While Mr Ochs' letter to the Commonwealth Bank (see par.28 hereof) makes clear that the legal terms are maximised with respect to the restaurant and souvenir shop at 5 years, the sentence "If we were to enter into terms (including options) exceeding five years . . ." implies to my mind that the bank was being given an explanation why the terms were so limited. Were it not for the difficulties adverted to in the balance of the letter the thought seems to emerge that the terms otherwise may have been longer.
61 Taking into account that prior to this happening the expenditure by Scanruby on preparations for the site was approaching $700,000, that their costs of operation had been estimated at $1,200,000 and later increased, according to Mr Dimis on Mr Cook's suggestion, who denied it, to $1,874,000 and the fact that the Caltex Credit Analyst assessed a reasonable term for the repayment of necessary borrowings at 7-10 years, it is inconceivable that the express terms of the arrangements as to the commission agencies, namely those set out in Mr Ochs' letter to the Bank, could have been intended by the parties to have been anything more than an initial term or terms. Were it otherwise the only reasonable anticipation would have been that Scanruby would be left at the end of those terms with outstanding debt to the Bank as the direct result of its operation of the site. No right-thinking person could have entertained that possibility. Accordingly, Mr Cook's repeated reliance upon the notion of a standard 1 year term or an increased term from 1 year to 2 years in relation to the commission agencies is quite pointless unless it was intended to merely reflect the legal position but not the actuality.
62 I do not think that at any crucial stage of the negotiations leading to the occupancy were the parties of a common mind on the matter of tenure. This was contributed to by the apparent inability of Caltex to make a decision as to tenure in a timely way. The foisting of the documentation upon Scanruby the evening before the site was to open, with a threat the following morning within two hours of the opening, was astonishing behaviour bearing in mind that by this stage Scanruby had already expended more than $674,000 in preparation for the operation, it had a large body of staff ready to go, and the site was to be launched with a great degree of fanfare, including political and media interest. It is interesting to ponder just what the effect of a refusal to sign by Mr. Dimis might have been in those circumstances; nevertheless, the threat emanated from Caltex and it achieved its obvious intention.
63 It might be said that the bargaining position of the parties was unequal at this time. On the other hand, it must be accepted that the tenure provided in the documents was not different to that which had earlier been conveyed to Mr Dimis by Mr Cook in May 1993 after he spoke to Mr Lockwood about the proposed 1 year commission agency, then increased to 2 years.
64 Further, this did not amount to duress. It was a pressured situation contributed to Caltex's delays, but there was no element of illegitimacy in Caltex requiring execution before the opening. The substance, with hindsight, is that the parties were agreeing to terms of a kind which did not expose Scanruby to losses. At the time a profitable result was the expected one. It involved possibly arduous application by the Scanruby directors and shareholders but with potential and ultimately actual net rewards of considerable size. Thus, any defect or element of unfairness in the late provision of contractual documents, that is, any "procedural unfairness", was not a substantive unfairness, as identified by Mr Ryan. (See West v AGC (Advances) Ltd (1986) 5 NSWLR 610. There was in this context no exploitation or oppression, but a contract or arrangement the benefits of which were fair and substantial. What the applicant seeks, in effect, is a continuation of those benefits for a longer term, viz 10 years rather than 5 years.
65 Similarly, there is no real basis in the evidence for a conclusion that the applicant was in an unequal bargaining position. It, through Mr Dimis, had experience of Caltex operations at Mittagong. It was selected as suitable and able to operate the F3 site; it had legal advice and financial capacity.
66 I have formed the opinion that the expectation of Scanruby was not totally unjustified or a fabrication but that it never crystallised as even an informal offer, let alone an agreement. The tenure to be finally offered was hoped by Scanruby to be, but never actually confirmed as, a nine or ten year term, including option periods. While the circumstances of the provision of the initial agreements and leases left Scanruby in a position where it felt little if any alternative could be taken but to execute them, there remains in the evidence a conundrum I have found extremely difficult to understand, if Scanruby's position was then as it is now claimed. That is that neither then nor at any stage thereafter in all the sequence of events and discussions through 1993 to 1998 that I have summarised, did Mr Dimis, or anybody else on Scanruby's behalf, including Mr Zacharatos, ever mention to a Caltex representative that Caltex had failed to honour a promise that Scanruby would have at least nine or ten years at the F3 site. If the expectation was grounded in some positive statement on behalf of Caltex to that effect, I find it impossible to understand how it could not have been identified repeatedly by Scanruby in the many discussions I have referred to. Equally, how could that understanding of the parties intention not be the subject of a note, letter or minute. Where there is to be found any such reference it is oblique and, taking into account the minutes from which I have extracted parts, suggestive of a desire rather than a perceived right. For example, there seems to me to be a world of difference between the minutes recording Mr Dimis having said "We need long tenure" and an alternative postulation such as "We need the long tenure we were promised at the outset by X on behalf of Caltex".
67 In the context of a multi-million dollar enterprise, as was the F3 site, I consider the absence of these observations, indications or complaints in effect at all times during the subsistence of the parties' relationship to speak powerfully against the proposition that the applicant has been denied something which was intended by Caltex that it have, namely, a total period of occupancy of up to 10 years. In my opinion, where the complaint made by an applicant in proceedings such as this relates to a lucrative business and the respondent has exercised the contractual rights to terminate conferred upon it by the legal instruments utilised by the parties to create their relationship, after having otherwise satisfied those terms, then a clear case ought be demonstrated that the exercise of those rights diverged from the mutual understanding of the parties on the matter of tenure. I am unable to find on the evidence that such a mutuality ever existed in this case.
68 In having come to my conclusions on this matter of the possibility of a ten year term I have found it unnecessary, save in one respect, to make any adverse finding as to the credit of any witness. I have had difficulty understanding how Mr Dimis was able to give evidence very late in the day that Mr Manning, and, only in reply, that Mr Cook had adverted to an intention in Caltex that Scanruby have a ten year period of occupancy, that matter not having arisen either in the course of his earlier two substantial affidavits or in the course of his oral evidence. It seems to me that Mr Dimis' later evidence may have been an attempt by him to recapture what he recalled the position to be but, based as it was on unsupported recollection over a period of years, I consider the evidence unreliable. In any event, in the context of the silence over 5 years when so many obvious opportunities arose to assert the alleged promise, I am not able to accept this evidence as the fact.
69 In considering this matter I have given attention to the majority judgment of the former Industrial Commission of New South Wales in Court Session (Perrignon, Dey JJ in A & M Thompson Pty Ltd v Total Australia Ltd (1980) 2 NSWLR 1 where the features of a licence to occupy and operate a service station were considered in the context of an unfair contract case. Their Honour's judgment provides very useful observations, in context, of the concept of fairness. Here I am unable to find that there was any unfairness involved which could justify a similar approach. I have found the bargaining positions were not unequal, one basis on which unfairness was there found. Similarly are absent the elements of harshness and unconscionability there referred to:
"Having decided that the contract or arrangement was unfair, it is not necessary to pronounce any finding as to whether the contract or arrangement was also 'harsh' or 'unconscionable'. Were it so necessary, we would be disposed towards the conclusion that the contract or arrangement was also 'harsh', in the sense that it imposed on the Thompsons unduly severe disadvantages in regard to time of occupation, and in regard to the removal of any right to share ultimately in the value of the business built up by them, particularly in regard to the value of the workshop business. Looked at in this way, it follows that the 'bargain' accepted by them was less than that which in good conscience should have been offered to them. On that view of the case, the contract or arrangement could also be described as 'unconscionable'."
70 I turn to the argument based upon the Petroleum Retail Marketing Franchise Act 1980. Mr Donovan cited the judgment of the High Court in Caltex Oil (Aust) Pty Ltd v Best (1990) 170 CLR 516, concerning the application of that Act. That case involved an agreement which it was accepted came within the scope of that statute. A clause in the agreement purported to confer upon Caltex rights which it was argued were inconsistent with provisions of the Act. The majority (Mason CJ, Gaudron and McHugh JJ) stated the question in the matter this way:
"The critical question then is whether the Act, on its true construction, manifests a purpose or policy which is at odds with the right which cl.17.4 purports to confer on Caltex." (ibid at p.523)
71 Section 7(1) of the Act prohibited contracting out of the statute. The majority said: