Lyndel Nominees Pty Ltd v Mobil Oil Australia Ltd Mogap Pty Ltd v Mobil Oil Australia Ltd

[1997] FCA 921

FEDERAL COURT OF AUSTRALIA

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 835  of   1995

BETWEEN:

LYNDEL NOMINEES PTY LTD
APPLICANT

AND:

MOBIL OIL AUSTRALIA LIMITED
RESPONDENT

AND

BETWEEN:

MOGAP PTY LIMITED  NG 841 OF 1995
APPLICANT

AND:

MOBIL OIL AUSTRALIA LIMITED
RESPONDENT

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 835 of 1995

BETWEEN:

LYNDEL NOMINEES PTY LTD
APPLICANT

AND:

MOBIL OIL AUSTRALIA LIMITED
RESPONDENT

AND

BETWEEN:

MOGAP PTY LIMITED  NG 841 OF 1995
APPLICANT

AND:

MOBIL OIL AUSTRALIA LIMITED
RESPONDENT

JUDGE:

WILCOX J

DATE:

5 SEPTEMBER 1997

PLACE:

SYDNEY

EXTEMPORE REASONS FOR JUDGMENT

WILCOX J: These two matters are due to be heard by a Full Court on the 15th of this month.  They were put back in the list this morning at the request of one or both of the parties and two topics have been discussed.

The first topic can be disposed of fairly quickly; it is in relation to costs of the proceedings before me.  When I gave judgment, I reserved the costs of the proceedings.  I did that deliberately.  I was conscious of the fact that the judgments I then handed down dealt directly with only six out of some 120 or 130 cases.  Those six were selected by the parties, at my invitation, in order to raise various permutations of the facts thought typical of most, if not all, of the franchisees’ positions.  The idea was that rulings would be obtained on those cases, and subject to any appeal, those rulings would enable the parties to determine what should be the result of the other cases. 

As it happened, the selected cases did evidence a variety of facts.  As it also happened, I found in favour of the applicants’ position in relation to some of them but not on others.  I indicated that, if either party wished to have leave to appeal, then that would be granted.  Both parties sought, and obtained, leave to appeal.  It did not cross my mind that either party would be canvassing on appeal any question in relation to the costs of the hearing before me.  Whatever may be the result in the Full Court, there will remain questions regarding the other cases.  It might turn out that the Full Court's decision will leave little scope for argument in relation to other cases; but it may be impossible to say that for certain, without some investigation of the other cases.

Although Lyndel Nominees' case was a separate action, in respect of which I was able to make final orders, it was heard with the Mogap action.  Ordinarily one would take that into account in determining what costs order should be made.

Today I have been asked to make costs orders in favour of the applicants.  I decline to do so.  It seems to me the appropriate time to look at costs is when the Court and the parties have the benefit of the ruling of the Full Court on the test cases that have been selected, and the parties have had an opportunity of considering the ramifications of the Full Court's decision for the remaining cases.  Perhaps no further hearing will be required; perhaps an extensive further hearing will be required.  The time to look at costs will be when these matters are known.  At this stage I have no real view as to what would be the appropriate order for costs and I decline to attempt to form a view.

The other topic raised this morning, in my opinion, should never have had to be raised.  It appears that, on 5 August 1997, Mobil gave to Petrex Pty Limited notice of expiration of its franchise.  The letter required Petrex to vacate its site no later than midnight on 30 September 1997.  Petrex was one of the applicants in the Mogap case.  I have been told today that it is common ground that it was one of the franchisees who achieved 90 per cent in the Circle of Excellence awards for each of the four years in relation to which the promise, the subject of this litigation, applies.  In other words it fell within the same category as Lyndel Nominees and, in the view I expressed in my judgment, was entitled to an automatic extension.

Mr Bathurst QC, on behalf of Mobil, told me this morning this notice was given simply to preserve Mobil's legal position.  If that was so, it is unfortunate, to say the least, that nobody told this to Petrex.  Any recipient of that letter would assume it meant what it said, and that Petrex had to make arrangements to be out of the site within a period of less than eight weeks from the date of the notice.  It must have been extremely disturbing for the directors of Petrex to receive that letter.  They apparently referred the letter to the solicitors acting on behalf of the applicants in these matters.  The solicitors corresponded with Mobil's solicitors and there was then an agreement for, in effect, a consent injunction.  I think it is unfortunate that the matter  had to be dealt with in that way.

I am further informed that there are a number of other franchisees in the same position.  Apparently there is no dispute about the correctness of the list of  those franchisees, prepared by the applicants’ solicitors.  Mr Bathurst tells me Mobil the proposes to give notices to these franchisees but will consent to individual orders in relation to each of them.  I do not think this should be necessary.  I am disappointed the matter could not have been dealt with by agreement between the solicitors along the lines of the agreement contained in the draft short minutes of order regarding Petrex, handed up this morning.  However, the solicitors have failed to agree and I am asked by counsel for the applicants to make an injunction.

A question arises about an undertaking as to damages.  It is usual to require an undertaking as to damages in the case of an interlocutory order; but this is an unusual case.  The franchisees, the subject of the proposed order, are all in the same category as Lyndel Nominees.  Because Lyndel's case was picked out as a test case, it has the benefit of a final order.  So it obtains the benefit of an order, pending the Full Court’s decision, without the necessity of giving an undertaking as to damages.

It seems to me it would be anomalous that the franchisees who were not selected as test cases, and whose cases were not heard simply because of the inability of the Court and the parties to deal simultaneously with some 120 or 130 cases, should find themselves in a worse position - if the case turns out badly from their point of view - than a franchisee whose case was selected as a test case and was successful at first instance.  Although it is the usual course to require an undertaking as to damages, fairness dictates that the Court not require an undertaking in these cases.

I do not propose to make any costs order today.  In relation to the injunction question, I order that, until further order of a Judge or of the Full Court, the respondent comply with its obligations under all existing agreements with the franchisees whose names and addresses are set out in the Schedule to the Notice of Motion filed by the solicitors for the applicants on 4 September 1997.  That order is made on the basis that each of those persons will comply with its obligations under each of those agreements and agrees not to assert in these proceedings, or in any other proceedings, that this order amounts to circumstances that would entitle it to any right under the Petroleum Retail Marketing Franchise Act.  I grant liberty to apply at any time arranged with my Associate.

I certify that this and the preceding three (3) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Wilcox

Associate:

Dated:            5 September 1997

Counsel for the Applicant:	R W R Parker QC and M Tubbs
Solicitor for the Applicant:	Stojanovic Solicitors
Counsel for the Respondent:	T Bathurst QC and L V Gyles
Solicitor for the Respondent:	Cowley Hearne
Date of Hearing:	5 September 1997
Date of Judgment:	5 September 1997