Chenoa Pty Ltd v The Shell Company of Australia Ltd

[1986] FCA 365

NOTE: Not consldered appropriate for reportlng -

limited distributlon only.

IN THE FEDERAL COURT OF AUSTRALIA )

)

VICTORIA DISTRICT RECISTRT	)	VG	No.	273 of 1985
)
GENERAL DIVISION	)
BETWEEN:

CHENOA PTY LIMITED Applicant

and

THE SHELL COMPANY OF AUSTRALIA LIMITED Respondent

MINUTES OF ORDER

COURT: Woodward J.

DATE: 22 August 1986

PLACE: Melbourne

THE COURT ORDERS THAT:

1. 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.

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2. The respondent pay the applicant's costs, other than the

costs of senior counsel, of the notice of motion dated

12 August 1986 and the amended notice of motion dated

14 August 1986.

(m:	Settlement and entry of orders is dealt with in 0.36 of
the Federal Court Rules.)

- NOTE: Not consldered appropriate for reporting -

limited dlstribution only.

IN THE FEDERAL C O U R T O F AUSTRALIA )

)

VICTORIA	DISTRICT	REGISTRY	)	No. VG 273 of 1985
)

GENERAL DIVISION )

CHENOA PTY LIMITED Applicant

and

THE SHELL COMPANY OF AUSTRALIA LIMITED Respondent

COURT: Woodward J.

DATE: 22 August 1986

PLACE: Melbourne

REASONS F O R JUDGMENT

This is an application, by way of notice of motion, for

an interlocutory injunction which, in my opinion, should never

have come to a hearing. In the final analysis, the point at issue

is which party should have control of an amount of some $2500 per

month, pending the determination f an action which is due to come

to trial in two or three months time.

The important question at issue in the ultimate hearing

is whether the respondent has validly terminated the Consignment Distributor Agreement under which the applicant has for several years been distributing the respondent’s products from premises in

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West Melbourne. If the applicant is entitled to the protection of

the Petroleum Retail Marketinq Franchise Act 1980 (’the Act’) then

the agreement has not been validly terminated. The action will

determine the disputed question whether the applicant comes within

the protection afforded by the Act, or whether the premises in

question are affected by an exemption provision (s.6(1D)). In the

meantime, the respondent has agreed not to proceed with the action

for ejectment it has begun in the Supreme Court of Victoria

However, by letter dated 26 June 1986, the respondent

has sought to vary the conditions under which the applicant sells

the respondent’s petrol from the subject premises, by reducing the

rates of commission on sales to which the applicant was previously

entitled. It has not purported to do so pursuant to the agreement

between the Farties, 0-r the ?,c’;, but rather in accordance --11:’1

what it sees as commercial fairness in a situation where, it

claims, the applicant has no right to be on the premises at all.

The proposed reduction in commissions payable would amount to about $2,500 per month.

It was accepted in argument before me that the validity

of the respondent’s present stand would be wholly, or at least

substantially, determined by the answer to the basic question

raised by the litigation. It was also accepted that there was a

serious questi-on *to be-tri-ed --raised by the present application

(see Epitoma Ptv Ltd v AMIEU (1984) 3 FCR 55 at 5 8 ) .

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I pointed out to counsel how limited the area of dispute

really was and invited them to see if they could not reach some

arrangement about the disputed commission payments which would

hold the situation until the main action was determined. In the

event, the respondent offered to pay the moneys into a trust fund

controlled ~ointly by its and the applicant's solicitors, where

interest could be earned until the matter was concluded. Counsel for the applicant said his client would be disadvantaged by not

having the use of the moneys but, in addition to the usual

undertaking as to damages, was prepared to give security for the

moneys in question.	The parties were unable to bridge this gap
between them.

I cannot help feeling that a sensible exchange of

[email protected],Ca kstweer. solicitors could have solv?l thts alncr

difference before the heavy costs of briefing senior counsel on

both sides and, in the case of the applicant's legal advisers,

travelling from Sydney, had been incurred. By the time the matter

came before me, the partles were committed to these costs and

there was	no particular advantage in either party giving way.
In these circumstances, I am called upon to exercise a

discretion on a very fine balance. The weights to be put into

each side of the balance are very light and	I shall not deal with
the arguments in any detail.

Counsel for the appllcant said the existlng situation

should be preserved, and that his client had glven evidence that

it would be adversely affected by not having the use of the $ 2 5 0 0

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per month, which claim had not been challenged; it could not be

suggested that the respondent would be noticeably affected by

being deprived of the use of the money, so the balance of

convenience was in the applicant‘s favour. Counsel relied also

upon the clear policy of the Act to protect franchlsees from any

oppressive conduct by oil companies. The applicant was clearly

such a franchisee, even if it might be found that the premises

were excluded	from the operation of	the Act by an exemptlon
clause.

Senior counsel for the respondent contented himself by

arguing that interlocutory injunctions which require the payment

of money are not normally given, the matter is a tr fling one, and

damages would provide a sufficient remedy, if it should turn out

that the unilateral change in commission rates was unlarfzl.

As I have indicated, I think the applicant’s case for an

injunction is weak. However I think the respondent’s argument for

refusal is even weaker. The respondent is seeking to alter the

present arrangement between the parties. Having staked its claim

to do so, I think it should have indicated that it would be

content for the applicant to keep a record of the amounts involved

so that this comparatively minor issue could be determined at or

after the final hearing. In the absence of any such proposal, I

think-the .applicant was justified in taking out its notice of

motion and seeking to preserve the present position of the

parties. Its offer to provide security for the amounts involved was not taken up by the respondent and, in the absence of any

+,- *

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suggestion that the applicant could have difficulty complylng with

its undertaking, if called upon to	do SO,	I	do not find it
necessary to order security.

The applicant havlng glven the usual undertaklng, the

respondent will be en~olned until final determination of this

action, or further order, from varying the rates of commisslon

from those allowed and paid by the respondent to the applicant in

June 1986.

The respondent must pay the costs of this notice of

motion, but those costs should not include provision	for	senior
counsel. In my view there was no aspect of this issue which

warranted the attention of senior counsel.

I certify that this and the

four ( 4 ) preceding pages are a

true and accurate copy of the

Reasons for Judgment herein of

The Hon Mr Justice Woodward

Associate

Dated: 22 August 1986

Date of hearing : 15 August 1985

Counsel for the applicant : Mr R.W.R. Parker QC

with Mr P.D. Schell

Solicitors : Messrs Stojanovic & David

Counsel for the respondent : Mr B.J. Shaw QC

with Mr J .E . Middleton

Solicitors : Arthur Roblnson & Hedderwicks