6th December 1985."
That notice, in my view, unequivocally determined from
6 December 1985 whatever legal relations the consignment
distributor agreement brought into existence between Shell and Chenoa, including the relationship, whichever had been
created, of landlord and tenant or licensor and licensee.
I was referred by Mr Parker to J. & M. O'Brien
hter~rises Ptv. Ltd. v The Shell Companv of Australia Ltd. (1983) S ATPR 40-356 where Neaves J had to consider whether monthly tenancy constituted by holding over under a clause in
a written lease, had validly been determined by a notice of termination purportedly given in pursuance of s.16(3) of the
Franchise Act either alone or in combination with an
accompanying letter from Shell to the solicitors for the tenant requesting them to "inform your clients that they are
required to vacate the subject premises by 31st March 1981". His Honour held that no notice to quit valid at common law
had been given because both documents "would have conveyed unequivocally to the recipient that Shell was relying solely
on the statutory provieions and not on the general law". Accordingly it was concluded, at 44, 301 that:-
"Shell, having proceeded and failed under subsec. 16(3) of the Petroleum Retail Marketinq Franchise
1980 and the Notice of Termination read alone
or together with the letters dated 29 December, 1980. not being a clear and unambiguous notice
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that it wished to rely on the general law as an alternative, may not rely on the notice as a notice under the general law to terminate the monthly tenancy. Shell is, therefore, not entitled to possession of the premises. Thi S conclusion is, I think, supported by the reasoning in Cowan v Wravford C19531 2 All E.R. 1138; Mills v =wards C19711 1 Q.B. 379".
In my view, there was no such ambiguity in the notice
given by Shell to Chenoa on 5 September 1985. It was expressly given pursuant to the consignment distributor agreement and did not purport to invoke any right accruing to
Shell under the Franchise Act, or the general law.
It was next pointed out on behalf of Chenoa that from
18 September 1980 the Franchise Act engrafted on to the contractual relationship between Chenoa and Shell a complex of statutory rights and obligationa, one effect of which was to give Chenoa greater security of tenure than that conferred solely by its agreement with Shell. From that premise it was contended that s.6(1D), which was inserted in the Franchise
€J& by Act No 122 of 1984 with effect from 1 January 1985,
took away from Chenoa certain proprietary rights w ich it had
acquired as a result of the operation of the Franchise Act, as originally enacted, on the agreement between it and Shell. Accordingly, so it was argued, there should be applied in construing s.6(1D) the general rule of construction "that a
statute changing the law ought not, unless the intention
appears with reasonable certainty, to be understood as applying to facts or events that have already occurred in such a way as to confer or impose or otherwise affect rights
or liabilities which the law had defined by reference to the
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past events." (Maxwell v MurPhy (1957) 96 C.L.R. 261 per Dixon C.J. at 267). Construed in the light of that presumption, s.6(1D), it was contended, contained a requirement that a franchisee be given notice and afforded a
hearing before any rights which he had under the Franchise
&& in force to 31 December 1984 were taken away.
It is convenient to reproduce again the text of s.6(1D)
which provides:-
" ( 1D) Where- (a) premises were, in a statement lodged
under section 11 of the Petroleum Retail Marketins Sites Act 1980 at any time before 1 September 1984, specified as being a retail site operated by a particular corporation; and
(b) the premises have been operated as a retail site by the corporation or a related corporation on a day or days
occurring during each of the following months, namely, September, October, November and December in the year 1984,
then, in relation to any franchise agreement
(whether entered into before, on or after 1
January 1985) in relation to which the premises are the marketing premises, this Act does not apply at any time before the end of the first month during which neither the corporation nor a related corporation operates the premises as a
retail site. "
Hr Parker pointed to the concluding statement that "this Act
does not apply at any time before the nd of the first month during which neither the corporation nor a related corporation operates the premises as a retail site", and said
that no point in time has been fixed to mark the commencement of the period during which the Act is not to apply to premises which satisfy the criteria in paragraphs (a) and (b). The starting point to be supplied, so it was argued, is a time after the Court has been persuaded that the premises in question satisfied the requirements in paragraphs (a) and (b), and after the franchisee has been afforded an
opportunity to be heard.
I reject that argument. The use of the present tense
in the statement "this Act does not apply", together with the
absence of any stipulation of the commencement of the period
during which the Act is not to apply, signifies unequivocally
that the Act is not to apply from the date on which s.6(1D)
comes into force, i.e. 1 January 1985 until the end of the
first month during which neither the corporation nor arelated corporation operates the premises as a retail site.
I find nothing in Nathieson v Burton (1971) 124 C.L.R.
1, to which I was referred by counsel for Chenoa, to contradict what I have just said.
In that case, after an
amendment contracting the class of protected persons, s.83A of the Landlord and Tenant (Amendment) Act 1948 (N.S.W.) commenced with the words "Where a lessee of prescribed premises dies . . . 'I. The question for the High Court was whether the respondent who had certain rights as the daughter of a lessee of prescribed premises who had died before the amendment came into force, had been deprived of those rights because she was outside the narrower class of protected
persons specified by the Act as amended. It was held that
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the introductory words "Where a lessee of prescribed premises dies ..." confined the application of the amendment to those prescribed premises, the lessee of which died after the
coming into operation of the amending section. Similarly, in the present case the non-application of the Franchise Act is confined to the period after the coming into operation of s.6(1D). However, the events on which that non-application is made to depend are expressly required by paragraphs (a)
and (b) to have occurred before that date. In that sense, s.6(1D) is "an enactment which interferes only with the future existence or operation of a previously acquired right or a previously incurred liability" (Staska v General Motors-Holden's Ptv. Ltd. (1972) 123 C.L.R. 673 at 675), although it does so on the basis of facts ascertainable by reference to periods of time which ended before the section came into operation.
Another reason for rejecting the submission that
s.6(1D) only operates to exclude the application of the
Franchise Act to premises after the Court has pronounced that
they answered the description in paragraphs (a) and (b) of the sub-section is provided by the fact that s.6(1D) says nothing about this or any other court being satisfied that the premises met the criteria in paragraphs (a) and (b).
Thus it may be contrasted both with sub-ss. 16(4), (5) and
(6) of the Franchise Act itself, and with s.130(2) of the Re-establishment and EmPlowent Act 1945 examined by the High Court in Wheeler v War Veterans' Home (1953) 89 C.L.R. 353 to
which Mr Parker referred. That sub-section provided:- ""he appropriate court may, on the application of
the Attorney-General or of any person interested,
make an order that a transaction or proceeding
entered into or taken in contravention of this
Part shall be invalidated, but the court shallnot make any such order if the court is satisfied
that the effect of the order (if made) would be
to prejudice the rights of a person in respect
of, or arising out of, the transaction or
proceeding which are acquired bona fide and without notice of the contravention."
In the event that I should find, as I have, that Shell
is entitled to possession of the premises, I was invited on
behalf of Chenoa to decline to make an order in favour of
Shell on its cross-claim or to defer the operation of the
order to some unspecified date in the future. In support of
that invitation, reference was made to evidence that Chenoa or another company, Anelim Pty. Ltd., associated with Chenoa, would require between six and twelve months to develop as a
truck refuelling station, asite opposite the subject premises which Anelim Pty. Ltd. holds on lease from the Port
of Melbourne Authority.
I was not referred to any authority which suggested
that a court ha5 a general discretion to decline to make an
order for possession in a case such as the present or to
postpone the operation of the order (except to accommodate an
appeal). However, even if the court has such a general discretion, in the light of my conclusion that Chenoa's right
to occupy the premises has been properly determined with
effect from 6 December 1985, in the manner contemplated by the agreement between it and Shell, I would not exercise the
discretion in favour of Chenoa in either of the ways proposed. Mr Parker relied on a line of authority which included
Dr Bentley's Case 1 Strange, 557.; 93 E.R. 698 Cooper v TheWandsworth Board of Works (1863) 14 C.B. (N.S.) 180; 143 E.R.
414 and lbist v Randwick Municipal Council (1976) 136 C.L.R. 106, in support of the proposition that the Court was bound to afford Chenoa an opportunity to be heard before making an order which has the effect of depriving it of rights conferred on it by the Franchise Act. As Dixon C.J. and Webb J. pointed out in The Commissioner of Police v Tanos (1958) 98 C.L.R. 383 at 396, the application of the general principle enunciated in Cooper v The Wandsworth Board of Works and the other cases to which I was referred "to proceedings in the established courts is a matter of course". However, as I have already indicated, the relevant effect on the rights of a franchisee is brought about by the provisions of s.6(1D) of the Franchise Act as amended, not by any order
of the Court resolving a controversy in which those provisions are called in aid. Chenoa has been allowed to say all that it wished on the resolution of that controversy between it and Shell. Given the conclusions which have been reached in that resolution, there were no rights of Chenoa existing after 6 December 1985 to be affected, so the occasion to afford Chenoa a further opportunity to be heard does not arise.
I was also pressed on behalf of Chenoa to make a
declaration in terms of pargraph 3 of the prayer for relief
in its application that "the notice of the 24th June 1985 by
the Respondent to the Applicant under Section 6(1E) of the
Petroleum Retail Harketins Franchise Act 1980 (Cth) is void and of no effect". It was conceded that throughout the hearing of this matter before ne Shell placed no reliance on the notice purportedly given by it under s.6(1E). Nor was that notice regarded by either party as having any continuing significance. Nevertheless, the issuing of the notice under s.6(1E) was said to be one of the events which principally prompted Chenoa to issue its application. Accordingly, so it was argued, the declaration should be made, if for no other reason, to provide a basis for arguing that costs incurred
between December 1985 and March 1987 when it became apparent that the notice under s.6(1E) would not be relied on, should not follow the event. I consider that what has been called
"the broad discretion" to grant declaratory relief should not
be exercised if the declaration sought would not resolve a
real, and not a theoretical question, presently in issue
between the parties. (See e.g. Forster v Jododex Australia Ptv. Ltd. (1972) 127 C.L.R. 421 per Gibbs J. at 437.) In
the present case, neither party has found it necessary to
direct evidence or argument to the efficacy of the notice of24 June 1985 said to have been given under s.6(1E) of the
Franchise Act. Accordingly, any question between the parties in respect of that notice remains hypothetical and the declaration should be refused. However, neither party is precluded from urging that the issuing of that notice be
.
given whatever weight it is contended it should bear on the question of costs.
It was also submitted on behalf of Chenoa that in the
event of the Court refusing an order for possession, or deferring the operation of such an order, an injunction in terms similar to that granted by Woodward J. on 22 August 1986 should protect Chenoa from a variation in the rates of commission allowed and paid to it on the sale of Shell products as long as it remains in occupation of the site at
542 Footscray Road, West Melbourne. Woodward J.'s injunction
was in the following terms:-
"Upon the applicant giving the usual undertaking as to damages, the respondent be restrained until the final determination of this action, or until
further order, from varying the rates of
commission allowed and paid by the respondent to the applicant from those applying between the parties in June 1986."
Because I have concluded that Shell is entitled to have the benefit forthwith
of an order for possession, there
is no
scope for continuing the protection which his Honour then granted by way of interlocutory relief. Since that
interlocutory injunction was expressed to continue "until the
final determination of this action or further order" it will cease, according to its terms, to have effect on the pronouncement of final orders in these proceedings. It therefore requires no further order to be made by me other than by way of providing for an inquiry into the damages (if any) suffered by Shell by reason of that restraint having been imposed on it since 22 August 1986.
In the result, therefore, for the reasons published on
10 March 1988 and this day, the application will be dismissed
and there will be an order on the cross-claim that Shell have
possession of the premises at 542 Footscray Road, West Melbourne. I shall give directions on a date to be fixed for the conduct of an inquiry into the damages (if any) suffered by Shell as a result of the order of Woodward J. of 22 August
1986. As previously indicated, I shall hear counsel at 10.15
a.m. on 15 April 1988 on the question of costs.
I certify that this and the twenty-four (24) preceding pages are
a true copy of the Reasons for Judgment herein of his Honour Mr.
Justice Ryan.
Associate: A? -\c.
Dated: 13 April 1988
.
Appearances
Counsel for Chenoa Pty. Ltd. : R.W.R. Parker QC and P. Blackburn-Hart
Solicitors for Chenoa Pty. Ltd.: Stojanovic & David
Counsel for The Shell Company : B.J. Shaw QC and of Australia Lim ted J.E. Middleton Solicitors for The Shell : Arthur Robinson
Company of Australia Limited & Hedderwicks
Dates of Hearinq : 25, 29, 30, 31 March 1988
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