Chenoa Pty Ltd v The Shell Company of Australia Ltd [1986] FCA 365

Federal Court of Australia|1986-08-22|Before: Woodward J

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 of an action which is due to come

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

West Melbourne. If the applicant is entitled to the protection of the Petroleum Retail Marketing 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 parties, oz the Act, but rather in accordance wit 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

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 questfon -to be-tried ~raised by the present application

(see Epitoma Pty Ltd v AMIEU (1984) 3 FCR 55 at 58).

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 jointly 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

I cannot help feeling that a sensible exchange of correspondence Letween solicitors could have solvee this minor 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 parties 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

Counsel for the applicant said the existing situation should be preserved, and that his client had given evidence that

it would be adversely affected by not having the use of the $2500

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 franchisees from any oppressive conduct by 011 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 exemption

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

that the unilateral change in commission rates was unlawful.

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

suggestion that the applicant could have difficulty complying with its undertaking, if called upon to doso, I donot find it

The applicant having given the usual undertaking, the respondent will be enjoined until final determination of this action, or further order, from varying the rates of commission

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

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

Counsel for the applicant : Mr R.W.R. Parker QC with Mr P.D. Schell

Counsel for the respondent : Mr B.J. Shaw QC with Mr J.E. Middleton

At a glance

Court

Decision date

Before

Source

Judgment (32 paragraphs)

Cases Cited (1)

Cited By (2)