Chenoa Pty Ltd v Shell Company of Australia Ltd

[1988] FCA 77

L11.1l ' lUU U1 ,91rL lBU' I ' lUM UNLY;

NOT CONSIDEF.ED SUITABLE

FOR REPORTING.

CATCHWORDS

Franchise agreement for dlstribution of petroleum products	-
notice of termination by "prescribed corporation" -	whether

agreement excluded from operation of Petroleum Retail

Marketing Franchise Act 1980 by operatlon of s.6(1D) thereof

- matters affecting compllance or substantial compliance with

requirement that statement be lodged under s.11 Petroleum
Retail Marketing Sites Act 1980 - relationship between Acts
implementing legislative scheme and effect of amendments to

those Acts.

Words and

Phrases corporation" - "related body corporate" - statement "in the - "franchise agreement" - "prescribed

appropriate form" - "diesel fuel site" - "without pre~udlce".

Petroleum Retail Marketinu Franchise Act 1980	(Cth) ss .	3 ,
6 ( 1D).
Petroleum Retail Marketinq Sites Act 1980	(Cth) ss .	3 , 7, 11.
No. VG 273 of 1985

MELBOURNE

CHENOA PTY. LTD.	v. THE SHELL COMPANY OF AUSTRALIA LIMITED	.
Ryan J.
10 MARCH 1988

IN THE FEDERAL COURT OF AUSTRALIA ) )

VICTORIA	D STRICT	REGISTRY	)	No. VG 273 of 1985
)

GENERAL DIVISION 1

Between: CHENOA PTY LIMITED

(Applicant)

U:	THE SHELL COMPANY OF
AUSTRALIA LIMITED

(Respondent)

W: Ryan	J.
-

Date: 10 March 1988

P l a c e :  Melbourne

REASONS FOR JUDGMENT

Early in occupation of premises 1980 the applicant ( "Chenoa") went into

at 542 Footscray Road, West Melbourne,

of which the respondent ("Shell")	was the lessee pursuant to
a lease dated 30 October 1979 from Melbourne Wholesale Fruit

and Vegetable Market Trust. It appears that Mr J.A. Healy,

who has at all material times been the principal executive

officer of Chenoa, was the successful applicant sought by the

following newspaper advertisement which had been inserted by

Shell :  -

\

"NEW DEVELOPMENT

BUSINESS

OPPORTUNITY

We require an ambitious and experienced business

person capable of operating and developing a

large new transport termlnal/retail business

located in a prime area of Melbourne's Inner
western suburbs. The successful applicant will

possess a thorough knowledge of the transport

industry and previous large scale servlce

stationltransport terminal experience is a

distinct advantage.

Minimum Capital Requirement $35,000."

From the time when Chenoa commenced operations at the

spirit day of the week. Customers filled the supply tanks of their
vehicles at those pumps and then provlded consideration, in
one or other of the following ways, for the fuel taken. Some
customers pald the console attendant in cash for fuel taken. and iesel fuel were sold from

site, motor "self-service" pumps which were open

24 hours a day on every

Others drew cheques in favour authority for their "Bankcard" accounts to be debited in
favour of Chenoa for the price of the fuel. Other customers of Chenoa, or signed an

presented "Shell Cards", or otherwise satisfied the

attendant that they had accounts with Shell, and caused those

accounts to be debited with the amount of the purchase. Yet
others who had opened accounts with Chenoa signed invoices
bearing the "Shell" emblem and headed:-

"CHENOA PTY LTD incorporated in Victoria

Trading as SHEI;L TRANSPORT TERMINAL

542 Footscray Rd.,

West Melbourne, 3011."

The amounts of those sales "on Chenoa paper", as they were described, were debited to the customers' accounts by Chenoa

which looked	to the customers for payment against monthly
statements.

From the outset Chenoa employed the console attendants

and the staff of the restaurant which was conducted at the

site. However, considerable assistance in the initial

operation of the business and in setting up financial and

sales accounting systems was given by	a Mr Webb who was then
an area manager employed by Shell. Shell had also erected	or

painted its emblem and other "identifications" on the site

and was responsible	for maintaining the pumps and tanks in
working order.

On 11 September 1981 Shell and Chenoa executed an

agreement as a	"consignment distributor agreement", whereby
Shell appointed Chenoa to be	a distributor of Shell petroleum
and other products from depot premises	at 542 Footscray Road,
West Melbourne.	By cl. 5 of the consignment distributor

agreement, it was provided:

\

1

"5. The Distributor shall during the Term

diligently and faithfully serve Shell	as its
agent and shall use his	best endeavours to

promote and extend the sale of Shell goods at

and from the Distributor Depot and shall

observe l wful all directions and

instructions given to him by Shell relative
to the Distributor Depot and the conduct of
the Distributor Business and in the absence
of any such directions or instructions in
relation to any particular matter as to his
duties hereunder will act in such manner as
he reasonably considers to be most beneficial

to Shell's interest. The Distributor shall

protect Shell's Identifications in the

conduct of the Distributor Business and shall

not do anything that	may prevent the sale of
Shell goods	or interfere with the development

of Shell's trade in the area serviced by the

Distributor Depot. I'

("Shell's Identifications" were defined in cl. 1 of the

consignment distributor agreement to mean "the trademarks,

brand names hereafter at any time during the Term and colour schemes that Shell may now or

own or regularly employ

in connection with goods manufactured andlor sold by Shell").

The consignment distributor agreement further provided that

all Shell goods delivered to the Distributor by Shell under

the agreement should remain the property of Shell and should

be delivered to third parties only in accordance with Shell's

instructions and "only against payment in cash of the price

thereof at the time of delivery unless otherwise instructed

in writing by Shell". However, by cl. 9(c) of the

consignment distributor agreement it was provided that "the

Distributor may at his discretion purchase Shell goods from

consignment stock and sell and deliver such goods to	a
customer on his own personal account provided that	such goods

are sold in the same condition as they are received by him on

consignment from Shell... Any Shell goods purchased for such

sales by the Distributor shall be charged by him to his goods

account with Shell at Shell's current list price applicable

to resellers at the time the Shell goods	are removed from %he
consignment stock.

Clause 23 of the consignment distributor agreement

comprised the commissions and allowances payable to Chenoa:- following stipulations in respect of

"23 (a) The commissions to be paid and allowances

to be given to the Distributor by Shell

are as set out in the Schedule, provided

that in the event of:

(i)   the continued supply of Shell goods

under this Agreement becoming

uneconomical in the opinion of

Shell due to compliance by Shell
with any legislation, requirement,
request or recommendation of any
Government or body, authority or

tribunal constituted by or under

any law of Australia or of any
State or Territory; or

(ii) changes materially altering the

basis upon which the commissions
and allowances or any of them were

originally agreed;

then Shell shall	be entitled to give to
the Distributor notice requiring	a review
by both parties	of the basis and rates of

the	then	current	commissions	and
allowances.	Unless	the	parties	agree

upon appropriate amendments within 30

i

days of	the date of such notice, then
either party	may thereafter terminate
this Agreement upon the expiration of	30

days notice of intention to terminate

given to the other party."

The term of the consignment distributor agreement was expressed in the schedule thereto to be for	"a period
commencing on the 11th day of September	1981 and continuing

for three pears and thereafter until the expiration of not

less than three months written notice	of determination given
by either party to the other".

By notice dated 24 June 1985, Shell notified Chenoa as

follows :

"PFPROLEUM RETAIL MARKETING FRANCHISE ACT 1980

NOTICE PURSUANT TO SECTION 6(1E)

TO :	CHENOA PTY. LTD
PREMISES

:  SHELL FOOTSCRAY ROAD C.R .T.

RELEVAWT DAY: 1st July, 1985

NOTICE IS GIVEN that The Shell Company of

Australia Limited ("Shell") will operate the

premises on and after the relevant	day AND THAT
the premises will, in a	statement to be lodged

under section 11 of the Petroleum Retail

Marketins Sites	Act 1980 not later than 30 days
after the end	of the month in which the relevant

day occurs, be specified as a retail site

operated by Shell.

i

The service of that notice prompted Mr J.A. Healy, as

Secretary of Chenoa, to write the following letter dated 2

July 1985 (omitting formal parts) to Mr Richardson, the

Retail Area Manager of Shell:-

"I refer to your letter of 24th June, 1985

enclosing a Notice Pursuant to Section 6(1E) of

the Petroleum Retail Marketing Franchise Act	1980
(Cth)	.

My solicitors have advised me that a notice under

section 6(1E) of that Act can only be given if

the agreements under which Chenoa Pty. Ltd. is to
operate are 'franchise agreements' within the

meaning of that term as defined in section 3 , and

if a previous franchise agreement with Chenoa
Pty. Ltd. is not required to be renewed under the

Act.

I have been advised that previous agreements

entered into by Chenoa Pty. Ltd. and the Shell

Company of Australia Limited are "franchise

agreements" within the meaning of section 3, and

that those agreements must be renewed for a

further period of 3 years under section 17 of the

Act.

In the circumstances, Chenoa Pty. Ltd. regards

the notice as null, void and of no effect."

Notwithstanding that contention, on 29 August 1985

Shell gave written notice to Mr Healy and Mrs J . M . Healy, who

were, apparently, the principal shareholders in Chenoa. Omitting formal parts, the notice 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 (three clear months

from date of notice)."

A covering letter of the same date addressed to Mr

Healy, again omitting formal parts, made the following

offer:-

"Please find attached a letter of termination of your Consignment Distributor Agreement. We have stated previously that we would be prepared to make you an offer for the retention of your

account trade at this outlet. We now make an

offer of 0.75 cents per litre for the

satisfactory retention of this trade, for a

twelve month period following termination, paid

in two six monthly payments.

Please advise if you accept this offer."

Then on 5 September 1985, Shell gave the following further notice to Mr and Mrs Healy, presumably because it doubted

whether the earlier notice sufficiently specified the date on

which the termination was to take effect:

"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."

i

On 5 December 1985, the applicant issued the

application herein claiming:

" 1 . An injunction, interlocutory and final,

restraining the Respondent from taking

possession of the premises referred to in the
Statement of Claim.

2.       An order under the Petroleum Retail Marketing

Franchise Act 1980 (Cth) directing the

Respondent to renew the Distributor Agreement referred to in the Statement of Claim on such

terms and conditions as the Court thinks fit.

3 .   A declaration that the notice of the 24th June 1985 by the Respondent to the Applicant

under Section 6(1E) of the Petroleum Retail

Marketing Franchise Act 1980 (Cth) is void

and of no effect. I'

In order	to understand the competing contentions of the
parties,	it is necessary to examine in detail certain

provisions of the Petroleum Retail Marketinq Franchise Act

1980 ("the Franchise Act") and the Petroleum Retail Marketinq

Sltes Act 1980 ("the Sites Act") and the relationship between those two Acts.

The Franchise Act in its original form was enacted as

Act No. 139 of 1980 and was substantially amended by Act No.

122 of 1984. Section 3 of the Franchise Act now contains

the following definition of "franchise agreement":-

"'franchise agreement' means an agreement

containing-

1

(a)	provisions, whether express or implied,
under or by virtue of which a corporation
(in this Act referred to as the
'franchisor') authorizes, permits or

requires a person, being another party to

the agreement (in this Act referred to as

the 'franchisee'), to use, in connection with the retail sale of motor fuel by that person at the premises to which the

agreement relates, a mark identifying, commonly associated with, or controlled

by, that corporation or a related

corporation;

(b)	provisions, whether express or implied,
under or by virtue of which a orporation
(in this Act referred to as the
'franchisor') grants a right o, or
otherwise authorizes or permits, a
person, being another party to the

agreement (in this Act referred to as the

'franchisee'), to possess, occupy or use
the premises to which the agreement
relates in connection with the retail sale of motor fuel by that person at those premises; or
(c)	provisions, whether express or implied, under or by virtue of which-

(i) a corporation (in this Act

referred to as the 'franchisor')

accustomed, is entitled or

required to supply motor fuel to

a person, being another party to

the agreement (in this Act

referred th as to

'franchisee'), for retail sale

by that person at the premises

or

to which the agreement relates;

(ii) a person (in this Act referred

to as the 'franchisee') agrees
with a corporation (in this Act
referred to as the 'franchisor')

to acquire motor fuel from

another person (whether a party

to the agreement or not) for

sale	retail bY the
first-mentioned person at the premises to which the agreement relates;"

.

\ - 11 -

It was common ground between the parties that the consignment

distributor agreement of September	1981 embodies a franchise
agreement within that definition. However, Mr Shaw	Q.C., who
appeared with Mr J.E. Middleton	for Shell, contended that
s.6(1D) of the Franchise Act rendered	that Act inapplicable

to the consignment distributor agreement.	That	sub-section
provides:-

" ( 1D)	mere-
(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 relatlon 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 tune before the end of the first
month during which neither the corporation nor	a

related corporation operates the premises	as	a
retail site."

The Sites Act was originally enacted as Act No. 140 of

1980 and it, too, was substantially amended in	1984 by Act	No
121 of that year. Section	10	of the Sites Act imposes

restrictions on the extent to which prescribed corporations

may operate retail sites by providing:-

"10. (1) A prescribed corporation may, subject

to this section, operate	a retail site during any
month.
( 2 ) A prescribed oil company (not being	a
member of a group	of prescribed corporations)
shall not operate, during a	month, a number of
retail sites exceeding the number	of retail sites

specified in the regulations in relation to that

company in relation to that month.

( 3 ) A member of a group of prescribed

corporations one of which is a prescribed oil

company shall not operate a retail site during a

month if the total number of retail sites

(including that site) that would be operated

during that month by the members of that group of

corporations would exceed the number of retail

sites specified in the regulations in relation to
that prescribed oil company in relation to that

month.

( 4 ) In ascertaining for the purposes of this

section the number of retail sites operated

during a particular month, any diesel fuel sites

operated, or any sites temporarily operated,

during that month shall be disregarded."

"Retail site" is deflned in s.3(1) of the Sites Act	as
meaning "premises at which motor fuel is sold by retail".

Sub-sections ( 2 ) and ( 3 ) of 5 . 3 of the Sites Act then

provide : 

"(2) For the purposes of this Act, motor fuel shall not be taken to be sold by retail at a retail site unless it is delivered at that site into the supply tanks of road vehicles by a metered pump.

( 3 ) For the purposes of this Act, motor fuel

shall be taken to be sold at the time when it is

delivered in pursuance of the contract of sale."

\

Section 11 of the Sites Act to which reference is made in

s.6(10) of the Franchise Act was significantly amended by s.7

of Act No. 121 of 1984 which came into operation on 1 January

1985. Before those amendments, 5-11 of the Sites Act was in

the following form:-

"11. (1) A prescribed corporation specified in

the Schedule shall, within 30 days after the

commencement of his Act, lodge with an

authorized officer-

(a) where that corporation, or a member or

members of a group prescribed of

corporations of which that corporation is

a member, operated a retail site or retail

sites on the day immediately preceding the

commencing day - a statement in accordance

with the appropriate form specifying, in respect of the operation on that day of

each retail site by that corporation or by

a member of that group of corporations (In

this paragraph referred to as the

'relevant	corporation'),	the	following
matters :

(i) the name of the relevant

corporation;

(ii)' particulars of the situation of

the site;

(iii)whether the relevant corporation

owned, or was lessee a or

licensee	in	respect	of,	that
site;

(iv) whether motor fuel for road

vehicles was sold at that site by

or on behalf of the relevant

corporation or by a person under
an agreement referred to in

sub-paragraph 7(l)(b)(ii);

(v) whether that site was a diesel

fuel site, a training site,	a
market research site	or a site
temporarily operated and,	in the

i

case of a site mporarily

operated, the circumstances by

reason of which it was to be

taken to be temporarily operated;

or

(b)	where that corporation did not operate, or
no member of a group of prescribed

corporations of whlch that corporation is

a member operated, a retail site on the
day immediately preceding the commencing

day - a statement in accordance wlth the

appropriate form stating that fact.

prescribed corporation specified prescribed corporations one of which is specified
in the Schedule- in the Schedule, or a member of a group of

( 2 ) Where a

(a) operates a retail site on a particular day

after the commencement of this Act; and

(b) did not operate that site on he

immediately preceding day,

the corporation so specified shall lodge with an

authorized officer, within	30 days after that
particular day,	a statement in accordance with
the appropriate form specifying, in respect	of
the operation on that particular day of that
retail site by that corporation	or by the member

of that group of	corporations, as the case	may
be, the matters	referred to in sub-paragraphs

(l) (a)(i) to (v) (inclusive).

( 3 ) Where a prescribed corporation specified

in the Schedule, or a member of a group of

prescribed corporations one of which is specified

in the Schedule, ceases to operate	retall site,
the corporation so specified shall lodge with an
authorized officer, within	30 days after the last

day on which that corporation or the member of
that group of corporations, as the case may be,

operates that site, a statement in accordance

with the appropriate form stating that fact.

( 4 ) Where, in respect of the operation by a

prescribed corporation specified in the Schedule,

or by a member of a group of prescribed

corporations one of which is specified in the

Schedule, of a retail site on a day (in this

sub-section referred to as the 'subsequent	day')
after the day to which	a statement lodged by the
corporation under paragraph (l)(a)	or sub-section

\

or this sub-section relates, the matters

specified in that statement would, if that

statement related to	the operation of that retail
site on the subsequent	day, be incorrect or

insufficient, the corporation so specified shall,

within 30 days after the end of the month In

which the subsequent day occurs, lodge with an

authorized officer a statement in accordance wlth

the appropriate form specifying, in respect of

the operation of that retail site on the

subsequent day by that corporation, or by the

member of that group of corporations, as the case
may be, the matters referred to in sub-paragraphs

(l)	(a)(i) to (v) (inclusive).
( 5 ) A reference in a sub-section of thls

section to the appropriate form shall be read as

a reference to such form as is prescribed for the

purposes of that sub-section or, if no form is	so
prescribed, such form as the Minister approves for the purposes of that sub-section.

(6) Were a statement is required by a

provision of this section to be lodged within a

particular period, the obligation to lodge	that
statement continues, notwithstanding that that

period has expired, until that statement is

lodged.

A person may-

inspect any statement lodged under a

provision of this section; or

require a copy of, or extract from, any

such statement to be given by an

authorized officer,

on payment for each inspection, or each copy or prescribed. extract, of such amount (if any) as is (8) A corporation shall not-

(a) include in a statement lodged in purported

compliance with a provision of thls

section any information that is false in a

material particular; or

(b) omit from any such Statement any

information that is required by this

section to be included.

.

(9) For the purposes of this section, a

corporation shall not be taken not to have

operated a retail site on a particular day by

reason that motor fuel for road vehicles was not

sold by retail at that site on that day if-

(a)	motor fuel for road vehicles was not sold by retail at that site on that day due to a shortage of supplies of motor fuel for retail sale at that site, an industrial
dispute or circumstances beyond the
control of the corporation; or
(b) that day was	not a business day and the

corporation operated that site on the last preceding day that was a business day and

on the next succeeding	day that was	a
business day.

(10) Sub-section lO(5) has effect in relation

to the application of sub-paragraph (l)(a)(v) of this section in like manner as it has effect in

relation to the application of sub-section

lO(4) . "

The originally appeared in definition of "prescribed corporation" as it

s.3 of the Sites Act was:-

"'prescribed corporation' means-

(a) a corporation specified in the Schedule;

(b) any petroleum; or

other corporation that refines

(c) a corporation that is an associate of a

corporation referred to in paragraph (a)

or (b);"

Among the corporations specified in the Schedule to the Sites

- Act, which was repealed by s.12 of Act No. 121 of 1984, was

"Shell Australia Limited".

After the Franchise Act and the Sites Act had come into

force on 19 September 1980, the Acting First Assistant

Secretary, Trade Practices and Consumer Affairs Division	of
the Department of Business and Consumer Affairs which was
responsible for administering both Acts, on	15 October 1980
sent a	telex message to the managing director or chief

executive officer of each corporation named in the Schedule

to the Sites Act. One addressee of that message was "Mr

L.T. Froggatt, Chairman and Chief Executive Officer, Shell

Australia Ltd, Melbourne".

In the body of the telex message it was recited:-

"The following text details the forms approved by
the Minister pursuant to section 11 Petroleum
Retail Marketing Sites Act 1980. Copies will

follow by air express."

Then followed a form of statement to the effect that neither

the prescribed corporation nor any member of a group	of
prescribed corporations, of which the corporation making the

return was a member, operated a retail site on the day

immediately preceding 19 September 1980. The telex message then went on to indicate a form of statement to be used by prescribed corporations which did operate retail sites.

That part of the message was in this form:-

i

"PETROLEUM RETAIL MARKETING SITES	ACT 1980
STATEMENT AS TO OPERATION OF RETAIL SITE ON	(DATE)

NAME OF PRESCRIBED CORPOMTION

NAME OF	PARTICULARS OF	SPECIFY
RELEVANT	SITUATION OF	THE RELEVANT
CORPORATION	RETAIL SITE	CORPORATION
OWNED, OR WAS A
LESSEE OR
LICENSEE IN RESPECT OF, THE SITE
SPECIFY WHETHER	SPECIFY WHETHER	IN THE CASE OF
MOTOR FUEL FOR	THE SITE KAS A	A SITE
DIESEL FUEL SITE	TEMPORARILY
A TRAINING SITE,	OPERATED
BY OR ON BEHALF	A MARKET
OF THE RELEVANT	RESEARCH SITE,
CORPORATION OR	OR A SITE
BY A PERSON UNDER	TEMPORARILY
AN AGREEHENT	OPERATED
REFERRED TO IN SUB-PARAGRAPH 7(1)(B)(II) OF
THE ACT

N.B.	THIS FORM HAS BEEN BROKEN INTO SECTIONS ONLY
FOR THE PURPOSE OF TELEXING. ACTUAL FORM
SHOULD BE SET OUT IN COLUMNS ACROSS O N E
PAGE. "

A third part of the telex message indicated a form of return for use when a recipient corporation or a member of a group of corporations of which it was a member had ceased to operate a particular retail site.

In response to that telex message, Mr Duke, who was

then Retail Planning and Investment Manager fo Shell, which

has at all material times been a wholly owned subsidiary of

Shell Australia Limited, caused a computer printout to be

produced in which details of sites were provided under the

following headings:

"DETAIL SITES AS PER CLAUSE 11(1)A OF THE

PETROLmTM RETAIL MARKFTING SITES ACT

STATE

NAME PARTICULARS LOCATION CAEGORY SECTION

OF OF SPECIALITP 7(l)(b)(ii)?

SITE	CORP	SITE?	- NAME	TEMPORARY
OP .
REASONS 'I

In the pages of the printout related to Victoria the word

"Shell" invariably appeared in the first column, while in th

second and third columns there appeared, respectively, the

designation of a particular service station and the suburb or

town in which it was located, e.g. "Shell Ormond Self Serv,

Ormond. " In the column headed "category", establishments

were designated heading "SECTION either "leased" or "owned". Under the

7(1) (b) (ii)?" the word "no" invariably

appeared to indicate that the site was not one to which

sub-paragraph (b)(ii) of s.7(1) of the original Sites Act

applied. (In 1980 s.7 of the Sites Act was in the following

terms :  -

.

'. - 20 -

'"7.(1) For the purposes of this Act, a retail

site shall be taken to be operated by a

prescrlbed corporation on	a particular day if-
(a)	on that day, the corporation owns, or is a lessee or licensee in respect of, that site: and
(b)	on that day, motor fuel for road vehicles is, at that site-

(i)sold by retail by or on behalf of the corporation; or

(ii) sold by retail by a person under

an agreement (not being a

franchlse agreement) to which

the corporation is a party,

where, under that agreement or

any other agreement to which the

corporation	is	aparty,	the
corporation	receives	i	or

entitled to receive any payments

in respect of that sale, other

than payments in respect of the

purchase of that motor fuel by

son	that	per	from	the
corporation.

( 2 ) Paragraph (l)(b) does not apply in

relation to a retail site if, in the ordinary

course of business, more than 75% of the motor

fuel sold by retail at that site is sold under a

franchise agreement. " )

Except in respect of some establishments described in handwritten additions at the end of the Victorian section of

the printout, and	one entry for "Shell South Oakleigh", there
were no entries in that section under the	headmg "Speciality
Site". There were no entries	at all in that section under

the heading "Temporary Op. Reasons". At the end of the

Victorian section, handwriting. The fourth seven establishments were listed in

of those entries read as follows:-

"Shell Footscray Footscray Leased No D/F.

Terminal Transport . I*

Mr Duke explained that entry as referring to "a retail

site which I knew as the Footscray Road Transport Terminal located adjoining the wholesale market in Footscray Road -

542 Footscray Road, if I remember correctly". The entry

"D/F".	which appeared under the heading "Speciality Site" in
respect of six	of the seven sites added by hand to the

Victorian section signifying "diesel fuel". of the printout, was explained as

After the compilation of the computer printout and handwritten additions had been completed,	a covering letter
dated 17 forwarding the information	October 1980 was prepared for the purpose of

to Mr Bellamy, the signatory to

the departmental telex message of 15 October 1980.	That
letter was under the letterhead of Shell and signed by Mr Duke as Planning and Investment Manager. Omitting formal parts, it was in the following terms:-

"Re : Petroleum Retail Marketins Sites Act 1980

Pursuant to the provisions of Section l1 of the

Petroleum Retail Marketing Sites Act 1980 and in

accordance with your telex Customs Mix. 350 of

15th October 1980, we submit herewith statements

containing details of retail sites operated by

member companies of the Shell Group in Australia

on the day immediately preceding 19th September

1980. The following explanatory and general

comments should be read in conjunction with those
statements:-

(1) Since our Agent Dealers all occupy retail

sites under Agreements falling within the

1

definition of 'franchise agreement' contained

in Section 3(1) and since all sales of motor

fuels made by them, by retail, at such sites

are made under those Agreements (whether such

sales are made on the Agent's own account or

as agent of Shell). then we believe all such Agent Dealer operated sites fall within the exclusion of Section 7(2) of the Act and if we were to complete the Statement strictly in

accordance with our interpretation of the Act

we would exclude all such sites from our

return. As a consequence, leaving aside the

question of the possible inclusion of

Distributor Agents, our return under such

circumstances would detail only the one site

which was operated by Company staff and

which, incidentally, falls within the

definition of a Dlesel Fuel Site.

( 2 ) We do not believe, however, that this was the

intent of the Government. Following our

recent discussions in Canberra with M r .

Bellamy we are more firmly of the view that the intent of the Government would have been

achieved if Clause	7(2) had been amended to
read as follows:-

'Paragraph (l)(b) does not apply in relation

to a retail site if, in the ordinary course

of business, not more than	25% of motor fuel
sold by retail	at that site is sold by or on

behalf of the Corporation.'

Because of our belief regarding the intent of
the Government we have, in an endeavour to

assist the administrative process, completed

our eturn as if the above suggested

amendment had been incorporated. However,

we do this on the basis that it is without

prejudice to our position and rights under

the Act as it presently stands.

( 3 ) Turning now to Distributor Agents (i.e. that

class of our Agents whose principal business

resellers,	to	supply	bulk	is
commercial/industrial customers and the
agricultural market) and leaving aside the concerns we have previously expressed that earlier statements by Government regarding
non application of the Act to 'country
distributors who act as Agents' had clearly
indicated to us that the Act would not apply
to Distributor Agents at all, we are now left
in the situation where, regardless of the

!

Government's intent our interpretation	f the
Act places Distributor Agents in the same
position as Agent Dealers.	That is to say

that while all retail sales of motor fuel

made by a Distributor Agent (whether on his

own account or as agent for Shell) would be

made pursuant to a 'franchise agreement' and

thereby come within the exclusion of Section

7 ( 2 ) , If that section were amended in

accordance with our suggestion, then many
Distributor Agents would be caught by the

Act.

( 4 ) Distributor Agents operate retail facilities

primarily to service larger accounts needs

for product delivered into vehicles as an

additional service to that requirement for product to be delivered to their premises.

These transactions are carried out by the

Distributor Agent both on his own accounts

and on behalf of Shell.

The definition and exception provided in the

Act (Section 7 ) of sales made on a particular

day cannot be applied to a site with such

transaction fluctuation as occurs at

Distributor Agent premises and we have

therefore assumed an average annual sales

proportion.

Based on this assumption the number of

Distributor Agents now included in our

'without prejudice' return is 135. As we had not contemplated inclusion of this type of Agent at the time we previously advised you of numbers, we would now seek to have the

numbers specified in both columns of the

Schedule to the Act increased by that number

so that they would then read 366 and 249

respectively. We believe such adjustments

to be necessary since the continuation of the

present method of servicing through the

country distribution network is essential if

we are to be able to carry out our current
obligations and continue to satisfy the many
customers including Commonwealth Government
Departments who currently rely upon this

segment of our marketing network.

Further to the above comments which relate to

the specific problems we have faced in

complying with the requirement to produce and
submit these statements we wish to again
bring to your attention matters previously

i

raised and in	this relation refer to our
telex of 12th September	1980 wherein on pages

5 and 6 we sought to have amendments

incorporated in the definitions of both

'market research site'	and 'training site'
and in addition sought to	have the geographic

limitation removed from Clause 10(4)(c). We

would	again draw your	attention	to	the
arguments	contained	in	that	earlier

communication and particularly, in relation
to market research sites, strongly commend
our suggestions to you and through you to the
Government since compliance with the Act as
it currently stands could seriously inhibit

our ability to engage in research projects

many of which could potentially be of

national benefit.

We have expended considerable effort in our

endeavours to comply both with the letter and

the spirit of thls legislation and although recognising the problems associated wlth the

legislation at this particular tune, do

earnestly seek further consultation wlth you

with the objective of removing areas of

uncertainty and reducing the administrative

costs associated with such compliance."

The phrase "authorized officer" which has at all times

appeared in s.ll(l) of the Sites Act was originally defined

in s.3 of that Act as meaning:-

"(a) the Permanent Head of the Department administered by the Minister; or

(b)	an officer of that Department appointed
by the Permanent Head of that Department

by writing under his hand to be an

authorized officer for the purposes of

this Act;

Because no appointment in accordance with paragraph (b)

of that definition had been notified to Shell bp	17 October,
the letter	of that date reproduced above was not sent until

i

20 October when it and the computer printout wi h additions

were forwarded to Mr McMahon who, Shell was advised, had been

appointed to be an authorized officer.	The further covering
letter dated 20	October 1980, again omitting formal parts,
read :	-

"Having today been advised that you have been

nominated as an authorised officer for the

purposes of Section 11 of the Petroleum Retail

Marketing Sites Act 1980, and in order to avoid
further delay in the despatch of our initial

statement required under that Act, we have taken

the liberty of attaching hereto our original

covering letter prepared for despatch to	Mr. G.I.
Bellamy.	"

That letter with enclosures was received by the Department on

22 October 1980.

Section 11 of the Sites Act as it was enacted in 1980

appeared to obligation separately to notify impose on each prescribed corporation an

an authorized officer, within

30 days, of each new retail site which it commenced to

operate, each retail site which it had operated on 18

September 1980 and subsequently ceased to operate, and each
subsequent change in respect of	a retail site which would
render the original statement under s.ll(l)(al or	s.ll(21 in
respect of that site incorrect or insufficient. However,	it

seems that officers of the Department administering the Sites

Act agreed, after some negotiation, that changes in the

status of particular sites could be collated in a single

\

monthly return to be submitted by each prescribed company in
respect of the whole of the preceding month. The return was

required to be submitted as soon as practicable after the end

of the month. Pursuant to that arrangement Mr Duke wrote,

again under the letterhead of Shell, to the Acting First

Assistant Secretary of the Department	on 13 February 1981 as
follows:

“Petroleum Retail Marketins Sites Act 1980

As required under the Act we attach hereto, in the prescribed form, details of changes from the commencement of the Act to date, in retail sites

operated by Shell. We regret the delay in this

submission but have arranged for regular monthly

submissions in future.“

Enclosed with that letter were two sheets, the first of

which, under reproduced the column headings which had been specified in the heading “SHELL AUSTRALIA LIMITED”,

the departmental telex message of 15 October 1980 and under

those headings purported to give required information about

four etall returns in accordance with the agreed practice, and from time sites. Shell thereafter submitted monthly

to time advised the Department by letter of corrections which

needed to be made to information contained in those returns

and forwarded supplementary returns. In or about November

1982 the Attorney-General‘s Department apparently assumed

responsibility for administration of the Sites Act. On 9 November 1982, Mr Wing of the Competition Policy Branch of that Department sent the following telex message to Mr Duke

of Shell:-

\ .- 27 -

"PETROLEUM RETAIL MARKETING SITES ACT

I REFER TO O U R TELEPHONE CONVERSATION OF 8
NOVEMBER 1982.

IN ANTICIPATION OF THE FORMAL TRANSFER OF

RESPONSIBILITY FOR THE PETROLENM RETAIL MARKETING
SITE3 ACT FROM THE MINISTER FOR INDUSTRY AND
COMMERCE TO THE ATTORNEY-GENERAL, AND HAVING
REGARD TO THE EXPIRY OF THE ORIGINAL TWO-YEAR

PHASING-IN PERIOD OF QUOTAS UNDER THE ACT, THIS

DEPARTMENT HAS BEEN M I N I N G THE RETURNS	LODGED
BY ALL COMPANIES WITH	THE DEPART= OF INDUSTRY
O U R INITIAL EXAMINATION HAS RAISED SOME	QUERIES
ABOUT CERTAIN ASPECTS	OF SHELL'S RETURNS, IN

PARTICULAR, WHETHER THERE HAS BEEN COMPLIANCE

WITH SECTIONS 10 AND l1 OF THE SITES ACT. TO
ASSIST IN CLARIFYING THE SITWATION I WOULD BE

GRATEFUL IF WE COULD HAVE -

. IN RELATION TO EACH OF THE FOLLOWING 9 SITES

IDENTIFIED AS HAVING CEASED TO BE COMPANY OPEXATED, THE SITE NAME, THE DATE OF COMMENCEMENT OF OPERATION AND G-EEEER THE SITE WAS OWNED OR LEASED:

- ENMORE RD. , ENMORE (NSW)

- GAILEP RD., ST. LUCIA (QLD)

- OXFORD ST., BULIMBA (QLD)
- POLICE ST., NOBLE PARK (VIC)

- MT. DANDENONG RD., CROMON (VIC)

- BURWOOD W., FERNTREE GULLY (VIC)

- STIRLING HUY., CLAREMONT ( W A )
- CANNING W. , MT. PLEASANT (WAA)

- WALTER RD. , INGLEWOOD ( W )

. IN RELATION	TO EACH OF THE FOLLOWING 5 SITES IDENTIFIED AS BEING UNDEX TEMPORARY OPERATION
AT SOME STAGE, THE DATE ON WHICH TEMPORARY
OPERATION COMMENCED AND CEASED AND THE GROUNDS ON blHICH THE SITE WAS TEHPORARILY OPERATED DURING THAT PERIOD:

I .- 28 -

- PACIFIC W., SOUTH TWEED HEADS (NSW)
- MATERDALE RD. , IVANHOE (VIC)

- KINGSMAY. SOUTH MEZBOURNE (VIC)

- FRANK ST., LABRADOR (QLD)

- GREENHILL ST., BURNSIDE ( S A ) , AND

. IN RELATION TO EACH OF THE FOLLOWING 5 SITES IDENTIFIED IN YOUR RETURN OF 17 OCTOBER 1980,

THE CURRENT STATUS OF THESE SITES:

- CHESTER PASS RD. , ALEANY (IdAA)

- SPENCER ST., BUNBURY (IdAA)
- CARRINGTON ST., BYFORD (W)
- BARDIA AVE., SEAFORD (VIC)

- GARDNEX ST., KOO-WEE-RUP (VIC).”

In reply to that message, Mr Duke, again on behalf of

Shell, wrote to	Mr.	Wing the following letter dated	18
November 1982:-

“The following information is ubmitted in

response to your telex of	9/11/82:-
(a) Sites identified as havinq ceased to	be

company operated.

All 9 of the sites listed were agent/dealer operated on the commencing day and, save for

one inadvertent omission, were listed on our

initial return of 17 October 1980. The

which, due to a delay in the updating of our	omission was Mt. Dandenong Rd., Croydon
computer record had not been designated as an agentldealer operated outlet when our return of 17/10/80 was printed.
The specific detail requested in respect of each of the 9 sites is set out in Attachment
(a) to this letter together with a note in
respect of the earlier listing for each
site.

(b) Sites identified as beincr under temporarv

operation at some staqe.

\ ,- 29 -

Each of the 5 sites queried warrants some

specific comment in addition tohe

particulars requested by	you and set out in
Attachment (b).
(i)	South Tweed Heads (NSW). Although originally intended to be
temporarily chang pe ated

circumstances led to the agentldealer

remaining in sltu so that we now

regard this as one of our quota

sites.

(ii)   Ivanhoe ( V I C ) .

( h i ) South Melbourne (VIC).

Both these sites were operated

pending finalisation of negotiations

for	the	installation	of	new
franchisees.

(iv) Labrador (OLD).

The intention at the commencement of

Company operation (on 7 / 4 / 8 2 ) was to

operate only temporarily. Following

a change of plan negotiations for a

tenancy were concluded and a

franchisee was installed from 1/9/82.

( V )	Burnside ( S A ) . Following the departure from the site
of the previous franchisee
negotiations were commenced with the
Head-Lessor for surrender of the
Head-Lease. Pending finalisation of

these negotiations we were obliged to

retain on foot the licence under the

S.A. Motor Fuel Distribution Act.

This necessitated opening the outlet for business on 1 / 2 days each month.

(c)	Sites (depots) identified in our return of 17th October 1980.
Following telephone discussion with you
subsequent to receipt of your telex we now understand that your query in respect of these 5 sites arises as a result of them
having been listed on our return of 17/10/80

and (at least apparently) not being listed

i

on the statement of 18/8/81. Reference to

the covering correspondence to those two

listings will provide vidence of the

confusion to exi ti g then as

interpretation, intent and terminology in
respect of Distributor operated premises.

Under such circumstances it is perhaps not

surprising that some discrepancles have

occurred. In addition we have had the

situation	where	amendments	necessary	to
permit	orderly	the	continuation	of
commercial	activlty	have	been	under

consideration/discussion for some tune and

these may, of themselves, have created some

confusion. The specific detail requested by

you is set out in attachment (c).

Please do not hesitate to contact us again should we be able to assist further."

dnnexed to that letter were three attachments, the

first of	which identified sites specified in the original
Shell statement of 20	October 1980 under different names or

locations and one site, at Croydon, omitted altogether from

that statement. The second attachment, (b), gave further

information about sites which had been indicated at some

stage in a Shell return as being temporarily operated by the

company, and attachment (c) gave more precise information

about the five sites enquired after by the concluding

paragraph of Mr Wing's telex message.

In December 1982, the Attorney-General's Department

prepared, from returns lodged under s.11 of the Sites Act, a

consolidated list of sites operated by those corporations

specified in the schedule to the Act. A copy of that list

was forwarded to the Australian Automobile Chamber of

\ .- 31 -

Commerce and a copy of that part of it which detailed Shell's

sites was sent to Shell. Among 38 Shell sites in Victoria

described as "Quota sites", there was no reference	to any
premises in Footscray or West Melbourne, but in Part	B of the

list	headed	"Exempt	sites"	under	the	sub-headmg "(iv)
Diesel-fuel",	among	the	Victorian	sites,	appeared	the

following entries:-

"3)	Footscray Terminal, Footscray
4 )	Sims St. Terminal, West Melbourne
5)	West Melbourne Terminal. West Melbourne."

A corresponding list containing the same entries under

the "Diesel-fuel'' sub-heading of the section comprising

exempt sites was prepared and similarly distributed by the

Department of Industry and Commerce in July 1983. The letter

of 26 July 1983, by which a copy of that list was forwarded

She1 to 1, contained the following passage : -

"Further, as part of the Government's review of

proposed	amendments to the Petroleum Retail
Marketing Legislation, announced on 18 May 1983,

the Department is seeking certain information

regarding volume through-puts of prescribed

corporations' Sites Act sites. With regard to

your Company, the information below is requested.

As with all such requests, the information

provided will be on a strictly confidential

basis.

Request for information:

A)	Petroleum Retail Marketing Sites Act; For the 71 exempt-category diesel-fuel sites
operated by Shell as at 6 July 1983

!

the total volume litreage of motor fuel

(as defined) sold	by retail at each site
during the month of	June 1983, and

the of total bove, the volume

proportion of retail sales of petrol

fuel to diesel fuel."

When a further Departmental consolidation was prepared in July 1985, Shell was shown	as having only one exempt
diesel-fuel site in Victoria and the list of	22 "Quota sites"
in Victoria included:-

"9. 542 Footscray Rd. Footscray"

That consolldation prepared from returns under the Sites Act to
November 1985. change was preserved in another Departmental

On 28 February 1986, Shell provided to Dr Hagen, the Assistant Secretary, Commerce Branch, of the Department	of
Industry and Commerce, a list of sites which	it had ceased to

operate during January 1986, details under the headings

specified in the departmental telex message of 15 October

1980 of sites which Shell had commenced to operate during
that month, and	a list of all sites, (presumably operated by

Shell to which the Sites Act was said to apply), as at 1

January 1986. That list included, under the sub-heading

"CRT's", the entry:-

"Footscray Road Transport Terminal,	542 Footscray
Road, Footscray.	I'

By letter dated 14 March 1986, Mr Burrowes, the Retail Planning and Business Operations Manager	for Shell, wrote to
Dr Hagen as follows:-

“PEIXOLEUH RETAIL MARKETING SITES ACT 1984

Following our January submission of site numbers we realised the format used was at variance with the requirements.

Therefore, although absolute numbers have not

changed, we have resubmitted our return. We have

also included a Form 3 and Form 4 return although

this is not necessarily required in January	of
each year.	‘I

Among the attachments to that letter was a list headed:-

“FORM 1 - VICTORIA

COMMONWEALTH OF AUSTRALIA

Petroleum Retail Marketing Sites Act 1980

STATEMENT I N RESPECT OF RETAIL SITE OPERATED

DURING JANUARY 1986

Name of prescribed oil company: Shell Australia Limited”

The list was then divided into six columns with headings in

the form specified as Form 1 by Reg. 4A(1) of the Petroleum

Retail Marketins Sites Recrulations which was inserted by S.R.

No. 6 of 1985. That form partly reproduced, with some

differences, the headings stipulated in the departmental

telex message of 15 October 1980. One of the entries in the

list to which I have just referred was s follows:-

“SCOA Footscray Rd Transport Terminal 542 Footscray Rd Footscray“

,- 34 -

The notations under the third and fourth column headings in

Form 1 in respect of that site were:-

"Specify whether	Specify whether motor
the corporation	fuel was sold by retail
owned, or was a	during the month at the site
lessee or licensee	by or on behalf of the
in respect of the	corporation or by a person
site on any day	under an agreement of the kind
or days during	to which sub-paragraph 7(l)(b)(ii)
the month	of the Act applies to which the
corporation is a party

Leased On behalf"

There was no notation in respect of that site in the fifth column of Form 1 which required it to be specified whether, during the month, the site was a diesel fuel site or a site temporarily operated.

It will be observed that the requirements respectively imposed by paragraphs (a) and (b) of s.6(1D) of the Franchise

m, as amended, are cumulative. Thus, even if the subject

premises had validly been specified in a statement lodged

under 5.11 of the Sites Act at some time before 1 September

1984 as corporation, they were not excluded from the operation of the
Franchlse Act unless they had been operated as a retail site being a retail site operated by a particular

by that corporation	or a related corporation on at least one
day during each	of September, October, November and December
1984.

By s.6(1F) of the Franchise Act, as amended, it is

provided that:-

\ .- 35 -

"Expressions used in sub-sections (lD), (1DA) and (1E) have the same respective meanings a in the

Petroleum Retail Marketins Sites Act 1980,

disregarding sub-section 7(3) of that Act."

It therefore becomes necessary to go to the provisions of the

Sites Act, as amended, Cother than s.7(3)3 to determine in

what circumstances premises could be said to have been

operated as a	retail site in the last four months of 1984.
Sub-sections (1) and ( 2 ) of 5.7	of the Sites Act, as amended,
provide as follows:-

"(1) For the purposes of this Act, a retail

site shall, subject to sub-sections ( 2 ) and ( 3 ) ,

be taken to be operated by a prescribed

corporation during a particular month	if-
(a)	on any day or days during that month, the
corporation owns, or is a lessee or
licensee in respect of, that site; and

(b) on that day or any of those days, motor

fuel is, at that site-

(i) sold by retail by or on behalf of

the corporation; or

(ii) sold by retail by a person (as

servant or agent of another person)

under an agreement to which the

corporation is a party, where,

under that agreement or any other

agreement to which the corporation

is a party, the corporation

receives or is entitled to receive
any payments in respect of any such

sale or sales, other than payments

in respect of the purchase of that

motor fuel by that person from the

corporation.

( 2 ) Except for the purposes of paragraph

8(2)(b), a retail site shall not	be taken
to be operated during	a particular month by
a prescribed corporation if	the quantity of
motor fuel that was sold by retail	at the
site during	that month-

(a) by or on behalf of the corporation; or

(b)	by a person under an agreement referred to in sub-paragraph (l)(b)(ii),
(otherwise than by	way of exempt retail sales)
was less than	30,000 litres or such other number

of litres as is prescribed.

"Motor fuel" is defined in s.3 of the Sites Act as

meaning "any fuel to be used in propelling road vehicles,

other than diesel fuel or liquefied gas". "Road vehicle", in

turn, is defined by the same section as meaning "a vehicle

designed solely	or	principally for transporting persons,
goods or animals by road". Sub-sections	( 2 ) and ( 3 ) of	5.3
of the Sites Act, which	I have already quoted, indicate	that

a sale by retail is to be taken as occurring when motor fuel

is delivered into the supply tank of	a road vehicle	by	a
metered pump.

It is clear from the vidence that Shell was,

throughout September, October, November and December 1984,

the lessee from the Melbourne Wholesale Fruit and Vegetable

Market Trust, pursuant to a lease dated 30 October 1979 as

extended from 1 November 1984 of part of the premises

described in the lease as "542 Footscrap Road, Footscray".

I am satisfied that the premises the subject of that lease

are identical with the depot premises occupied by Chenoa and

described in the consignment distributor agreement of 11

September 1981 as being	at	"542	Footscray	Road, West
Melbourne".

7 37 -

The evidence, particularly that of Mr Morris who been the administrative manager of Chenoa since January has

1983,

disclosed that six "self-service" motor spirit pumps and six

similar dlesel fuel pumps were In operation at the subject

premises for	24 hours each day throughout the latter half of
1984.

A table prepared by Mr Morris in respect of the months

of September, October, November and December 1984 disclosed

that the following volumes, in litres, of motor fuel and

distillate, or diesel fuel, were sold from the Chenoa site

during those months for cash, on "Shell paper" and on "Chenoa

paper " : -

September Cash "Shell paper" "Chenoa paper l'

Motor Fuel	59,888	54,493	94,522
Diesel Fuel	149,651	253,242	428,427

October

Motor Fuel	74,599	60,563	108,100
Diesel Fuel	191,145	264,088	497,429

November

Motor Fuel	75,416	54,475	98,535
Diesel Fuel	185,465	240,767	509,735

December

Motor Fuel	02,403	42,980	99,753
Diesel Fuel	176,894	226,306	456,122

It was admitted by Counsel, on behalf of Chenoa, that at all

material times sales by Chenoa "on Shell paper" were made on

behalf of Shell. Accordingly, the premises must be taken to

,- 38 -

\

have been operated by Shell as a retail site on a day or days

during each of the months stipulated in s.6(1D) of the

Franchise Act.

It was submitted on behalf of Chenoa that the effect of

the amendment of the Franchise Act which inserted S.6(1D) was

to deprive some franchisees of rights of renewal of their

franchises which they possessed before 1 January 1985.

Accordingly, so it was argued, the Franchise Act as amended,

and, in particular, s.6(1D) should receive the strictest

construction. References were supplied to pronouncements by

other judges of thls Court to the effect that the Intention

of the Franchise Act is to give greater security of tenure to

companies and individuals marketing motor fuel by retail and

to protect them against price discrlmination by their

suppliers; see e.g. J & M O'Brien Enterprises Ptv Ltd v Shell

Companv of Australia	(1982) 45 A.L.R. 81 per	Fox J at	82,
Chronopoulos v Caltex Oil (Australia)	Pty	Ltd (1982)	45

A.L.R. 481 per Brian Brindle (1985) 62 A.L.R. 89 per Burchett J at Fox J at 484 and Mobil Oil Australia Ltd v

96.

However, s.6(1D) makes clear that the Act IS not, after 1

January 1985, to apply to franchise agreements in respect of

premises having the characteristics described in the

sub-section. Franchisees accordingly, are intended no longer to have the protection
which the Act is primarily intended to afford to sellers
generally of motor fuel by retail. The task of construction
therefore is to determine, as narrowly as the language will
permit, the characteristics by reference to which s.6(1D) is
concerned to exempt premises from the protection generally
conferred on retailers by the Franchise Act. occupying those premises,

Mr Parker Q.C. who appeared with Mr. Blackburn-Hart for

Chenoa contended that the requirement in s.6(1D) (a) of the

Franchise Act, specifled as being a retail site in as amended, for premises to have been

a statement lodged under

s.11 of the Sites Act imports a further requirement for such

specification to have been In accordance with, and permitted

by, s.11 of the Sites Act as originally enacted.

It will be remembered that s.ll(l1 of the Sites Act as

originally enacted made	it necessary, where a prescribed
corporatlon specified in the Schedule	or a member or members

of a group of prescribed corporations of which that

prescribed corporation was a member, operated a retail site on 18 September 1980, to include that site in a statement

under that sub-section. It is clear from the evidence that

although no written agreement was then in existence between

Chenoa nd

Shell, occupation of the site at Chenoa was, in September 1980, in

542 Footscray Road, West Melbourne.

It	is	also clear that in that month Chenoa made sales of
motor fuel of	which roughly 57% were	for cash, 29% were on

"Shell paper" and 14% were on "Chenoa paper".

1

Mr Parker accepted, as I understood him, that the

cumulative requirements of paragraphs (a) and (b) of s.7(1)

of the Sites Act in its original form appeared at first sight

to be satisfied	on 18 September	1980 in that a prescribed
corporation was the lessee	of the site at	542 Footscray Road,

West Melbourne, and motor fuel was sold from that site on

behalf of the corporation. However, he contended that the

site could not be taken to have been operated by Shell on 18

September 1980 because of the effect of s.7(2) of the Sites

as orlginally enacted which provided that:-

"Paragraph (l)(b) does not apply in relation to a

retail site if, in the ordinary course of

business, more than 75% of the motor fuel sold by

retail at that site is sold under a franchise

agreement. "

From that contention Mr Parker went on to argue that since at

all material times "all the motor fuel, not part or some part

but all was sold under a franchise agreement," s.7(2) had the

effect of renderlng s.7(l)(b) inapplicable and thus took away

one of the two conditions which had to be satisfied before
Shell could truly be taken to have operated the site on	18
September 1980.
That argument depends, premise that if a franchise agreement can be shorn to have	I consider, on the fallacious
existed in respect of a particular retail site, all sales	at
that site must be taken to have been made under	the franchise

agreement. However, the definition of "franchise agreement"
in the original Sites Act which was in terms identical with
the definition of the same expression in the Franchise Act
quoted above, required such an agreement to contain all of

three discrete provisions each having a distinct contractual

effect. In my view, it was only so much of the legal

relations between a franchisor and a franchisee as embodied

those three provisions which constituted a"franchise

agreement".

Support for thls view is provided, first, by the fact

that a"franchise agreement" is defined as one that

"contams" each of the three categories of provisions. I

regard the word "contains" there as being used in its

ordinary English meaning and equivalent to "comprises",

rather than synonymous with "includes". That meaning is

reinforced to some extent by paragraph (b) of the definition

of "franchise agreement". In the second place, s . 7 ( 2 ) of

the Sites Act as originally enacted expressly contemplated

that motor apportionable between fuel sold "under a franchise agreement" fuel sold at a particular site might be

and fuel not so sold. That contemplation would not be

available if, once a franchise agreement had come into

operation in respect of a particular site, it followed that

all sales of motor fuel at that site were under that As I have already noted, Shell was, on

agreement.

18   September

1980, a lessee of the site at 542 Footscray Road, West

Melbourne, so the requirements of s.7(l)(a) of the Sites Act

as enacted in	1980 were satisfied in respect of that site.
Equally, the admission that at all material	tmes sales by

Chenoa "on Shell paper" were made on behalf of Shell entailed that one of the requirements of s.7(l)(b) of the Sites Act

was satisfied, in that on 18 September 1980 motor fuel for

road vehicles was, at the subject site, sold on behalf of

Shell. Accordingly, the site was to be taken to be operated
by Shell on 18 September 1980 unless it could be said, as at
that day, that in the ordinary course of business more than
75% of the motor fuel sold by retail at that site was sold
under a franchise agreement. Consistently, with the view I

have taken of the self-contained nature of a "franchise

agreement" as defined, motor fuel could only be said to have

been sold under such an agreement if, at least, it had been

the sub~ect of retail sale by the franchisee at a given site.

That flows from paragraph (b) of the definition of "franchise

agreement" which requlres such an agreement to contain

provisions under or by virtue of which the franchisor grants

a right to or otherwise authorizes or permits the franchisee
"to possess, occupy or use the retail site to which the

agreement relates in connection with the retail sale of motor

fuel bv that Person (the franchisee) at hat site" (emphasis

added) . Thus motor fuel could only be said to have been

sold at a particular site under a franchise agreement within

S .

s . 7 ( 2 ) of the original Sites Act if it had been sold the

franchisee. Fuel sold at the site on behalf of the

franchisor could not be said	to have been	sold	"under a
franchise agreement".

In the light of the evidence that sales on "Shell

paper" from the site at 542 Footscray Road, West Melbourne,

in September 1980 were of the order of 2 9 % of all sales made

from that site, the applicant has not discharged the onus,

which I consider it bears, of showing that as at 18 September

1980 in the ordinary course	of business more than	7 5 % of the
motor fuel sold by retail at that	site was sold under	a

franchlse agreement. Accordingly, an obligation was imposed
by s.ll(l)(a) of the Sites Act to lodge a statement pursuant

thereto in respect of the operation of the subject site.

It was then argued, in the alternative, on behalf of

Chenoa that, even if the premises at 542 Footscray Road, West

Melbourne were capable of being the subject of a statement

lodged pursuant to s.ll(l)(a) of the original Sites Act, they

were never properly included in a statement which complied

with that paragraph. Accordingly, so it was argued, the

premises were never, in a statement lodged under	5.11 of the
Sites Act, at any time before	1 September 1984, specified as
being a retail site operated by	a particular corporation so
as	to render the Franchise Act inapplicable to them by
operation of s.6(1D)	of that Act.

i- 44 -

In seeking to make out that argument. counsel for

Chenoa instanced irregularities in the statement constituted by the computer
printout with additions furnished by Shell under cover of its a number of alleged deficiencies or

letters of 17 and 20 October. It was that document, which

was primarily identified by counsel for Shell as the

statement lodged under s.11 of the Sites Act, containing the

specification of the subject premises, which attracted the

operatlon of s.6(1D) of the Franchise Act.

In the first place, it was pointed out tha the letter

of 17 October 1980 stipulated that Shell had prepared its

return on an assumption as to what was required to be

included in it, which was justified only because Shell

imputed to the legislature	an intention not evinced by the
actual language of the Sites Act.	In conjunction with that

stipulation, Shell's return was hedged about with the qualification that it had been completed "on the basis that

it is without prejudice to our position and rights under the

Act as it presently stands".

view, a contention that a statutory return is being filed "without prejudice" to some asserted right of the

In my

party filing it, has no effect on the validity	or otherwise
of the return.	The proper function of the claim that a
communication is "without prejudice"	is to enable a party to

Y i

a dispute or negotiations to make, or respond to, an offer of

compromise without the risk	of his communication being relied
on as an admission in litigation before a court. See	e.g.

Walker v Wilsher (1889) 23 Q.B.D. 335 per Lindley L.J. at 337

and Tomlin v Standard Telephones and Cables, Ltd.,	C19691 3
All E.R. 201.	The qualification "without prejudice" has no

legal effect communication which contains no offer and is made where, as here, it is attached to a

by person

who is not in dispute	or negotiations with the recipient.
Thus, in Re Daintrev;	Ex parte Holt C18931 2 Q.B. 116 Vaughan
Williams and Bruce	JJ. observed, at 119:-

"In our opinion the rule which excludes documents

marked 'without prejudice' has no applicatlon

unless some person is in dispute or	negotiation
with another, and terms are offered for the
settlement of the dispute or negotiation, and	it
seems to us that the judge must necessarily be entitled to look at the document in order to determine whether the conditions, under which alone the rule applies, exist.
The rule is a	rule adopted to enable disputants
without pre~udice	to engage in discusslon for the
purpose of arriving at terms	of peace, and unless

there is a dispute or negotiations and an offer

the rule has no application. It seems to us

that the judge must be entitled to look at the

document to determine whether the document does
contain an offer of terms. Moreover, we think

that the rule has no application to a document

which, in its nature,	may prejudice the person to
whom it is addressed.	It may be that the words

'without prejudice' are intended to mean without
prejudice to the writer if the offer is rejected;
but, in our opinion, the writer is not entitled

to make this reservation in respect of a document

which, from its	character, map prejudice	the
person to whom it is addressed	if	he should
reject the offer,	and	for this reason also we

think the judge is entitled to look at the

document to determine its character."

i

Accordingly, I consider that the only effect of the

qualification	in	the	letter	of	17 October	1980	which
accompanied	Shell's	initial	return	was	to	put	the

departmental officials on notice as to certain contentions

which Shell might choose to advance in the future about the
proper interpretation of the Sites Act. Having elected to

lodge a return, Shell must be taken to have intended that the

return as lodged should be the document by which its

compliance with the requirements of the Act should be judged.

As indicated by Long Innes J., in another context in Havnes v

11927) 27 S.R. (N.S.W.) 480 at 489, the effect of that

election cannot be removed merely because	it was claimed to
have been exercised without prejudice.

It was next argued on behalf of the applicant that the initial return lodged on 20 October 1980 was not lodged by "a

prescribed corporatlon" as required by s.11 of the Sites Act

as orlginally enacted. "Prescribed corporation", it will be

recalled, was defined by 5 . 3 of that Act as meaning:-

(a) a corporation specified in the Schedule;

(b) any other corporation that refines

petroleum; or

(c)	a corporation that is an associate of a
corporation referred to in paragraph (a) or (b);"

.

It was provided in turn by s . 5 ( 1 ) and ( 2 ) :

"(l) For the purposes of this Act, the

following persons are associates	of a person-
(a) where the person is a body corporate -	a

related body corporate;

(b) a body corporate whose directors are

accustomed or under an obligation, whether

formal or informal, to act in accordance

with the directions, instructlons or

wishes of the person or, where the person
is a body corporate, of the directors of

the person;

(c)	a body corporate in accordance with the
directions, instructlons or wishes of
which, or of the directors of which, the
person accustomed is or under an
obligation, whether formal or informal, to

act;

(d) a body corporate in which the person holds

a substantial interest.

( 2 ) For the purposes of this section, a

person shall be taken to hold a substantial

interest in a body corporate if the person, alone

or together with any associate or associates of

the person, is in a position to control not less

than 15% of the voting power in the body

corporate or holds interests in not less than 15%

of the issued shares in the body corporate."

The reference in s.5(l)(a) to "a related body

corporate" further requires reference to	s . 4 ( 1 ) and	( 2 ) which
stipulate that:-

"(1) Where a body corporate-

(a)	is the holding company of another body corporate;
(b) is	a subsidiary of another body corporate;

or

..

- 48 -

(c)	is a subsidiary of the holding company of another body corporate,
that first-mentioned body corporate	and that

other body corporate shall, for the purposes of

this Act, be deemed to be related to each other.

( 2 ) For the purposes of this section, a

body corporate shall, subject to sub-section ( 4 ) ,

be deemed to be a subsidiary of another body

corporate If -

(a) that other body corporate-

(i) controls the composition of the

board directors of the f

first-mentioned body corporate;

(li) is in a position to cast, or

control the casting	of, more	than
one-half of the maximum	number	of
votes that might be cast	at a

the general me ting of

first-mentioned body corporate; o r

(iii)holds more than one-half of the

issued share capital of the

first-mentioned body corporate

(excluding any part of that issued

share capital that carries no

right to participate beyond a

specified amount in a distribution

of either profits or capital); or

(b)	the first-mentioned body corporate is a
subsidiary of any body corporate that is
that other body corporate's subsidiary

(including a body corporate that is that

other body corporate's ubsidiary by

another application or other applications

of this paragraph). "

The Schedule to the Sites Act was "Shell Australia Limited". It	relevant prescribed corporation specified in the
is clear that The Shell Company	of Australia Limited was not
itself a prescribed corporation specified	in the Schedule to

the Sites Act. Nevertheless, it is trite law enshrined in

i

the maxim sui facit per alium facit per se that a person,

including a company, may do by means of an agent whatever he

may do himself. Of course, there are exceptions, as where a

statute requires a return to be signed by the principal or some specified signatory. However, there was nothing in the original Sites Act or in the appropriate form, presumably

approved by the Minister,	as embodied in the telex message of
15 October 1980. to require any signature	at all on a return
lodged under s.11 of that	Act.

Indeed, the actual lodging of a return by a prescribed

corporation could only be effected by a living agent; (see e.g. Tesco Supermarkets Ltd. v Nattrass C197211 A.C. 153 at 170). Allowing for that necessity, I can discern no reason

in the language of the legislation or the nature of a

prescribed corporation why a prescribed corporation specified
in the Schedule to the Sites Act could not interpose between
itself and the living agent who actually lodged the return,

another agent, which might itself be a corporation, to which

the collation of the return had been entrusted.	The facts
of the present case raise the very strong inference that the

Shell Corporation of Australia Ltd was interposed as agent of

Shell Australia Limited in just that way.

In the first place, The Shell Company of Australia

Limited has at all material times been a wholly-owned

subsidiary of Shell Australia Limited, and has been the

c !

operating company whose officers would be expected to have knowledge of the matters required to be included in a return

lodged under 5.11. (Shell Australia Limited, although it has

directors and a secretary, does not directly employ any

staff.) Secondly, Mr Froggatt (as he then was), to whom the

departmental telex message of	15 October 1980 was addressed,
was both Chairman	of Directors and Chief Executive Officer of

Shell Australia Managing Director of the Shell Company of Australia Limited. Limited and Chairman of Directors and

Thirdly, the covering letters	of 17 and 20 October 1980, with
which the initial Shell return	was lodged, were signed "B.G.
Duke, Planning and Investment Manager,	FOR THE SHELL COMPANY

OF AUSTRALIA LIMITED". Mr Duke at hat time was charged with performing duties on behalf of the Shell group of companies

In Australia. As he saw it "the activities that are

required to be conducted on behalf of (Shell Australia

Limited) are conducted by staff in the main employed by the

Shell Company of Australia Limited and that relationship and

that performance of duties on behalf of other members of the

group is common within the Shell Group in Australia".

Against that factual background, I am led to conclude

that the return lodged under cover of the letters	of 17 and
20 October 1980, signed by Mr	Duke, was lodged by Shell

Australia Limited as contemplated by	5.11	of the original
Sites Act.

\

The challenge Shell's reliance on next ground on which the applicant sought to

s.6(1D) of the Franchise Act

was that the return in which the subject premises were first

specified was lodged out of time. The time	limit relied on
was imposed by the introductory words of	s.11(1) of the Sites

- Act as originally enacted, which provided that "A prescribed

corporation specified in the Schedule shall, within 30 days

after the commencement of this Act, lodge with an authorized officer - ... a statement in accordance with the appropriate

form .	. . ' I .
Since the commencement of that Act was on September 1980, each prescribed corporation specified in the	19

Schedule was required to lodge a statement by 19 October

1980.    Because the statement lodged by Shell was under cover

of two letters, the later of which was dated 20 October 1980,

the lodging was, at best, so it was argued, one day late.

In my view the answer to this argument is provided by

s.ll(6) of the	Sites	Act	as	originally	enacted	which
provided:-

"(6) Where a statement is required by a

provision of this section to be lodged within a

particular period, the obligation to lodge that

statement continues, notwithstanding that that

period has expired, until that statement is

lodged.

That sub-section in terms does not create a new obligation

arising after

time what I have just said be wrong, a requirement limit imposed by, for example,

the grossly out of time, is still done pursuant to s.ll(1).

..

\ - 52 -

s.ll(l)	has expired. Rather, it preserves the obligation
created by	s.ll(l) itself. Accordingly, the lodging of a

statement of the type contemplated by s.ll(l), even if

If

to lodge an

admittedly late statement out of time must be found in
s.ll(6)- On either view, the statement whenever lodged, is
truly "lodged under section 11" of the Sites Act within the

meaning of s.6(1D) of the Franchise Act as amended.

Another ground on which it was argued that the document

forwarded by Shell under cover of its letters of 17 and 20

October 1980 was not a statement lodged under	5.11 of the
Sites Act, was that	it did not reproduce the column headings
stipulated in the departmental telex message of 15	October.
For example, the heading	of the fourth column of the form

stipulated by the telex message was "SPECIFY WHETHER MOTOR FUEL FOR ROAD VEHICLES KAS SOLD AT THE SITE BY OR ON BEHALF OF THE RELEVANT CORPORATION OR BY A PERSON UNDER AN AGREPlENT

REFERRED TO IN SUB-PARAGRAPH	7(1)(B)(II) OF THE ACT". The
heading of the fourth column of the Shell return was much

abbreviated to read "SECTION 7(l)(b)(ii)?"

Doubt has been expressed as to whether it is fruitful to inquire whether a statutory provision, like that in

s.ll(l) requiring a statement to be	"in the appropriate
form", is mandatory or directory; see	.g. Tasker v Fullwood

..

- 53 -

C19787 1 N.S.W.L.R.	20 at 23. However, it remains as
necessary now 3s	when Lord Penzance distilled the relevant
principles in Howard v Bodinston	C18773 2 P.D. 203 at 211 to

construe the statutory provision in its context having regard

to the subject matter, the importance of the provision and

the general object intended to be secured by the Act, and to

decide whether it evinces an intentlon that failure strictly

to comply wlth the provision should nullify acts done in

purported discharge of some duty or exercise of some right

imposed or conferred by the statute.

Taking that approach to the requirement in s.ll(l) of the Sites Act that a statement be in the appropriate form, I

have formed the clear view that it was not intended that a

failure to reproduce verbatim in the statement actually
lodged, the headings in the appropriate form, should render

the statement as lodged a nullity. As I discern it, the

relevant object of the Sites Act was to obtain a statement of

the number and identity	of retail sites operated by each
group of companies comprising	a prescribed corporation named

Schedule commencement of the Sites Act, by reference and its associated companies, at the

in the

to which it could

be determined whether that group had, after the expiration of

two years, reduced the number of its sites to, or below. the

permitted maximum. It would not conduce to the attainment of

that object if the initial return were rendered a nullity

because of some discrepancy between its headings and those in

the prescribed form. A similar approach was taken by the

Privy Council in Vita Food Products, Inc. v Unus Shippinq

C19392 requirement that "a bill of lading shall contain an express
statement that it is to have effect subject to the provisions
of (The Hague Rules) as expressed in this Act". See also A.C. 277 at 292-295 to a statutory

Co., Ltd.

Samuel Montaqu & Co. Ltd. v Swiss Air Transport Co. Ltd.

C19667 2 Q.B. 306 where Lord Denning	M.R.,	at 314, said of a
similar requirement as to an air consignment note,	that	it
should not be given	" s o rigid an interpretation	as to hamper

the conduct of business. I do not interpret the article as

meaning that the waybill must contain the statement verbatim.
It is sufficient if it contains a statement to the like

effect".

I have also been influenced, in reaching the view which

I have	on this contention, by the consideration that the
appropriate form and its headings (if any)	were not set out

in the Sites Act itself but were left by s.ll(5) to be

prescribed by regulations, or failing that, to be approved by

the Minister; c.p. Woodward v Sarsons (1875) 10 L.R.C.P. 733

at 746-740.

A similar approach entails the rejection of the next

ground on which it was contended that the initial Shell
return was not a "statement lodged under 5.11 of the Sites

; 55 -

Act". That was that in the first column headed	"NAME OF
CORP", which corresponded with the column headed "NAME	OF

RELEVANT CORPORATION" in the departmental telex message, there appeared on the first sixteen pages of the return, including that on which the subject premises were specified,

only the single word "Shell". On the remaining eight pages it seems that the words "The Shell Co. of Aust. Ltd" appeared in that column only once on each page beside the first site

that "understanding at the time that the requirement was for us to
submit a return on behalf of the Shell group of companies, in page. The use of the word "Shell"

specified on standing alone was explained by

Mr Duke as resulting from his

other words, all members of the group".

In my opinion, the fact that ambiguities or fails to specify at a statement contains

all, or with sufficient

precision, some matter stipulated in a form prescribed as

contemplated by a statutory provislon, does not prevent it

from being a statement "lodged under" that provision. If the

statement omits some material particular	or falsely includes
some matter, it may to that extent be invalid and so outside

the statutory description. However, that is not this case.

The same reasons justify the rejection of two other

bases of the applicant's attack	on the statement lodged under
cover of the letters of	17 and 20 October 1980.

56 -

In the first place it was contended that to provide the

information sought by the departmental telex message to be inserted in the fourth column to be headed, "SPECIFY

THE RELEVANT CORPORATION	OWNED, OR WAS A LESSEE OR LICENSEE
IN RESPECT OF, THE SITE", by use of the single word	"leased",

created another ambiguity. That was said to arise from the

posslbility that "leased" might connote either that a

relevant Shell company was the tenant of the site and

"leased" it from some lessor,	or that it was a landlord which
"leased" the site to a tenant such as Chenoa.	I consider

that possible ambiguity to be excluded by the fact that the
entry in the fourth column in respect of many other sites
specified in the first Shell return is comprised by another
single word "owned". That makes it clear that the fourth
column of the return was filled up solely by reference to the
legal relation in which the relevant Shell corporation stood

to the site in question.

Secondly, it was argued that in respect of the subject

site the answer "no" to the question raised by the heading to

the fifth column was also ambiguous. The heading to that

column in the appropriate form was "SPECIFY WHETHER MOTOR F[IEL FOR ROAD VMICLES WAS SOLD A T THE SITE BY OR ON BEHALF

OF THE RELEVANT CORPORATION OR BY A PERSON UNDER AN AGREEMENT

REFERRED TO IN SUB-PARAGRAPH 7(1)(B)(II) OF THE ACT". The

answer "no" to a requirement of that kind is capable, as Mr

Parker contended, in certain contexts of importing a negative

to each part of the question, and so, here, of indicating

that fuel was not sold at the site either (i)	bp or on behalf
of the relevant corporation, or	(ii) by a person under an

agreement referred language of s.7 of the Act suggests that the two forms of to in ~.7(1)(b)(ii). However, the

sale by retall of motor fuel at	a given site envlsaged by	ss.
7(l)(b)(i) and	(ii)	were seen as being mutually exclusive.

At all events, it was understood in that way by the compiler
of the initial Shell return who adopted the abbreviated

heading "SECTION 7(l)(b)(ii)?" to the fifth column and

Invariably answered "no". In other words, the m e w was taken

that a retail site included in the statement as operated by a

Shell corporation must be one at which motor fuel was sold by

retail by or on behalf of the corporation if it were not one

at which fuel was sold by retail by a person under an agreement of the kind described in s.7(l)(b)(ii). Understood in that way, the information supplied in the fifth column of

the initial Shell return was not ambiguous.

Even if, contrary to the conclusions just expressed,

there had been an ambiguity, as Mr Parker argued, in the way

in which Shell filled up either or both the fourth and fifth

columns of its initial return, for the reasons which I have

already indicated in respect of the first column. that would

not be fatal to Shell's contention that the return was a

statement lodged under s.11 of the Sites Act.

Another attack on the sufficiency of the initial Shell

return was directed to the statement that the subject

premises at 542 Footscray Road, West Melbourne, were a

"diesel fuel site".	It was pointed out that Mr Duke had
stated in evidence that he was unable	to recall specifically

on what information he relied when he inserted "D/F" in the

relevant column of the first return.

By s.3(1) of the "diesel fuel site" was defined to mean "a retail site the principal use of which is the sale by retail at the site of	Sites Act	as	originally	enacted
diesel fuel disclosed that there were six pumps for diesel fuel and six for motor spirit at the subject site. It was also revealed	for trucks	or	omnibuses".	The evidence

that on each of 1, 15 and 30 September 1980 sales in litres

of diesel fuel far exceeded those of motor spirit. I

therefore draw the inference that on 18 September 1980	the
principal use of the site was for the sale by retail of
diesel fuel for trucks. Accordingly, the subject premises

were correctly returned in Shell's initial statement under

5.11 of the Sites Act as a diesel fuel site. However, even

if the premises had been incorrectly characterized as a
diesel fuel site I consider that would not mean that their
inclusion in a statement under s.11 of the Sites Act was a

nullity for the purpose of the application of s.6(1D) of the

Franchise Act as amended.

. .

r -

I . 1 ,- 59 -

The final speci€ic respect in which the applicant

submitted that the return lodged by Shell under cover of its

letters of 17 and 20 October 1980 was deficient was that it

consisted of a photocopy of a computer printout and the

handwritten additions made by Miss Hine and Mr Duke. Mr

Parker pointed to the absence of any explanation by Shell for

lodging a photocopy	as confirming that “something in those
days went wrong and that really no attention was given	to
preparing a proper return”.

Thus, the lodging of a photocopy was indicated as being

another act of non-compllance with s.11 of the Sites Act

which, although insignificant in itself, should encourage the

Court to conclude that, in combination, the alleged

shortcomings in the preparation and lodging of the initial
Shell statement meant that there had not been substantial

compliance with the section.

I have been unable to find anything in the original

Sites Act or in the appropriate form presumably approved

pursuant to	s.11(5) of that Act, which required that the
return as lodged must not	be a photocopy of a document
originally compiled by computer, typewriter or handwriting	or

a combination of those means. Accordingly, there is nothing

which permits	a finding that the statement	as lodged by Shell
wa5 not lodged under	5.11	of the Sites Act as originally

c

enacted. For the reasons indicated, none of the matters to which the applicant pointed, operated either alone or in

conjunction with any one or more of the others of those

matters to exclude the conclusion that the subject premises were in a statement lodged under 5.11 of the Sites Act at

some time before	1 September 1984, specified as being a
retail site operated by	a particular corporation, within the

meaning of s.611D) of the Franchise Act as amended. I am

confirmed in this view by the recollection that s.6(1D) was
enacted in 1984 after the administering departments had

monitored the compliance with both the Sites Act and the

Franchise Act by each of the major petroleum refining and

distributing companies for the past four years. Had some
deficiency in compliance by the Shell group of companies been
regarded by the legislature as warranting a modlfication of
s.6(1D) in its application to that group, it would have been
a simple matter expressly to incorporate that modification in

the legislation.

Since I have already found that the subject premises

were operated by Shell as a retail site on a day or days

during each of September, October, November and December

1984, and since there is no evidence that in any subsequent

month Shell or any related corporation ceased to operate the

premises as a retail site, it follows that by virtue of

s.6(1D) of the Franchise Act, that Act does not apply to any

franchise agreement in relation to which the premises are the

L	:.	I
..
L .	i	- 61 -

marketing premises. Accordingly, the amended application

must be dismissed.

I shall hear Counsel on any directions which should be

given for the filing and service of a Defence to Shell's

Cross-Claim for possession of the subject premises, and for

the hearing of that cross-claim.

I certify that this and the

sixty (60) preceding pages are a

true copy of the Reasons for

Judgment herein of his Honour	Mr.
Justice Ryan.

v

Associate:  O

Appearances

Counsel for Chenoa Pty. Ltd.	:	R.W. Parker Q.C. and
P. Blackburn-Hart
Solicitors for Chenoa Pty.	Stojanovic & David
Ltd.
Counsel for Shell Company of	:	B.J. Shaw Q.C. and J.E.
Australia Limited	Middleton
Solicltors for The Shell	Arthur Robinson & Hedderwicks
Company of Australia Limited
Dates of Hearing	16-19, 23-25 March, 1987
4, 5 May, 1987