ne ae nae ee IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VG No, 136 of 1980 wwe ww GENERAL DIVISION BETWEEN: GEORGE MACGREGOR AUTO SERVICE pTY. LTD. Applicant and CALTEX OIL (AUSTRALIA) PTY. LTD. Respondent NORTHROP J. REASONS FOR JUDGMENT 20 NOVEMBER 1980 George Macgregor Auto Service Pty, Ltd. ("the company") seeks an interlocutory injunction restraining Caltex Oil (Australia) Pty. Ltd. ("Caltex"), its servants and agents: "from treating the lease dated 30 September 1979 between (the company) and (Caltex) as terminated pursuant to sub-clause 2(a) therect, incluaing, without limiting the generality of the foregoing, advertising or offering the demised prenuises for sele." Caltex is the owner of a petrol selling outiet situated at 973 Burke Road, Camberwell, Since 1973 Georze Alexander McGregor and members of his family conductced a Caltex service station business at that site. The company was iuncorperated in 1975 and took over the service station business. Mr. McGrecor 15 a director of the corpary. nn Ty nee td oe te ee rid a lee, epecemee Re Yt ae i a ee re ee Until September 1979, Mr, McGregor, and subsequently the company, occupied the service station site pursuant to a series of licences granted by Caltex, Under those licences Caltex had power to determine the licence at any time without assigning any reason, by thirty days' notice in writing. In September 1973 discussions took place between Mr. McGregor, his daughter Mrs, Waack, a director of the company, and a Mr. John Shergold, a wholesale representative of Caltex service station dealers, including the company. It was his duty to arrange for dealers to enter into leases of the service stations with respect to new dealers and to replace existing licences with leases insofar as they were held by existing dealers. Mr. McGregor had been told of the proposal earlier by another officer of Caltex. At the first meeting, Mr. Shergold left a copy of the proposed lease with Mr. McGregor. It was for a term of three years at a rental higher than the licence fee then being paid by the company. Sub-clause 2{a) of the lease was as follows: "2. (a) The Lessor may terminate this Lease without assigning any cause or reason by giving not less than three (3) months' written notice of termination to the Lessee at any time during the first twelve (12) months of the term of this Lease." Mr. McGregor consulted wath legal advisers of the V.A.C.C., an assoclation concerned to serve the interests of service station operators, concerning Lhe lease, At a subsequent necting with , S J 9 ve Mr. Shergold, Mr. McGregor queried the need for that sub-clause. There is a conflict of evidence concerning what was said by Mr. Shergold, Mr. McGregor requested the deletion of the sub-clause, It is not disputed that Mr. Shergold volunteered the information that the sub-clause was designed to protect Caltex with respect to new dealers. Mr. McGregor says that Mr. Shergold told him that the sub-clause was not to be used against established dealers by the company, but it had to remain in the lease, Mr. Shergold denies saying this, I will not attempt to set out the whole of the evidence on this issue, nor attempt to determine who is telling the truth. There is evidence, however, which if accepted at the trial, will establish the base for the claims made by the company. I do make the comment that the sub-clause is in a form which suggests that it is designed to apply to dealers who have not had previous dealings with Caltex, the power being exercisable during the first year of a lease of longer duration, The lease was duly executed and dated 30 Septemher 1979 and was for a term of three years commencing 1 October 1979. By written notice dated 22 August 1980, Caltex purported to exercise the power conferred by sub-clause 2 (a) by giving notice of termination of the lease to take effect at the expiration of three months after the date of the service of the notice, that 1s to take effect about 23 November 1930, By a letter dated 9 October 1980, Caitex gave uotice to che company that 1t proposed tc sell the service station site by auction on 11 December 1980 and that it proposed to erect .,4-- Se UNE te SRT E RAR re wrerma nn catamneee tee ae NH eee ee Sa ente aie me Ne notices on the site advertising the sale, These notices have been erected, The sale is said to have become neccss:2ry as a result of a restructuring of retail outlets by Caltex following upon an investigation which commenced in January 1980, that is after the lease had been executed. On 5 November 1980 the company made application in the Federal Court seeking injunctions, damages and other relief against Caltex. Caltex 1s a corporation under the Trade Practices Act 1974, as amended, ("the Act"), The claim by the company alleges a number of causes of action, It is claimed that the statements by Mr, Shergold concerning the use to be made of sub-clause 2(a) constitutes conduct which, in the events which have happened, is misleading or deceptive or is likely to mislead or deceive and was conduct engaged in by Caltex in trade or commerce, S.52, s.84 of the Act. Likewise, a claim was made under s.53(g) of the Act, but for the purposes of the interlocutory injunction this claim can be put to one side. It 1s claimed that the company was induced to enter into the lease and to continue carrying on business at the site and to that end to utilise a loan from a bank by reason of that conduct, and the company seeks damages under s.82 of the Act. It secks also to invoke the implied incidental jurisdiction of the court, Adamson v. West Perth Football Club (Inc.) (1979-80) 27 A.L.R. 475, and claims injunctions based upon the doctrine of equitable estoppel and by reason of a collateral agreement, generally see Ajayi v. R. T. Briscoe (Nigeria) Ltd. i1¢64] LW.L.R, 1326, and Brion Investments Pty. Ltd. v. Carr [1979] Q.a, 467. Dafficulries mtr remade ee ee = RN re a an Re cnc Nee eB RANA 1s ma ha eee ere A meinen La tle imam malities samme ne. ee ond >, . the company with respect to the claim based on the alleged collateral agreement, see Hoyts Pty, Ltd, v. Spencer (1919) 27 C.L.R. 133, Claims are made also under s,87 of the Act, the basis being that the company is likely to suffer ioss or damage by conduct of Caltex that was engaged 1n in contravention of s.52 of the Act (being the statements by Mr. Shergold), and orders are sought for a declaration that sub-clause 2(a) of the lease 1S void, s.87(2) of the Act, alternatively an order varying the lease by omitting or restricting the application of that sub-clause, s.87(2)(b) of the Act, I do not find it necessary to give further consideration to the claims made insofar as they are based upon the implied incidental jurisdiction of the Federal Court, The principles to be applied in determining whether to grant an interlocutory injunction are clear and I need to refer to two authorities only. In McDonald's Systems of Australia Pty. Ltd. v. McWalliam's Wines Pty. Ltd. (1979) 2 A.T.P.R. Case No. 40-108 at p.18,104, Franki J., after reciting a number of authorities, said: "Phe proper approach to interlocutory injunctions in general has also been dealt with by the Full Court of this Court in Victorian Egg Marketing Board v. Parkwood Uggs Pty. Lid. (1978) ATPR 40-081; (1978) 20 A.L.R. 129 and by the New South Wales Court of Appeal in Shercliff v. Engadine Acceptance Corporation Pty. Ltd. (1978) 1 N.S.W.L.R. 729, I have to consider first of all whether a prima facie case in the relevant sense has been made cout and then to consider the batance cf convenience. ements Ae ee Ne et ee en emi imaneinee ieee Akemi on Sneed ame Me ate Net wae en "So far as concerns the question of a prima facie case it is clear that I must approach the question upon the basis adopted by the High Court in Beecham Group Ltd. v. Bristol Laboratories Pty. Ltd. (1968) 118 C.L.R. 618, I consider it is, however, clear that the court's function in considering this application is not to conduct a preliminary trial or to forecast the result of the case, nor indeed is it necessary that the applicant should establish that it is more likely than not that 1t would succeed if the evidence remains as it 1S in the application for interim relief, It is sufficient that '1f the evidence remains as it is, there is a probability that at the trial of the action, the Plaintiff will be held entitled to relief'." In Slater Walker Superannuation Pty. Ltd. v. Great Boulder Gold Mines Ltd.[{1979] V.R. 107, Lush J. considered the principles to be applied. At p.110 he said: "The weight to be given to the various considerations shown by the authorities to be relevant will vary from case to case. All the authorities say in one way gr another that the plaintiff must show that he has a chance of success before he will be granted an inter- locutory injunction. The authorities refer to the use of the injunction for the purpose of maintaining the status quo, or establishing or maintaining a state of affairs which 1s on the balance of convenience appropriate to be maintained until the trial. They referto avoiding irreparable harm to the plaintiff. There will be situations in which the plaintiff cannot expect to be granted an injunction unless he can show that he can prove positively the existence of his rights and the infringement of them, There will be cther situations in which, though the plaintiff's prouf of his rights or the infringement of them is not strong, an injunction may be granted because to withhold 21t would do the plaintiff irreparable harm, while to grant it would not greatly injure the defendant. The possible variety of situations is unlimited." That statement has been approved by a Full Court of the Supreme Court of Victoria, the Magna Alloys Case of 30 Novenbe: 1978, unreported. 1 apply those principles to this case. Cn ee ee nee a a TT RN EO In the present case, I am not satisfied, in the requisite sense, that Caltex at the present time is engaging an conduct or is likely to engage in conduct that constitutes or would constitute a contravention of s,52 or s.53(g) of the Act, in any of the ways claimed by counsel for the company. I am satisfied, an the requisite sense, that in September 1979, Caltex, by its servants, made statements to the company concerning sub-clause 2(a) of the lease and that the company entered into that lease in reliance of those statements, J am satisfied, in the requisite sense, that if those statements constituted conduct within the meaning of s.52 of the Act, Caltex engaged in that conduct in trade or commerce. Assuming those statements constituted conduct under s,52 of the Act, that conduct has ceased and is not likely to be repeated, Accordingly, I see no basis for an injunction being granted under s.80(2) of the Act, notwithstanding s.80(4) and s.80(5), Different considerations apply with respect to the claim based on s,87 of the Act. Under those provisions the conduct need not be of a continuing nature. The court is empowered by that section to make orders in the form of giving remedies, In those circumstances, in my opinion, the court has power under s.23 Federal Court of Australia Act 197€, as amended, to grant an inter'ocutory injunction. That section reads: "23. The Court has power, in relation to matters in which it has jurisdiction, to make orders of sucn kinds, including interlocutory orders, and to issue, or direct the issue of, writs of such kinds, as the Court thinks appropriate." : +B. In Thomson Publications (Aust.) Pty. Ltd. v. Trade Practices Commission and Others (1979-80) 27 A.L.R. 551, ana joint judgment Deane and Fishez1, JJ, expressed the view that the specific grant of power under s.80 Trade Practices Act was intended to be exhaustive of the kind of conduct to be enjoined and that accordingly s,23 Federal Court of Australia Act could not be relied upon to support an injunction of that type. Their Honours said at p.570: "Tn our view, the clear inference to be drawn from the provisions of s.80 of the Act 31s that the power of the court to grant final injunctive relief in respect of an actual or threatened breach of the provisions of Pt, 1V of the Act was intended by the Parliament to be restricted to the enjoining of conduct of the kind referred to in s.50(1) of the Act and not to extend to the enjoining of conduct not encompassed by the kinds of conduct specified in that sub-section. This conclusion does not mean that a final injunction under s,80 must refer to kinds of conduct as distinct from specific conduct. What it means 1s that the conduct enjoined, preferably by precise description, must come within oné or more of the kands of conduct which s.80(1) mentions, Nor does this conclusion necessarily apply to the power to grant interim injunctions for which specific provision is made in s.80(2) of the Act and in respect of which particular considerations may apply (see Victorian Egg Marketing Board v. Parkwood Eggs Pty. Ltd. (1978) 20 ALR 129 at 140)." In the present case, and for present purposes, the company is not seeking to restrain Caltex from engaging in conduct in contravention of the Act, s.80(1) of the Act, it is seeking to maintain the status quo, namely the continuation of the lease pending final determination of the action, so that 1£ an order is made under s.87 of the Act, effect may be given a ie a nee ohn nares to that order. In those circumstances, I am of opinion that the court has the necessary power under s,23 Federal Court of Australia Act. My opinion is supported by the views expressed by Toohey J. in St, Justins Properties Pty. Ltd. v. Rule Holdings Pty. Ltd. (1980) A.T.P.R. Case No, 40-146, Counsel for Caltex contended that the statements made by Mr. Shergold concerning sub-clause 2({a) of the lease did not constitute conduct that was misleading or deceptive or likely to mislead or deceive under s,52 of the Act, He said that on their true construction their statements expressed a presently held contention concerning future conduct and that ain order te constitute conduct proscribed by s.52, the company had to show that Caltex, at the time that the statements were made, did not have that intention, or that the statements were made recklessly not caring whether than intention was held or not, and that there was no evidence to suggest either of these, Accordingly, it was contended that since the statement correctly stated the then intention of Caltex, no breach of s,52 had been established, in the requisite sense required on an interlocutory injunction application, Counsel referred to and relied upon the reasons for judgment in Thompson v. Mastertouch T.V, Service Pty. Ltd, (1977) 15 A.L.R. 487, and the English authorities cited therein. All of those cases involved prosecutions alleging that the defendant in each case had made false statements in respect to future events, Counsel contended further that the conduct referred to in s.52 of the Act should not apply to staterents which in reality and upon their proper construction, constituted .-10.. ose = ee - 10 - promises to be performed in the future, He submitted that unless this was so, s.52 could be used for purposes that were beyond the purposes of the Act. These two matters give rise to difficult questions of law. There exists the factual basis on which the questions arise, It is not appropriate that I should express an opinion on those guestions of law in proceedings for an interlocutory injunction, It is sufficient to say that the facts do raise genuine and arguable questions of law. This is a case where, in my opinion, unless the interlocutory injunction 1S granted, the company could suffer irreparable harm, while, if the interlocutory injunction is not granted, Caltex would not be greatly injured. If the injunction is not granted, the company may not be able to gain the benefit from any order that it might be entitled to under s.87 of the Act. If the injunction 1s granted, Caltex will continue to receive the rent to which it 1s entitled under the lease, its restructuring being delayed in a small way only. Accordingly, I propose to grant an interlocutory injunction, but not in the form sought by the company, The company attacks sub-clause 2(a} of the lease only. The validity of the lease itself is not attacked. Caltex, as the lessor, has power to sell the freehold of the service station site, Under Clause 24 of the lease, if Caltex contracts to sell or otherwise disposes of the site, it may terminate the lease by giving not less than thirty days' notice in writing ee net ee eat ee ene ee ee ne ee me enn ee eegel epee i Sm Ree ke coer! & s -ll- of termination to the company, Under Clause 26 of the lease, the company is required to permit Caltex to affix and exhibit the usual "For Sale" signs on the site, On the material put before me, those clauses continue to operate. The auction proposed for 11 December 1980 has been cancelled, but Caltex intends to sell the site early in the year 1981. The hearing of the action should be expedited, The delay in commencing the proceedings does not justify a refusal to grant the interlocutory relief, but the relief should be restricted to restrain action taken by Caltex under sub-clause 2(a) of the lease. Accordingly, the interlocutory injunction should be in the form: "Phat until the hearing and determination of this action or until further order the respondent by itself, its servants and agents, be restrained from treating the lease dated 30 September 1979 between the applicant and the respondent as being terminated pursuant to the notice given by the respondent under sub-ciause 2(a) thereof," I certify that this and the JEN preveding pages are a true copy of the _ Reasons for Judgment herein of the | Honourable Mr. Justice Notre oP \ ' Associate , / Dated: 20 NWENBER 1%) | "a7