Lay v Alliswell Pty Ltd [2001] VSC 385

Supreme Court of Victoria|2001-10-12|Before: Balmford J

For the reasons given, the appeal against both decisions will be dismissed. Counsel may wish to make submissions as to costs.

Retail Tenancies Reform Act 1998

Fancourt v Mercantile Credits Ltd [1983] HCA 25; (1983) 154 CLR 87

Far Horizons Pty Ltd v McDonald's Australia Ltd [2000] VSC 310

Garry Rogers Motors (Aust) Pty Ltd v Subaru (Aust) Pty Ltd [1999] FCA 903; (1999) ATPR 41-703

General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125

Jam Factory Pty Ltd v Sunny Paradise Pty Ltd and Ohers [1989] VicRp 54; [1989] VR 584

Popovski v Ericsson Australia Pty Ltd [1998] VSC 61

I would, with respect, adopt that passage, as I have done on other occasions (see Pettet v Readiskill [1999] VSC 195 and Dickson v Barrow [2001] VSC 353) in respect of both questions in the order of the Master. On the basis of the same considerations as moved Ashley J in Popovski, given the agreement of counsel, and being satisfied that no injustice would thereby be done to either party, I directed that this appeal be decided on the basis that the questions be read as though expressed in the terms set out in the preceding paragraph.

As I indicated to counsel in argument, I do not see myself as at liberty to depart from the considerable body of authority in this country which has followed the decision of the New South Wales Court of Appeal in Renard Construction (ME) Pty Ltd v Minister for Public Works (1992) 26 NSWLR 234. I proceed, therefore, on the basis that there is to be implied in a franchise agreement a term of good faith and fair dealing which obliges each party to exercise the powers conferred upon it by the agreement in good faith and reasonably, and not capriciously or for some extraneous purpose. Such a term is a legal incident of such a contract: Hughes Aircraft Systems International v Airservices Australia [1997] FCA 558; (1997) 76 FCR 151 at 191-193, per Finn J; Alcatel Australia Ltd v Scarcella (1998) 44 NSWLR 349 at 368-369, per Sheller JA_; Garry Rogers Motors (Aust) Pty Ltd v Subaru (Aust) Pty Ltd_ [1999] FCA 903; (1999) ATPR 41-703 at [37] per Finkelstein J.

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