IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION en ea CORAM: TOOHEY J. 29 June 1983 U2 oF AVS ly oo - No. WAG 13 of 1983 BETWEEN: JOHN KENT RICHARDS and DIANNA GRACE RICHARDS Applicants and GOLDEN FLEECE PETROLEUM LTD. Respondent and GOLDEN FLEECE PETROLEUM LTD. Cross-Claimant and JOHN KENT RICHARDS and DIANNA GRACE RICHARDS Cross-Respondents REASONS FOR JUDGMENT The respondent seeks from the applicants further discovery of and inspection of documents. The applicants carry on the business of retailing petroleum products and claim to be the holders of a franchise agreement as that term is defined in the Petroleum Retail Marketing and Franchise Act 1980, being the assignees of a lease and reseller supply contract from the respondent. By notices dated 15 March 1983 the respondent terminated those agreements. It did so on the ground that on 2 March 1983 the applicants obtained a delivery of and sold petroleum products other than those supplied or marketed by the respondent; that in consequence they wilfully adulterated motor fuel supplied to them by the respondent; and that in further consequence they sold or permitted to be sold and passed off or permitted to be passed off the motor fuel as fuel supplied by the respondent. These acts, if established, constitute grounds for termination of a franchise agreement by reason of s.16(2) of the Act. The applicants deny these allegations and seek declarations that the respondent's notices are of no effect. Documents discovered by the applicants, include a readings book for the period 27 October 1982 to 3 June 1983 and summary sheets for the period 1 March 1983 to 3 March 1983. In further and better particulars provided by the respondent, it is alleged that prior to 2 March 1983 the applicants engaged in conduct of the kind that led to the giving of notices by the respondent. The applicants have declined to give any discovery of documents relating to that allegation which, it should be noted, is not in specific terms but is pleaded by the respondent with reference to s.16(6) (b) of the Act. Sub-section (6) provides that in any proceedings in which the holder of a franchise applies to the court for an order declaring a notice of termination to have had or to have no effect, +». the court shall not declare the notice referred to in the sub-section 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 circum- stances". In the respondent's submission, information in the readings book and summary sheets, coupled with the applicants' refusal to give discovery of documents relating to the allegation of contravention prior to 2 March 1983, are evidence of incomplete discovery. The respondent argued that any documents indicating that before 2 March 1983 the applicants might have engaged in conduct in contravention of s.16 of the Act were discoverable documents and for two reasons. First, it was said, they related to the issue whether the applicants were guilty of the contraventions which lead to the giving of notices by the respondent. Second, it was argued that s.16(6)(b) casts upon the respondent the onus of satisfying the court that the termination of the agreement is "just and equitable" having regard to all the circumstances and that this embraces prior contraventions of the Act even though those contraventions may not have been known to the respondent. Put another way, the respondent argued that if there was a contravention of the Act on 2 March 1983 and it was an isolated occasion, for which there was perhaps some justification, it might be difficult to persuade the court that termination was just and equitable. On the other hand, if there was a pattern of such conduct by the applicants, the court would more readily conclude that termination was just and equitable. As to the first ground, it is true that a document is relevant and therefore discoverable so long as it relates to a matter in question in the proceedings. And it has been said that documents relate to a matter in question "if they may fairly lead to a train of inquiry which would help to establish the case of the party seeking discovery". Windeyer J. in Temmler v. Knoll Laboratories (Australia) Pty. Ltd. (1969) 43 ALJR 363. Primarily the matter in issue in this application is whether there was a contravention of s.16 of the Act by the applicants on 2 March 1983. The fact that there may have been a contravention prior thereto does not of itself say anything about the probability that there was a contravention on 2 March. Some reference was made during the course of argument to evidence of similar facts but that is a concept peculiarly applicable to the criminal law and not, I think, available in these proceedings. But it is conceivable that a contravention on some occasion earlier than 2 March 1983 might be relevant to the contravention in question as throwing some light on the probability that it occurred. If, for instance, the applicants could be shown to have entered into an arrangement with another oil company for the provision of fuel over a period that included 2 March 1983, that would enhance the probability that there was a contravention on the day in question. No evidence has been offered by the respondent to support such a contention. But I am of the opinion that any document evidencing an earlier contravention is relevant to the question whether in all the circumstances it is just and equitable that the agreements be terminated. Sub-section (7) of s.16 reads : "Without limiting the generality of paragraph (6) (b), the circum- stances 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 circumstances, or the occurrence of the event, constituting the ground referred to in paragraph (6) (a)." Nothing in that sub-section detracts from the generality of sub-s.(6)(b) and in my view, "all the circumstances" include circumstances preceding the contravention in question which throw light upon the standard of the applicants' conduct on matters which, in terms of s.16(2), may lead to the termination of a franchise agreement. The respondent accepted that if discovery should reveal some contravention other than that upon which it relies in the present proceedings, it would not be appropriate for it, either in this application or ina new application, to set up such a contravention as of itself justifying termination of the agreements. In my view the orders sought in the notice of motion are justified and there will be orders accordingly. I certify that this and the five preceding pages are a true copy of the Reasons for Judgment herein of his Honour Mr. Justice Toohey of ver Jeb Associate Dated: 29 June 1983