JUDGMENT No. .ssesschesocdenen TH ED L URT OF AUSTRALIA ) UEENS cT S ) No. QG 95 of 1994 GENERAL DIVISION ) BETWEEN : AFREDA PTY LTD | Applicant AND H CALT. OIL USTRALIA) PTY L Respondent CORAM: Spender J PLACE: Brisbane RECEIVED DATE: 5 July 1995 . 25 JUL 1995 PoochaL COURT UF AUSTRALIA PRINCIPAL REGISTRY MINUTES OF ORDER THE COUR DERS THAT: (1) In respect of the orders made 16 August 1994, the injunction contained in order number 3 of those orders be discharged at 4 pm on 14 July 1995 and that on and from that date the applicant be released from its undertaking numbered 1 in that order and that the orders numbered 1 and 2 of that order cease to be in force. (2) the Third Further Amended Statement of Claim filed 2 June 1995 is struck out. (3) the applicant pay to the respondent in the principal proceedings the costs of 27 June 1995, and the costs of today. COUR! IREC AT: (1) within 21 days the respondent in the principal proceedings make discovery on oath of all documents relating to the supply including supply price of unleaded petrol and super petrol by or through the respondent, which includes subsidiaries, to Caltex Kippa-Ring between 6 March 1992 and 27 May 1993 and to National Northgate between 8 January 1994 and today's date. Those documents extend to those documents which are in the possession, custody or power of Caltex or which were once but are no longer in Caltex's possession, custody or power. .../2 THE COURT GRANTS: Note (1) (2) liberty to apply on one day's notice. liberty to the applicant to further plead the statement of claim when it is in a position properly to do so. Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. SSH 5 FE. JUDGMENT No. seselee Linu ouoceneceen® IN_THE FEDERAL COURT OF AUSTRALIA ) QUEENSLAND DISTRICT REGISTRY ) No. QG 95 of 1994 GENERAL DIVISION ) 'BETWEEN; AFREDA PTY LTD / Applicant AND 3 CALTEX OJL (AUSTRALIA) PTY LTD Respondent . CORAM: Spender J PLACE: Brisbane DATE: 5 July 1995 R DG There are two notices of motion before the court, each of which has been the subject of submissions and has been adjourned on a number of 'previous occasions. The central motion in terms of its commercial and practical effect is that filed by Caltex Oil (Australia) Pty Ltd ('Caltex') on 20 April 1995 which seeks, inter alia, the discharge of an injunction which I granted on 16 August 1994 being the third order I made on that day. The notice of motion filed 20 April 1995 by Caltex sought extensive relief, namely: "1. the applicant's further amended statement of claim filed on 28 March 1995 be struck out; 2. the injunction granted in this action by the Honourable Justice Spender on 16 August 1994, being order no. 3 made on that date, be discharged; 3. alternatively to paragraphs 1 and 2 above, on or before 5.00pm on 5 May 1995 the applicant file and serve the further and better particulars set out in paragraph 4 hereof, failing which the further amended statement of claim filed on 28 March 1995 be struck out; alternatively to paragraphs 1, 2 and 3 above, on or before 5.00pm on 5 May 1995 the applicant file and serve the following further and better particulars: (a) precise details of the occasions on which the respondent failed to provide price support including: (i) the level of price support requested; (ii) the level of price support required to enable the applicant 'to remain profitable whilst selling petroleum products to its customers at prices which were competitive with those offered by ' the applicant's competitors'; (iii) the prices at which the applicant was required to sell each petroleum product in order to remain 'competitive' with the applicant's competitors; (iv) the identity of the applicant's competitors; and (v) the amount by which the applicant suffered loss by reason of that loss of support; (b) precise details of the occasions on which the respondent discriminated against the applicant as compared with other Caltex franchisees, including: (i) the dates of each such occasion; (ii) the other Caltex franchisees; (iii) the details of the discrimination, including the nature and extent of the preference given by the respondent to the other Caltex franchisee or franchisees; and (c) the particulars requested in paragraphs 2, 3, 4, 5 and 8 of the letter from the respondent's solicitors to the applicant's solicitors dated 29 March 1995; alternatively to paragraphs 1 and 2 above, the applicant comply with order no. 4 made by the Honourable Justice Spender on 10 March 1995 on or before 5.00 pm on' 5 May 1995, failing which the applicant's further amended statement of claim filed on 28 March 1995 be struck out; 6. the applicant pay the respondent's costs of and incidental to both this application and to the hearing on 10 March 1995; and 7. such further or other orders' as this Honourable Court deem meet. " In addition to that notice of motion, by notice of motion filed 24 May 1995, the applicant in the principal proceedings, Afreda Pty Ltd ('Afreda') sought particulars relating to the supply including supply price of unleaded petrol by or through Caltex to any of Afreda's competitors. The period sought in respect of that discovery covered, but was not limited to, supply to Caltex Kippa-Ring between 6 March 1992 and 27 May 1993 and to National Northgate between 8 January 1994 and 22 March 1995, the last date having a reference probably to the date of filing of the. notice of motion. As a reference to the "Third Further Amended Statement of Claim" might indicate, the principal proceedings have had a _ chequered history. I am conscious of the consequences to the applicant, and to Mr and Mrs Munro who are the principal shareholders, of the orders that I propose to make, but after anxious consideration, I will discharge the injunction of 16 August 1994 although there is a question, as to which I wish to hear counsel, as to the date from which that discharge should operate. My present view is that I should fix Friday week as that date. Further, I will strike out the Third Further Amended Statement of Claim filed 2 June 1995, but I will permit the applicant to file a further statement of claim when it is ina position properly to do so. Further, while my attitude to the suitability of doing so has wavered, I will adopt the extraordinary course of ordering, prior to delivery of any further statement of claim, limited discovery by Caltex within a period which I foreshadow as 28 days, of the information sought in respect of Caltex Kippa~Ring and National Northgate only, and during the periods for Caltex Kippa-Ring of 6 March 1992 to 27 May 1993, and in respect of National Northgate, from 8 January 1994 to a date to be specified. I want to state as succinctly as I can my reasons for reaching those conclusions. Afreda operates a Caltex branded service station at Deagon. On 31 August 1992 Afreda and Caltex entered into a dealer agreement pursuant to which Afreda has_ since 1 September 1992 conducted and continues to conduct its business as a franchisee, with Caltex as franchisor, from the premises at 180 Braun Street, Deagon. On 10 June 1994 Caltex served a notice of termination of franchise agreement on Afreda, pursuant to s. 16(3) of the Petroleum Retail Marketing Franchise Act 1980. That notice of termination, the validity of which is disputed by the applicant, is an extensive document of some 25 pages and covering some 14 grounds. The document purports to terminate the franchise agreement, and sought delivery up of the premises on or before Friday, 22 July 1994. I do not set out this very extensive document in these reasons, but the nature of the grounds relied on by Caltex are not irrelevant to the conclusions which I have reached. It is perhaps sufficient to say that from 1 November 1993, Afreda ceased paying anything under the dealer agreement until some orders that I made on 16 August 1994 to which I will refer in some detail. At least until 22 July 1994 then, the applicant Afreda was a franchisee and Caltex was a franchisor under the Petroleum Retail Marketing Franchise Act 1980. Section 16 of that Act is centrally relevant. It provides: " (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 (qd) (e) (f) (g) (h) (j) 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; 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; the franchisee misrepresents the octane rating of, or wilfully adulterates, motor fuel supplied to him under the franchise agreement; 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; 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; the franchisee operates the marketing premises in a manner likely to cause injury to persons or property; the franchise 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 (bd) 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). The curial history of the present proceedings is fairly summarised in a chronology handed up to the court on 27 June 1995 by counsel for Caltex. I incorporate chronology in these reasons; " 07.05.85 Applicant commences to operate. 31.08.92 Dealer agreement entered into. 01.09.92 Applicant commences business. 01.09.93 Applicant in default. 01.11.93 Applicant ceases paying anything under dealer agreement. 11.11.93 Demands on applicant and guarantors, 15.12.93 District Court debt proceedings commenced by Caltex. 10.06.94 Caltex issues notice of termination under PRMF Act specifying termination on 22/7/94. 22.07.94 Applicant issues Federal Court proceedings. that 16.08.94 13.09.94 30.09.94 16.10.94 25.11.94 02.12.94 12.12.94 15.12.94 20.12.94 10.01.95 10.01.95 09.03.95 10.03.95 22.03.95 Spender J orders that Caltex be enjoined from re-taking possession on certain undertakings. Applicant files statement of claim (No. 1) - simply claiming relief under s 16(4) of the Act. Defence and cross-claim filed. Applicant files reply. Spender J makes directions, orders security. Amended statement of claim filed (No. 2). Amended reply filed. Caltex files list of documents. Caltex's solicitors write complaining about lack of particularity and about various matters of pleading. Applicant's solicitors write demanding discovery of: (a) pricing arrangements between Caltex and all other' retail outlets within the relevant market area; (b) documents re non-branded Caltex sites. Caltex's solicitors reply saying our client was to discover documents in relation to the price support system generally and in relation to _ the relevant area for the period from 1/3/92. Caltex files defence and cross-claim to amended statement of claim. Applicant's solicitors say response is evasive. Spender J gives directions, including giving the applicant leave to deliver a further amended statement of claim by 22/3/95. Applicant delivers further amended statement of claim (No. 3) but says replacement schedules will shortly be delivered. 29.03.95 Caltex's solicitors write complaining again about lack of particularity and absence of schedules. 30.03.95 Applicant's solicitors say they are willing to provide particulars and schedules. 19.04.95 Caltex files notice of motion seeking striking out of pleading and discharge of injunction. 27.04.95 Spender J. gives directions, including a direction that the applicant have leave to re-plead or to supply particulars. 11.05.95 Applicant delivers further amended pleading (No. 4). 16.05.95 Applicant's solicitors write re discovery - demanding a response by 19.05.95. 24.05.95 Applicant's solicitors file notice of motion re discovery. 26.05.95 Spender J. strikes out parts of the statement of claim, adjourns both motions, and orders the applicant to pay costs of 27/4/95 and 26/5/95. 02.06.95 Applicant delivers further statement of Claim (No. 5). 06.06.95 Spender J. makes directions permitting the applicant to further amend or file a fresh document no later than 4.00 p.m. on 14/6/95. 14.06.95 No further documents received. " It will be necessary to flesh out some of the matters referred to in that chronology, but as that terse record shows, there has been now five attempts by the applicant to plead its case. The orders that I made on 16 August 1994 were as follows - "UPON THE FOLLOWING UNDERTAKINGS BEING PROVIDED: (1) The applicant undertaking to fulfil all of its future obligations to the respondent under the Dealer Agreement dated 31 August 1992. (2) The applicant undertaking to pay to any party adversely affected by the inter- locutory injunction or undertaking such compensation (if any) as the Court thinks just, in such manner as the Court directs. (3) Mr Daran Munro undertaking to pay to any party adversely affected by the interlocutory injunction or undertaking such compensation (if any) as the Court thinks just, in such manner as the Court directs. THE COURT ORDERS THAT: 1. By 4.00pm on the first working day of each month the applicant pay the sum of $1,000.00 to the respondent at the office of its solicitors, Corrs Chambers Westgarth of Level 21, Comalco Place, 12 Creek Street, Brisbane in the State of Queensland in diminution of the sum owing by the applicant to the respondent. 2. By 4.00pm on the first working day of each month the applicant pay a sum by way of interest calculated at 9% per annum on the sum of $100,000.00 to the solicitors of the respondent, Corrs Chambers Westgarth of Level 21, Comalco Place, 12 Creek Street, Brisbane in the State of Queensland, such sum to be held by the respondent's solicitors pending the determination of the principal proceedings. 3. On the undertakings offered, pending the hearing and determination of this proceeding, the respondent whether by itself, its servants or agents or howsoever be restrained from taking any steps to take possession of the premises from which the applicant conducts its business at 180 Braun Street, Deagon in the State of Queensland. 4. The costs of this application be reserved. " In addition to those orders, I gave directions including a direction seeking the Registrar to set the matter down for hearing. On 25 November 1994 I made further directions, the effect of which if complied with, would be that the trial of the principal proceedings would be listed for the call-over of matters early in December 1994. I am conscious of the fact that there were attempts in December 1994 to mediate a settlement in the matter which were unsuccessful. On 10 March 1995 I said to Mr Hoskin, the solicitor appearing for Afreda: " Well, do I gather from that that you do not know what your case is at the moment and you just hope that if you can get this material you might have a case where other people in the area got discounts that you did not get? " Mr Hoskin said: " We say that we know that, and that was the case. " I said: " Well, have you identified the non-branded outlets that you say received this price support? " And he said: "I have not got instructions from our principals in Victoria in relation to that, but mention was made of two sites. Unfortunately, I have--~- " And I interrupted him: "I am not concerned about what is mentioned between principals in Victoria. In the pleadings is there any suggestion that Caltex supplied discounts or price supports to outlets in the market area, whatever that market area is, namely, Kippa-Ring and nominated non-branded outlets which they failed to provide to you at Deagon? "" Mr Hoskin said: "No, your Honour. I do not understand. My under- standing is that that is not in the pleading. " Continuing: "But that is what you want to complain about, is it? " And Mr Hoskin said: " It is, your Honour. " He also, on page 5 of the transcript of the proceedings on 10 March this year, acknowledged that the amended statement of claim, as at that date, did not include particulars of the allegations of loss. In respect of that matter Mr Hoskin said: "I see no problem with that. " Two days before that exchange the solicitors for Caltex had written to the principals' solicitors, McPherson and Kelly in Dandenong, saying in part: "Our client has advised us that Afreda Pty Ltd has failed to pay the quarterly franchise fee for the quarter ending 31 December 1994. For your information enclosed is a copy of a letter which our client sent to Afreda Pty Ltd on 16 January 1995. We request that your clients please make a payment of $1,182.00 to our client immediately. This should be attended to prior to Friday's directions hearing. " Ultimately a Third Further Amended Statement of Claim was filed on 2 June 1995. It is necessary to set out some part of that pleading in some detail. " eee 5. The Applicant by this proceeding is making application to the Court pursuant to sub- section 16(4) of the PRMFA for an Order declaring the Notice to have had, or to have, no effect. 7. It is an implied term of the Franchise Agreement that the Franchisor will not engage in conduct likely to damage the ability of the franchise to operate the franchise profitability. &. fhe applicant says further' that the Franchise Agreement and an earlier similar form of the Franchise Agreements which previously had affect [sic] between the parties were each intended to operate in conjunction with a price support system provided by the Respondent. Such system being either: (a) That laid out in a document entitled 'Agreement by Dealer Calprice: Caltex Price Assistance System' dated 23 March, 1987; or (b) That which is described as 'Market Area Pricing' ('MAP') as introduced from 1 April, 1989, whichever being applicable being hereafter referred to as 'Price Support Agreement'. 9. In relation to the MAP system: (a) It was term of the price support that Support would be granted to enable the Applicant to sell at a profit; (b) It was warranted and represented that MAP system places the applicant competitively in the market place; (c) It was warranted and represented that MAP price is the same for every dealer within the area; (d) It was warranted and represented hat (sic] no selective or preferential support would be offered to individual dealers. 10. 11. 12. Such representations as they they appear in writing are contained and/or evidenced in the paperwriting entitled 'The Caltex pricing system', In breach of the MAP price support system and/or a breach of the implied term of the Franchise Agreement as referred to in paragraph 6 above during a period of the 8th January, 1994 to the present, the Respondent by itself and/or its wholly owned subsidiary has supplied' the 'National site' in Northgate a competitor within the Applicants [sic] Market Price Area unleaded petrol at a price cheaper than that at which the Respondent sold petrol to the Applicant. PARTICULARS On the 28th of June, 1994 at 2.40pm a Caltex Tanker number fTK161 and registered 607-BGG delivered a load of fuel to the national site at Northgate. Throughout that and the following day the national site sold unleaded petrol to its customers at 59.9 cents per litre. The Applicant purchased from the Respondent on the 28th of June, 1994 a load of fuel and was charged 60.8 cents per litre. The Respondent in selling or allowing such sales to the Northgate site has directly assisted the Applicant's competition to the detriment of the Applicant its franchisee and/or causing the Applicant to suffer loss and damage. FURTHER During the period 24th March 1992 to the 27th May 1992 the Respondent gave the Caltex at kippa~ring, a competitor in the Applicant's MAP area a special deal between whereby the Caltex at Kippa-ring was guaranteed a margin of 2.8 cents per litre calculated on the retail price of petrol sold by Caltex Kippa-ring. PARTICULARS The Applicant relies on the information provided in Schedule 'C' attached hereto. 13. As a result the Applicant suffered loss and damage due to the fact the purchase price of petrol obtained by the Applicant from the Respondent was greater than the purchase price of petrol supplied to the Caltex at Kippa-ring. " There are two matters arising out of paragraph 8&8 of that version of the applicant's statement of claim which should be referred to, although, of course, no final determination of any question is appropriate prior to any final hearing. The first is the reference to the 'Caltex Price Assistance System'. That document, which is dated 23 March 1987, on its face, purports to provide a discretionary ex gratia scheme for making price concessions by Caltex in response to requests by a dealer. Its basis for relief is something which I have, at the moment, difficulty in appreciating. The second matter referred to in paragraph 8 refers to an extract of a document which is exhibit DM3 to the affidavit of Mr Munro filed 22 July 1994. The left hand column of that single page document has the rubric 'The Caltex Pricing System' and in the first three paragraph describes that system, which it says is a central and completely transparent pricing policy. The third paragraph concludes with the statement: "The Caltex pricing manager then assesses the situation and each day posts a wholesale price for each MAP area, which is designed to position Caltex competitively in that area. The MAP price is the same for every dealer in that area. No selective, behind-the-scenes support is offered to individual dealers. The prices are posted on the electronic system so they are completely transparent. "" The matter that may be mentioned in respect of this is the question of who is a dealer to which that system relates. The application of that system, and in particular, whether it applies to retailers who are not franchisees of Caltex, is a matter that seems to me to be at least seriously arguable. It is the question of differential pricing which seems to be, as best I can presently understand it, at the core of the allegations by Afreda. The contention by the applicant concerning the discharge of the injunction and the striking out of the statement of claim, but more particularly the former, is that there has not been shown sufficient change to warrant the discharge of the injunction. I think it is fair to say that it is accepted that the statement of claim of 2 June 1995 is inadequate but it was submitted that professional financial advice was required before that could be satisfactorily particularised, and that the applicant, Afreda, should be permitted further opportunity to permit that to happen. I was informed that while it was said that professional advice was necessary before a particularised statement of claim might be able to be presented, no such attempts to secure that assistance had been effected as yet. Moreover, it was made plain on 6 June 1995 that a further and final, if I can use that term without being sarcastic, opportunity was being provided to permit rectifi- cation of the statement of clain. No such amendments of any kind were made to the third further amended statement of claim of 2 June prior to the listing of the motions and the hearing of submissions concerning them on 27 June 1995. If the circumstances are such that it is the appropriate course to follow, an interlocutory injunction may be dissolved or varied at any time. A court will not dissolve or vary an interlocutory injunction unless it is satisfied that there are altered circumstances or the evidence is such as make the continuance of the interlocutory injunction inappropriate. One feature touching that question is where there has not been a sufficient prosecution of the principal proceedings with due diligence. In this particular case, notwithstanding what appears to be the numerous and weighty grounds in the notice of termination delivered by Caltex, I enjoined Caltex from re-entering possession of the site at Deagon on 16 August 1994, Directions were then, subsequently, made which had the effect, if complied with, that the principal proceedings could have been heard expeditiously and determined. The present position, now nearly 11 months later, and after a whole series of attempts to plead a proper statement of claim, is that the principal proceedings are not much further advanced. The first substantive amendment to the statement of claim was on 2 December 1994. It was further amended on 28 March 1995, 11 May 1995 and 2 June 1995. Even the most recent statement of claim, which was not amended pursuant to the invitation given on 6 June 1995, suffers from deficiencies which was candidly recognised by counsel for Afreda. It is highly relevant that as of today no particulars of loss of damage are given, and moreover there is the concession that that cannot be done until the professional assistance is engaged, and that is a step which has not yet been undertaken. Another important factor in my decision to discharge the injunction is that Caltex was enjoined by me on Afreda giving certain undertakings to the court, and abiding certain orders that I made. At the time when I granted the relief to Afreda against the re-entry of possession, I made it plain that the undertakings and orders required punctilious compliance. There has, however, been breaches of those undertakings and orders. There has been, I am satisfied, a failure to pay the quarterly franchise fee of $1182 to which I have referred and there has been a failure to pay for fuel deliveries by cash or bank cheque. So much is admitted by Mr Munro in his most recent affidavit. There has been a dishonour of a cheque in respect of a fuel delivery on 8 June 1995; there has been a failure to accept full bulk tanker loads, and of the nine payments due to be paid to the respondent's solicitors on the first of each month pursuant to the order that I made on 16 August, at least seven of those were paid late. I am conscious that in many respects the breaches have been of only a few days, and that even in respect of the dishonoured cheque that matter has been rectified subsequently. And I am satisfied also that, on some earlier and other occasions, and with other franchisees, less than full bulk tanker loads have been accepted. Nonetheless, there are repeated instances of breaches of the undertakings which the court accepted as the price for enjoining Caltex from entering into possession. A further factor which concerns me is that the dealer agreement, without renewal, expires on 31 August 1995. It is highly unlikely that Caltex would consent to any extension or renewal of that agreement. Section 17 of the t u tai rketi is gives the franchisee some security of tenure. It specifies, as I have indicated, breaches of the franchise agreement as a matter relevant to the ground on which a franchisor can fail or refuse to renew. There is an admitted passing off of non Caltex fuel on 7 May 1994. Other acts of passing off are alleged but not admitted. Moreover, it appears clear that from paragraphs 28 to 44 of the defence and cross-claim of Caltex, and paragraph 18 of the amended reply and defence to the cross-claim which was filed on 2 December 1994, that a number of amounts required to be paid under the franchise agreement have not been paid. Those admitted failures relate to rental, improvement rent, base franchise fee, a quarterly franchise fee, and some petrol products. There are, then, admitted breaches of the franchise agreement which permit the franchisor to fail or refuse to renew the franchise agreement. I recognise, of course, that the court's intervention may nonetheless be sought, but having regard to the nature and extent of the admitted breaches of the franchise agreement, it seems to me that those historical and undisputed facts are highly relevant in whether I should discharge the injunction. The next matter in relation to the discharge of the injunction concerns my inability to understand what precisely Afreda is claiming as a result of Caltex's conduct. Their claim seems to be, in the pleadings thus far, that since 6 March 1992 Caltex has failed to provide sufficient price support as would enable the applicant to remain profitable and that as a result Afreda has suffered loss or damage. That claim is that Afreda is operating and continues to operate an unprofitable business. As to the complaint in the pleading of a failure to provide such price support as would enable the applicant to remain profitable, there is, it seems to me, an important difference between trading profitably and not trading as profitably as one would like, or as one would lawfully be entitled to expect. The complaint of Afreda has been the former, although it was somewhat muddied by statements from the bar table on the last occasion, the 27 June 1995, by counsel for Afreda. This aspect highlights the very real embarrassment caused by the deficiencies in the applicant's pleading, particularly the continuing failure to plead loss or damage as the Federal Court rules require. There is another small matter that has a relevance to that aspect and that is the fact that there was, it appears, a judgment obtained for approximately $9000.00 by the Commissioner of Taxation against the applicant in the Magistrates Court in May of this year. Mr Munro, in his affidavit filed in court on 27 June 1995, speaks of the circumstances in relation to which the cheque later dishonoured was presented, and in relation to personal cheques which were provided contrary to the orders that I made. It is true that those cheques were honoured on presentation, and that, as a consequence, Caltex received full payment in respect of the subject matter of each cheque, but that was not the terms on which Caltex was enjoined. In respect of the partial tanker loads he says that: ",..I have previously been supplied by the Respondent with partial tanker loads of fuel, as have other Franchisees of the Respondent, and this has not caused the Respondent any problem. " In relation to the judgment obtained by the Commissioner of Taxation he says that he was not aware of this judgment until 26 June 1995. He says that the first formal communication he recalled receiving in respect of that claim was a statutory demand dated 1 June 1995, as a consequence of which he contacted the Taxation Department and made an appointment to see an officer in respect of the demand. If it be the case that Afreda is not trading profitably then it is obviously in everybody's interests that the matter be brought to an end and that Afreda be permitted to pursue its claim for damages which, in the circumstances, would seem to be clearly an adequate remedy. If on the other hand the position is different to what has been thus far asserted, namely that there has been a failure to provide such price support as would enable Afreda to remain profitable, and that some other assertion is made concerning the nature of the trade that has not yet been pleaded, then it seems to me to be now, some 10 months or more after I made the orders, quite wrong and unfair to permit the continuance of the injunction in the absence of any such pleading. I have had regard very much to the question of the balance of convenience, but I have had regard also to the factors to which I have referred, and in all the circumstances, as a matter of fairness and equity, it seems to me that I should discharge the injunction which I made on 16 August last year. I will hear counsel as to the date from which that discharge should operate. I am minded to make it 4 pm on Friday week. As to the striking out of the statement of claim, I have already touched on the questions which were canvassed in more detail in the submissions by counsel for Caltex on 27 June 1995. It is admitted that there is a series of deficiencies in the present statement of claim, and in all the circumstances it seems to me that I should strike out the statement of claim and permit Afreda to re-plead a case when it is ina position properly to do so. As to the notice of motion by Afreda, while it is unusual to make an order, I am minded in the present circumstances - notwithstanding that my opinion has fluctuated on this aspect of the matter - to make an order requiring Caltex, prior to the issue of any statement of claim by Afreda, to make discovery on oath of all documents that they have or once had in their custody, possession, or power, relating to the supply, including to the supply price of unleaded petrol by or through Caltex, to either Caltex Kippa- Ring, between 6 March 1992 and 27 May 1993, and National Northgate, between 8 January 1994 and today's date. At the moment the notice of motion seeks information only in respect of unleaded petrol, but I expect that that ought to include unleaded petrol and super petrol. For these reasons, I propose to make the orders I have indicated. {After discussion with Counsel] (1) In respect of the orders made 16 August 1994, I order that the injunction contained in order number 3 of those orders be discharged at 4 pm on 14 July and that on and from that date the applicant be released from its undertaking numbered 1 in that order and that the orders numbered i and 2 of that order cease to be in force. (2) I direct that within 21 days the respondent in the principal proceedings make discovery on oath of all documents relating to the supply, including supply price, of unleaded petrol and super petrol by or through the respondent, which includes subsidiaries, to Caltex Kippa-Ring between 6 March 1992 and 27 May 1993 and to National Northgate between 8 January 1994 and today's date. Those documents extend to those documents which are in the possession, custody or power of Caltex or which were once but are no longer in Caltex's possession, custody or power. (3) The court orders that the applicant pay to the respondent in the principal proceedings the costs of 27 June 1995, and the costs of today. I grant liberty to apply on one day's notice. The third further amended statement of claim filed 2 June 1995 is struck out. I grant liberty to the applicant to further plead the statement of claim when it is in a position properly to do 50. I certify that this and_ the preceding pages are a true copy of the reasons for judgment herein of the Honourable Justice J.E.J. Spender. ey, . : Associate Date: 5 July 1995 Counsel for the applicant: Mr J. D. W. Linklater instructed by: Atherton & Company Counsel for the respondent: Mr P. A. Freeburn instructed by: Corrs Chambers Westgarth Date of Hearing: 27 June 1995