= JUDGMENT No. 2367 RS, CATCHWORDS Franchise agreement for distribution of petroleum products - notice of termination by "prescribed corporation" - whether agreement excluded from operation of Petroleum Retail Marketing Franchise Act 1980 by operation of s.6(1D) thereof. Words and Phrases - "a particular corporation". Petroleum Retail Marketing Franchise Act, 1980 (Cth.) Petroleum Retail Marketing Sites Act, 1980 (Cth.) Petroleum Retail Marketing Franchise Amendment Act, 1984 (Cth.), S.6(1D) Petroleum Retail Marketing Sites Amendment Act, 1984(Cth.) CHENOA PTY. LIMITED v. THE SHELL COMPANY OF AUSTRALIA LIMITED VG121 of 1988 VG138 of 1988 Sweeney, Northrop and Wilcox JJ. Melbourne 11 July 1988 IN THE FEDERAL COURT OF AUSTRALIA No. VG 121 of 1988 VG 138 of 1988 VICTORIA DISTRICT REGISTRY we SS GENERAL DIVISION ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: CHENOA PTY. LIMITED Appellant AND : THE SHELL COMPANY OF AUSTRALIA LIMITED Respondent THE COURT: Sweeney, Northrop and Wilcox Jd. PLACE Melbourne DATE 11 July 1988 MINUTES OF ORDER THE COURT ORDERS THAT: 1. The appeal be allowed. 2. The orders made by Ryan J. be set aside and in lieu thereof it be ordered that: (a) It be declared that the provisions of the Petroleum Retail Marketing Franchise Act 1980 apply to the agreement between the parties made on 11 September 1981; (b) The cross-claim be dismissed; and In (c) The respondent pay to the applicant its costs both of the application and of the cross-clain. 3. The respondent pay to the appellant its costs of the appeal. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA No. VG 121 of 1988 VG 138 of 1988 VICTORIA DISTRICT REGISTRY ee GENERAL DIVISION ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: CHENOA PTY. LIMITED Appellant AND : THE SHELL COMPANY OF AUSTRALIA LIMITED Respondent THE COURT: Sweeney, Northrop and Wilcox JJ. PLACE : Melbourne DATE : 11 July 1988 REASONS FOR JUDGMENT The Court: The central question in this appeal is whether the Petroleum Retail Marketing Franchise Act 1980 applies to an agreement made between the respondent, The Shell Company of Australia Limited ("Shell Company"), and the appellant, Chenoa Pty. Limited ("Chenoa"), and relating to a site known as 542 Footscray Road, West Melbourne. It is agreed between the parties that, 1f the Act does apply, two notices of termination of an agreement between Shell Company and Chenoa are invalid. It is further agreed that, if the Act does not apply, subject to a subsidiary argument by Chenoa relating to the form of the notices, Shell Company is entitled to possession of the site. The evidence shows that Shell Company is the lessee of the subject site. In May 1980, pursuant to an oral arrangement made between Shell Company and Chenoa, Chenoa commenced to operate upon the site a centre for the distribution of petrol and diesel fuel. The form of distribution included sale of both products by retail. Some sales were made by Chenoa on behalf of Shell Company; some were made by Chenoa on its own account. The oral arrangement made between the parties in 1980 was reduced to writing. On 11 September 1981 the parties entered into a written agreement relating to the subject site which they called a "Consignment Distributor Agreement". This document was apparently intended to confirm, and perhaps to elaborate, the Previous oral arrangement. The document specified that the term of the agreement was to be a period of five years commencing on ll September 1981, "and thereafter until the expiration of not less than three months written notice of determination given by either party to the other". However, between the dates of the oral and the written agreement, on 19 September 1980, two new statutes had come into operation: the Petroleum Retail Marketing Franchise Act ("the Franchise Act") and the Petroleum Retail Marketing Sites Act 1980 ("the Sites Act"). The common genesis of both Acts was the Royal Commission on Petroleum but the two statutes had disparate purposes. The Franchise Act was intended to give to certain motor fuel retailers - persons who were "franchisees" within the meaning of that Act - greater security of tenure than they would be likely otherwise to enjoy. The Sites Act was conceived as a means of gradually reducing the number of retail fuel sites operated directly by 011 companies. It is common ground between the present parties that the agreement of 11 September 1981 was a "franchise agreement" within the definition of that term contained in s.3 of the Franchise Act, viz: "' franchise agreement' means an agreement containing— (a) provisions, whether express or implied, under or by virtue of which a corporation (in this Act referred to as the 'franchisor' ) authorizes, permits or requires a person, being another party to the agreement (in this Act referred to as the ''franchisee'), to use, in connection with the retail sale of motor fuel by that person at the premises to which the agreement relates, a mark identifying, commonly associated with, or controlled by, that corporation or a related corporation; (b) provisions, whether express or implied, under or by virtue of which a corporation (in this Act referred to as the 'franchisor') grants a right to, or otherwise authorizes or permits, a person, being another party to the agreement (in this Act referred to as the 'franchisee'), to possess, occupy or use the premises to which the agreement relates in connection with the retail sale of motor fuel by that person at those premises; or (c) provisions, whether express or implied, under or by virtue of which- (i) a corporation (1n this Act referred to as the 'franchisor') is entitled or required to supply motor fuel to a person, being another party to the agreement (in this Act referred to as the 'franchisee'), for retail sale by that person at the premises to which the agreement relates; or (ii) a person (in this Act referred to as the 'franchisee') agrees with a corporation (in this Act referred to as_ the 'franchisor') to acquire motor fuel from another person (whether a party to the agreement or not) for retail sale by the first—-mentioned person at the premises to which the agreement relates;". The Franchise Act does not apply to all franchise agreements. Section 6 of the Act, as it originally stood, limited the application of the Act to situations where, by one or more agreements, there were provisions of the kinds referred to in both paras (a) and (b) of the definition and also a limitation of the kind referred to in either sub-para (i) or (i1) of para (c) of that definition: see generally Centenary Investments Pty. Ltd. v. Total Australia Ltd. (1982) ATPR 40-314 at p.43, 872. Once again, it is common ground that the subject agreement complied with the requirements of s.6. It follows that the agreement was, when made, one to which the Franchise Act applied, with all the results that flowed from this circumstance in terms of Chenoa's security of tenure. The Sites Act contained a Schedule in which were listed nine corporations. They included Shell Australia Limited ("Shell Australia"). The Act uses the term "prescribed corporation", which it defines in s.3 as meaning: "(a) a corporation specified in the Schedule; (b) any other corporation that refines petroleum; or (c) a corporation that is an associate of a corporation referred to in paragraph (a) or (b);". The term "associate" is defined in s.5 of the Sites Act to unclude, in the case of a body corporate, "a related body corporate". That term is itself defined in s.4 to include a Situation where one company is the subsidiary of another company. As Shell Company is a wholly owned subsidiary of Shell Australia, it is a related body corporate to Shell Australia and thus an "associate" of the latter company. It follows that Shell Company is itself a "prescribed corporation" within the meaning of the Sites Act, as it originally stood. Section 10 of the Sites Act was a critical provision in the Act, as originally framed. The section commenced by providing that, except as provided therein, "a prescribed corporation shall not operate a retail site". The section went on to permit the operation by "a prescribed corporation specified in the Schedule, or a member of a group of prescribed corporations one of which is specified in the Schedule" of a number of sites up to the number specified in the Schedule against the name of the corporations there listed. The number of sites at the end of the second year after the date of the commencement of the Act was, for some corporations, lower than the number specified as the limit at the end of the first year. The section went on to provide that, in ascertaining the relevant numbers of sites, certain types of site should be disregarded. Section 11 of the Sites Act provided for the submission of returns. In view of the importance of that section to the argument in this case we set out the material provisions: "11. (1) A prescribed corporation specified in the Schedule shall, within 30 days after the commencement of this Act, lodge with an authorized officer- (a) where that corporation, or a member or members of a group of prescribed corporations of which that corporation is a member, operated a retail site or retail sites on the day immediately preceding the commencing day-a statement in accordance with the appropriate form specifying, in respect of the operation on that day of each retail site by that corporation or by a member of that group of corporations (in this paragraph referred to as the ''relevant corporation'), the following matters: (i) the name of the relevant corporation; (ii) particulars of the situation of the site; (iii) whether the relevant corporation owned, or was a lessee or licensee in respect of, that site; (iv) whether motor fuel for road vehicles was sold at that site by or on behalf of the relevant corporation or by a person under an agreement referred to in sub-paragraph 7(1)(b)(ii); (v) whether that site was a diesel fuel site, a training site, a market research site or a site temporarily operated and, in the case of a site temporarily operated, the circumstances by reason of which it was to be taken to be temporarily operated; or (b) where that corporation did not operate, or no member of a group of prescribed corporations of which that corporation is a member operated, a retail site on the day immediately preceding the commencing day-a statement in accordance with the appropriate form stating that fact. (2) Where a prescribed corporation specified in the Schedule, or a member of a group of prescribed corporations one of which 1s specified in the Schedule- (a) operates a retail site on a particular day after the commencement of this Act; and (b) did not operate that site on the immediately preceding day, the corporation so specified shall lodge with an authorized officer, within 30 days after that particular day, a statement in accordance with the appropriate form specifying, in respect of the Operation on that particular day of that retail site by that corporation or by the member of that group of corporations, as the case may be, the matters referred to in sub-paragraphs (1)(a)(i) to (v) (inclusive). Im (3) ... (4) ... (5) A reference in a sub-section of this section to the appropriate form shall be read as a reference to such form as is prescribed for the purposes of that sub-section or, if no form is so prescribed, such form as the Minister approves for the purposes of that sub-section. (6) Where a statement is required by a provision of this section to be lodged within a particular period, the obligation to lodge that statement continues, notwithstanding that that period has expired, until that statement is lodged. (7) A person may- (a) inspect any statement lodged under a provision of this section; or (b) require a copy of, or extract from, any such statement to be given by an authorized officer, on payment for each inspection, or each copy or extract, of such amount (1f any) as is prescribed. (8) A corporation shall not- {a) include in a statement lodged in purported compliance with a provision of this section any information that 1s false in a material particular; or (b) omit from any such statement any information that is required by this section to be included. (9) ... \ (10) wees Section 13 provided for pecuniary penalties in the case of any contravention of s.10 or of the requirements of s.11 relating to the making of complete and accurate returns. In 1984 extensive amendments were made both to the Sites Act and to the Franchise Act. One purpose of the amendments, according to the Minister's Second Reading Speech, was to ensure |©o "that the Sites Act and the Franchise Act should not be capable of applying concurrently at any one site". To that end the section in the Franchise Act dealing with franchise agreements to which the Act was not to apply was expanded so as to insert, amongst other provisions, a new subs.(1D), as follows: "(1D) Where~ (a) premises were, in a statement lodged under section 11 of the Petroleum Retail Marketing Sites Act 1980 at any time before 1 September 1984, specified as being a retail site operated by a particular corporation; and (b) the premises have been operated as a retail site by the corporation or ae related corporation on a day or days occurring during each of the following months, namely, September, October, November and December in the year 1984, then, in relation to any franchise agreement (whether entered into before, on or after 1 January 1985) in relation to which the premises are the marketing premises, this Act does not apply at any time before the end of the first month during which neither the corporation nor a related corporation operates the premises as a retail site.". The critical question in the present case is whether, as Shell Company contends, the requirements of s.6(1D) have been satisfied so that, notwithstanding that the site was one to which the Franchise Act originally applied, upon the commencement of the 1984 amendments, on 1 January 1985, the Franchise Act ceased to apply to that site. Taking the view that this is the position Shell Company gave two notices to Chenoa of termination of the Consignment Distribution Agreement. Chenoa disputed the validity of those notices, contending that the Franchise Act continued to apply to the site notwithstanding the enactment of s.6(1D) of the Franchise Act. When Shell failed to accept that contention, Chenoa commenced the present proceeding by which it seeks to restrain Shell Company from acting on the notices. Shell Company responded by cross-claiming for possession of the site. The matter came before a single Judge of this Court who held that the effect of s.6(1D) was that the Franchise Act no longer applied to the site. His Honour dismissed Chenoa's claim and, on the cross-claim, adjudged Shell Company to be entitled to possession. Chenoa now appeals against those orders. As already indicated, the critical question 1s_ the application to the case of s.6(1D) of the Franchise Act. But before turning to that matter it 1s convenient to note certain submissions made to us in connection with the original Sites Act. As is apparent, the notion of "operation" of a retail site is fundamental to both s.10 and s.11 of the Sites Act. An attempt was made to explain that notion in the original s.7: "7.(1) For the purposes of this Act, a retail site shall be taken to be operated by a prescribed corporation on a particular day if- (a) on that day, the corporation owns, or is a lessee or licensee in respect of, that site; and (b) on that day, motor fuel for road vehicles is, at that site- (i) sold by retail by or on behalf of the corporation; or (ii) sold by retarl by a person under an agreement (not being a franchise agreement) to which the corporation is a party, where, under that agreement or any other agreement to which the corporation is a party, the corporation receives or is entitled to receive any payments in respect of that sale, other than payments in respect of the purchase of that motor fuel by that person from the corporation. (2) Paragraph (1)(b) does not apply in relation to a retail site if, in the ordinary course of business, more than 75% of the motor fuel sold by retail at that site is sold under a franchise agreement.". The drafting of the original s.7 was far from satisfactory, as is indicated by some of the difficulties aired 1n the course of this to appeal. Read literally, s.7(2) made the requirements of s.7(1)(b) not applicable in the case to which 1t referred, that 1s more than 75% of the motor fuel sales at a particular site being made under a franchise agreement. If s.7(1)(b) was thus rendered inapplicable, the only surviving requirement would be that contained in s.7(1)(a), that is that the relevant prescribed corporation be the owner or lessee of the site. This construction would lead to the absurdity that a franchise site upon which all of the fuel was sold by the franchisee under a franchise agreement on his or her own account would be required to be treated as a site operated by the corporation. Such a result could hardly have been intended. Presumably the intention of inserting s.7(2) was to exclude the possibility that s.7(1)(b) could be satisfied where more than 75% of the fuel was sold under a franchise agreement; so that, in such a case and without more ado, such a site was not to be regarded as operated by the corporation. Another problem about s.7(2) was the meaning of the words "under a franchise agreement". If, pursuant to a franchise agreement, a franchisee occupied a site and, also under that agreement, the franchisee made sales on behalf of the prescribed corporation, in one sense all of the fuel sold at that site by the franchisee would be sold "under a franchise agreement". On this interpretation there would be very few (if any) franchised sites which were caught by the definition in s.7. Yet s.7(2) clearly envisaged that there would be such sites. This consideration led the primary judge to construe s.7(2) as requiring a dissection of the sales made by Chenoa so as to determine the proportion of fuel sold by it on behalf of Shell Company, as distinct from on its own account. In the present case the dissection itself created difficulties. The opening words of para (b) of s.7(1) directed attention to a particular day. By s.11(1)(a), that day was the day immediately preceding the commencement of the Act, that is 18 September 1980. It is common ground between the parties that, on that day, some fuel was sold at the site by Chenoa on behalf of Shell Company, so that the requirement of s.7(1)(b) was satisfied. But there was no agreement that, on that day or during any other relevant period, more than 75% of the fuel sold by retail at the site was fuel sold by Chenoa on 1ts own accord. The respondent denies that this was so and it points to evidence that upon three days in September 1980 - 1 September, 15 September and 30 September - the aggregates of sales made on behalf of Shell Company and of Chenoa respectively were such that the Shell Company sales amounted to 29% of the whole. The respondent also points to a shift report for 18 September - one of the three reports which should have been made for that day - in which sales on behalf of Shell Company were shown as constituting more than " 50% of the whole. But this material was fragmentary and inconclusive. For example, on one of the three days for which figures were tendered, 15 September, the Shell Company share of sales was less than 25%; so that, upon that day and assuming that it is proper to consider only one day 1n applying s.7(2), the test stipulated by s.7(2) would have been satisfied. And there remains a question of what period was intended to be encompassed by the expression "1n the ordinary course of business" used in s.7(2). The phrase seems to be appropriate to consideration of a wider time span than one day, but the section gave no hint as to what period should be considered. Arising out of the unsatisfactory nature of the evidence pertaining to sales on 18 September 1980, each party contends that, in the application of s.7 of the original Sites Act to s.6(1D) of the amended Franchise Act, the other bears the onus of proving the sales pattern on 18 September 1980. Those contentions themselves raise a question of some difficulty which, if 1t was necessary to be resolved, the Court would have to consider in the light of such authorities as Vines v. Djordjyevitch (1955) 91 CLR 512 at pp.519-520 and Nominal Defendant v. Dunstan (1963) 109 CLR 143 at pp.150-151. We have noted the problems arising out of s.7 of the Sites Act, as originally framed, but, in the view we take, it is not necessary to resolve those problems. We are of the opinion that the appellant is entitled to succeed upon another ground and, as the original s.7 was replaced in 1984 as part of an extensive revision of the Sites Act in that year, there appears to be little profit in our dealing with these matters; notwithstanding that we have had the benefit of full argument on behalf of both parties in relation thereto. Consideration of the ground upon which we adjudge the appellant to be entitled to succeed must begin with s.11 of the Sites Act. It will be recalled that s.11(1) had the effect of requiring that a prescribed corporation specified in the Schedule submit a statement within 30 days after the commencement of the Act specifying certain particulars in respect of each retail site operated on 18 September 1980 by that corporation or by any member or members of a group of prescribed corporations of which it was a member. In its application to the Shell group of companies, this subsection meant that Shell Australia — the prescribed corporation specified in the Schedule - became obliged to submit a return not later than 19 October 1980 specifying appropriate particulars relating to all sites operated by prescribed corporations within the Shell group. This, of course, included all the sites operated by Shell Company. A return was in fact submitted in purported compliance with s.11. It was submitted out of time, being received by the authorized officer on 22 October 1980, and it was submitted under cover of a letter written by Mr. B.G. Duke on behalf of Shell Company, not on behalf of Shell Australia. These two circumstances are themselves relied upon by the appellant as reasons for denying that there was a compliance with s.6(1D)(a); but we need not pause to consider the submissions made upon those matters. The lodgment of the return followed receipt by Mr. Leslie Proggatt, Chairman and Chief Executive Officer of Shell Australia, of a telex from the Department of Business and Consumer Affairs notifying the form of the statement approved by the Minister: see s.11(5) of the original Sites Act. The letter from Mr. Duke referred to this telex. It commenced: "Pursuant to the provisions of Section 11 of the Petroleum Retail Marketing Sites Act 1980 and in accordance with your telex Customs Misc. 350 of 15th October 1980, we submit herewith statements containing details of retail sites operated by member companies of the Shell group in Australia on the day immediately preceding 19th September 1980. The following explanatory and general comments should be read in conjunction with those statements:-". The letter went on to comment upon the question whether s.7(2) as enacted had achieved the purpose intended by the Government. Mr. Duke said that, although Shell Company believed that, upon the proper interpretation of s.7(2) as enacted, only one site would be covered by the subsection, the company was notifying 135 sites on a "without prejudice" basis and in compliance with what 1t understood to be the spirit of the legislation. The attached list - which did not precisely follow the form approved by the Minister, a circumstance which gives rise to a further submission on behalf of the appellant - included the subject site, identified as "Footscray Transport Terminal, Footscray". The site was shown as "leased". The return submitted by Mr. Duke had a column headed "Name of Corp". This was evidently inserted in an attempt to comply with s.11(1)(a)(i) of the Sites Act, whereby it was required that the return specify "the name of the relevant corporation". However, in the case of the subject site - as in the case of many, but not all, of the other sites in the list - the word inserted under this column was simply "Shell". Nowhere in the return itself was there any identification of the particular Shell corporation to which reference was being made, nor did the letter resolve that matter. All that the letter conveyed, as indicated above, was that the return was intended to cover all retail outlets "operated by member companies of the Shell group in Australia". Consistently with this statement, the Footscray Terminal could have been operated by any member of the Shell group; and there was nothing stated elsewhere in the communication to assist a reader in determining which was the relevant corporation. No particular corporation was identified at all. In our opinion it cannot be said that a return in this form complied with the command of s.11(1)(a)(i) to specify "the name of the relevant corporation". Counsel for the respondent submit that, upon its proper construction, the Sites Act did not require specification of the particular corporation which had operated the site on 18 September 1980. In the face of the language of para (a) - particularly having regard to the use of the term "the relevant corporation" and the careful definition of this term - this is a difficult submission to put. But counsel say that precise particularity was not required for the purposes of the Act. The scheme of the Act, they say, was to effect a gradual reduction in oil company operated sites. This reduction was to be approached on a group basis, it being immaterial to the policy enshrined in the Act which particular company within a group operated a particular site. The purpose of the return, say counsel, was to inform the Government how many sites were operated by the Shell group on 18 September 1980, so as to facilitate enforcement of that policy. Provided that the authorized officer knew the number and location of all Shell group operated sites it was immaterial, say counsel, that he may not have been able to discern from the return the identity of the precise member of the group which had operated a particular site upon the relevant day. Whilst we accept what counsel put regarding the general policy behind the Sites Act, it is not difficult to see why Parliament would have thought it useful to require that the return specify the particular corporation which had operated the site on the relevant day. The exceptions to the general prohibition upon a prescribed corporation operating a retail site, which are set out in s.10, each refer to "a prescribed corporation specified in the Schedule, or a member of a group of prescribed corporations one of which 1s specified in the Schedule". There 1s no difficulty in ascertaining whether a particular corporation is a prescribed corporation which is specified in the Schedule. However, the determination of whether any other particular corporation is, firstly, a "prescribed corporation" and, secondly, a "member of a group of prescribed corporations one of which is specified in the Schedule" may be a complex matter involving investigation of the precise relationships between particular corporations. In some cases at least it might be impossible to check the position without knowledge of the identity of the particular corporation which is claimed to have operated the site on the relevant day. Moreover, it is evident that Parliament did not intend that the information in returns made under s.11 be restricted to the relevant Department. Section 11(7) in effect creates a public register consisting of all returns lodged under s.11. The assumption behind this provision was, presumably, that there may be people, other than government officers, who might have a legitimate interest in obtaining the information conveyed by those returns. Those people might be people concerned with the enforcement of the policy adopted by the Act. There would be an obvious advantage to such people in having information as to the particular company concerned with a particular site. The respondent offers a general answer to all the criticisms made by the appellant of the adequacy of its 1980 return. It is sufficient, say the respondent's counsel, that the document be a statement "lodged under" s.11. If a particular statement was proferred to, and accepted by, the authorized officer in purported compliance with the obligation imposed by the section this, say counsel, is enough. Whatever its defects, the statement was "lodged under" s.11, so that the Court 1s not concerned with the question whether it was in fact accurate or complete. It follows, say counsel, that the defect complained of in regard to the name of the relevant company does not affect the application to the case of s.6(1D). Without finding 1t necessary finally to determine the point, we see considerable force in this submission. However, the problem - for the respondent - goes beyond the question whether its return, as lodged, adequately specified "the name of the relevant corporation". It is a condition precedent to the application of s.6(1D) to a particular franchise agreement that such agreement concerns premises which were, in a statement lodged under s.11 before 1 September 1984, "specified as being a retail site operated by a particular corporation". It 1s difficult to think of words more apt to convey the unsistence of the legislature that the relevant statement shall have precisely identified a single corporation. The Shorter Oxford English Dictionary gives, as one meaning of the word "particular", the words "relating to a single definite thing or person ... as distinguished from others". We think that 1t is in this sense that the word is used in the present context, to refer to a single corporation as distinguished from others. The construction which we favour finds support in the language of para (b) of s.6(1D), which prescribes a test commencing as follows: "(b) the premises have been operated as a retail site by the corporation or a related corporation ...". "The corporation" here obviously relates back to the "particular corporation" in para (a). The test so prescribed may be satisfied if the premises have been operated by the corporation or a related corporation. One cannot determine what is a related corporation without answering the question "related to what corporation". A sensible answer to that question can only be given if one can identify precisely the first corporation. Hence paras (a) and (b) consistently require, as para (a) expressly states, that the premises be specified as being a retail site, operated by "a particular corporation". The same comment applies to the concluding words of s.6(1D), which direct attention to the period after January 1985. Without knowledge of the identity of the corporation concerned, it may prove impossible to know whether there has arisen a situation in which "neither the corporation nor a related corporation operates the premises as a retail site". In our view the wording of s.6(1D) is too intractable to allow acceptance of the proposition that it is enough that. a statement was submitted before 1 September 1984 revealing that "Shell" operated the relevant site. Compliance with para (a) of s.6(1D) in relation to a particular franchise agreement 1s a condition precedent to that sub-section operating to take the particular agreement outside the application of the Francise Act. The consequence of the failure to comply with the condition precedent is that the sub-section has no application to the present case: see Jolly v. Yorketown District Council (1969) 119 CLR 347. \ The point which we have just discussed was referred to briefly before the trial judge but it seems not to have been the subject of any submission. It was not discussed by his Honour in the course of his otherwise extremely comprehensive reasons for judgment. With the benefit of much more elaborate argument upon the point than his Honour had, it seems to us that this point impels the conclusion that the trial judge erred in holding that s.6(1D) had caused the Franchise Act to cease to apply to the subject agreement. That conclusion being clear, and the point going to the heart of the case, it 18 appropriate to dispose of the appeal upon that basis without considering the numerous other points taken on behalf of the appellant. The appeal should be allowed. The orders made by the trial judge should be set aside and, in lieu thereof, it should be declared that the provisions of the Franchise Act apply to the agreement between the parties. The respondent's cross-claim for possession should be dismissed. The respondent must pay Chenoa's, costs, both in this Court and at first instance. I certify that this and the preceding nineteen (19) pages are a true copy of the Reasons for Judgment herein of their Honours Mr. Justice Sweeney, Mr. Justice Northrop and Mr. Justice Wilcox. Dated: 11 July 1988 eesti VG121 of 1988 VG138 of 1988 Counsel for the Appellant: Mr. R.W.R. Parker Q.C. Mr. P.H. Blackburn-Hart Solicitors for the Appellants: Stojanovic and David Counsel for the Respondent: Mr. B.J. Shaw Q.C. Mr. J.E. Middleton Solicitors for the Respondent: Arthur Robinson and Hedderwicks Dates of hearing: 27, 28 and 29 June 1988