16Termination of franchise agreements

#### 16 Termination of franchise agreements (1) A franchisor may terminate the franchise agreement in accordance with the succeeding provisions of this section, but not otherwise. (2) A franchisor shall not terminate the franchise agreement except on one or more of the following grounds: (a) the franchisee is unable, by reason of physical or mental incapacity, to control the operation of the marketing premises; (b) the franchisee makes a fraudulent misrepresentation in connection with the operation of the marketing premises; (c) the franchisee performs an act, omits to perform an act, or makes a statement, where the act or omission, or the making of the statement: (i) constitutes an offence punishable by imprisonment or, in the case of a franchisee being a body corporate, by a fine of $500 or more; and (ii) in the case of a franchisee being a natural person, tends to show that he is dishonest or is otherwise not of good character; (d) in connection with the operation of the marketing premises, the franchisee performs an act, omits to perform an act, or makes a statement (other than an act, omission or statement referred to in paragraph (c)), where the act or omission, or the making of the statement, constitutes a serious contravention of a provision of any law; (e) the franchisee misrepresents the octane rating of, or wilfully adulterates, motor fuel supplied to him under the franchise agreement; (f) without the consent of the franchisor, the franchisee wilfully passes off motor fuel supplied to him by a person other than the franchisor or a related corporation as being motor fuel supplied to him by the franchisor or a related corporation; (g) the franchisee fails to operate the marketing premises (otherwise than by reason of an industrial dispute or an interruption, reduction or cessation of the supply of motor fuel or the compliance by the franchisee with an emergency law as defined by subsection 10(7) or with a direction or order made under such a law): (i) for a period exceeding 7 consecutive days; or (ii) for a lesser period or lesser periods, where the failure to operate the premises during that period or those periods is unreasonable, having regard to the interests of the franchisor, the normal operation of the premises and the reason for the failure; (h) the franchisee operates the marketing premises in a manner likely to cause injury to persons or property; (j) the franchisee otherwise commits a breach of a provision of the franchise agreement; (ja) the whole or a substantial part of the marketing premises is, or is to be, acquired by, or by a public authority of, the Commonwealth, a State or the Northern Territory under a law relating to the compulsory acquisition of land; (jb) the sale of motor fuel at the marketing premises is prohibited by or under a law relating to the use of land; (k) the whole or a substantial part of the marketing premises is destroyed, or is damaged to such an extent as to render the operation of the premises impracticable, except where the franchisor or a related corporation is responsible for the destruction or damage. (3) The termination of a franchise agreement by the franchisor shall be effected by the franchisor serving on the franchisee notice in writing: (a) informing the franchisee that the agreement is to be terminated on a specified date, being a date that, subject to subsection (8), is not earlier than 30 days after the day on which the notice is served; and (b) setting out full particulars of the ground or grounds, including a statement of the facts relating to each ground, upon which the termination is based. (4) Where a franchisor serves notice on the franchisee under subsection (3) terminating the agreement, the franchisee may apply to a court for an order declaring the notice to have had, or to have, no effect. (5) Where an application is made under subsection (4), the Court may, by order, either: (a) declare the notice referred to in that subsection to have had, or to have, no effect; or (b) declare that notice to have terminated, or to terminate, the agreement on the date specified in the notice or on such later date as is specified in the order; and may, in either case, make such ancillary or consequential orders as it thinks fit, including orders directing the preparation and execution of documents. (6) In any proceedings under subsection (4), the court shall not declare the notice referred to in that subsection to have terminated, or to terminate, the franchise agreement unless: (a) a ground specified in the notice is established by the franchisor to the satisfaction of the court; and (b) the court is satisfied that the termination of the agreement and any related agreement or agreements is just and equitable, having regard to all the circumstances. (7) Without limiting the generality of paragraph (6)(b), the circumstances referred to in that paragraph include the conduct of the franchisor and the franchisee after the time when the franchisor became aware of the existence of the circumstances, or the occurrence of the event, constituting the ground referred to in paragraph (6)(a). (8) A court may permit a franchisor to serve a notice under subsection (3) specifying a date for the termination of the franchise agreement that is earlier than 30 days after the day on which the notice is served, if the court is satisfied that it is desirable to do so by reason that the continued possession, occupation, use or operation of the marketing premises in question by the franchisee is likely to cause substantial damage to the business, property or reputation of the franchisor. (9) This section does not prohibit a franchisor from terminating the franchise agreement with the consent in writing of the franchisee given at any time after the commencement of the agreement.