GREENWOOD v ALL STATES FOOD SERVICE [1994] NSWCA 115

GREENWOOD v ALL STATES FOOD SERVICE

SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

GLEESON CJ, HANDLEY JA and COLE AJA 29 April 1994, 29 April 1994

[1994] NSWCA 115

Cole AJA On 11 August 1980 the appellant, Roy Stanley Greenwood, as "Agent Distributor", entered into a contract with the respondent, All States Food Service Pty Ltd ("the company") by which the appellant purchased from the respondent a franchise for a term of five years with an option for renewal to deliver fruit and vegetables from Flemington Market to a franchise territory in the Manly Warringah area. In order to perform the contract the appellant attended at the respondent's warehouse at the Flemington Markets between approximately 5 and 6 am each day, parked his truck in his nominated parking spot near the warehouse, collected and wheeled trolleys laden with pre-packed orders to his truck, loaded the truck, and thereafter delivered the goods to various outlets in his territory. He received a payment for his services calculated by reference to percentages of the invoice price of the goods.

On 24 July 1984 the respondent purported to terminate the contract by a letter delivered to the appellant on that day. The letter, in part, read:

"We have reviewed the above contract, and in particular both the express and implied actions required on your part to ensure its satisfactory execution. We consider that your conduct is outside the terms of our agreement in a commercial context, and that specifically:

(iii) you have refused to co-operate with our warehouse goods handling system which is adhered to by 23 other drivers"

The appellant treated that letter as a wrong repudiation of the franchise contract and, on 8 November 1984, sued the respondent for damages. The matter was heard by Smart J four and a half years later in June 1989. His Honour delivered judgment on 27 August 1990. Smart J dismissed the appellant's claim finding that his conduct in not abiding by egress arrangements introduced as part of what his Honour described as the respondent's "warehouse system" breached an implied term of co-operation necessary to permit the working of the respondent's warehouse operations from which the appellant and some 23 other franchisees collected and removed produce for distribution. His Honour found that there was necessarily implied in the franchise agreement a term, variously expressed, that each party should co-operate with the other in relation to the delivery of produce by the respondent to the appellant and the removal by the appellant of such produce from the warehouse.