Amoco Australia Pty Ltd v Rocca Bros Motor Engineering Co Pty Ltd [1973] HCA 40

High Court of Australia McTiernan A.C.J. Menzies, Walsh, Gibbs and Stephen JJ. Amoco Australia Pty Ltd v Rocca Bros Motor Engineering Co Pty Ltd [1973] HCA 40

ORDER Appeal dismissed with costs.

Cur. adv. vult.

The following written judgments were delivered:—

1973, Oct. 11 McTiernan A.C.J.

I have had the advantage of reading and considering the reasons which have been prepared by Walsh J. and I agree with them.

I would therefore dismiss the appeal.

Menzies J.

The judgment appealed against is one whereby the Full Court of the Supreme Court of South Australia reversed a decision of Wells J. to the effect that a restraint of trade in favour of the appellant ("Amoco") accepted by the respondent ("Rocca") was reasonable. His Honour granted injunctions enforcing this restraint.

The restraint in question is one of a common kind, i.e., to ensure that the oil products of one company should for a term, be the only products supplied from the service station of another company. Amoco is a supplier of petroleum products; Rocca is the owner of a service station. At the time when the preliminary agreement was made, Amoco — a United States company — was endeavouring to establish itself in Australia and Rocca was in a position to become the owner of a piece of land suitable for a service station at Para Hills, a district outside Adelaide which was then about to be developed as a suburb. The restraint actually in question was effected by means of provisions in an underlease. Rocca, as owner, leased the site to Amoco for a term of fifteen years. Amoco granted Rocca an underlease for the same term less one day. The essence of the restraint was that Rocca would purchase from Amoco at a fixed rebate on current prices its full requirements of petrol and oil for sale at the service station and would not, except in special circumstances, sell at that service station the products of any other oil company. There were other less important stipulations relating, inter alia, to the times and manner of the operation of the service station and the payment of accounts. There was also a limitation in relation to assignment. All these were in favour of Amoco. Amoco, for its part, undertook to pay for certain work at the service station and to lend Rocca plant and equipment for its operation. When the station was ready to be opened in December 1964, Amoco had spent about $7,000 upon it. Later, further money was spent. Although the original agreement had been completed by June 1964, the lease and the underlease were not executed until May 1966. The term of the lease was fifteen years from 30th November 1964. In September 1969, the parties executed extensions of the lease and underlease for an additional five years. The consideration of Rocca agreeing to this extension was that Amoco should pay for certain further improvements to the service station and should increase the amount of the rebate for the extended term. In all, Amoco spent about $19,000 upon Rocca's garage.