Commonwealth Numbered Acts

PETROLEUM RETAIL MARKETING FRANCHISE AMENDMENT ACT 1984 No. 122, 1984 - SECT 16

16. Section 17 of the Principal Act is repealed and the following sections are
substituted: Renewal of franchise agreement

"17. (1) Subject to this section and sections 17A and 17B, a franchisor shall
not fail or refuse to renew the franchise agreement except on one or more of
the following grounds:

   (a)  the existence of circumstances, or the occurrence of an event, of a
        kind referred to in any of paragraphs 16 (2) (a) to (k) (inclusive);

   (b)  the franchisee rejects a proposal made in accordance with sub-section
        17A (2) in a notice served under sub-section 17A (1);

   (c)  the number of litres of motor fuel supplied under the agreement (in
        this paragraph referred to as the 'relevant agreement') or a related
        agreement by prescribed persons that was sold by retail by or on
        behalf of the franchisee at the marketing premises during any of the 3
        years immediately preceding the date of expiry of the relevant
        agreement was less than 360,000 or such other number as is prescribed;

   (d)  the franchisor proposes, in good faith and in the normal course of
        business-

        (i)    to enter into an agreement, or negotiations for an agreement,
               to grant a lease of the marketing premises to a person other
               than an associate of the franchisor wholly for purposes other
               than the retail sale of motor fuel; or

        (ii)   to enter into an agreement, or negotiations for an agreement,
               (other than an agreement containing a provision having the
               effect of prohibiting the use of the marketing premises for the
               retail sale of motor fuel) to dispose of the whole of its
               interest in the marketing premises to a person other than an
               associate of the franchisor and not to acquire or re-acquire
               any interest in the premises;

   (e)  the franchisor proposes, in good faith and in the normal course of
        business-

        (i)    to occupy and use the marketing premises wholly for purposes
               other than the retail sale of motor fuel; or

        (ii)   to redevelop the marketing premises wholly or principally for
               purposes other than the retail sale of motor fuel, whether the
               premises are to be used for those purposes by the franchisor or
               another person.



"(2) A franchisor shall not enter into an agreement to dispose of its interest
in the marketing premises to a person other than the franchisee or an
associate of the franchisee unless-

   (a)  by notice in writing served on the franchisee at least 30 days before
        entering into the agreement, the franchisor has offered the interest
        to the franchisee or an associate of the franchisee on terms that were
        no less favourable than the terms of the agreement with that person;
        or

   (b)  the agreement was entered into in the following manner, namely, the
        franchisor offered the interest for sale at a public auction of which
        at least 30 day's notice in writing was served on the franchisee, and
        the franchisor-

        (i)    sold the interest at the auction to a person other than an
               associate of the franchisor; or

        (ii)   sold the interest by private treaty, after the auction, to a
               person other than an associate of the franchisor for a price
               not lower than the amount of the highest bid at the auction
               and, subject to sub-section (3), on other terms substantially
               the same as the terms on which the interest was so offered.



"(3) Where, in pursuance of an offer made, or agreement entered into, in
accordance with sub-section (2), a franchisor disposes of its interest in the
marketing premises to the franchisee or an associate of the franchisee (in
this sub-section and in sub-section (4) referred to as the 'relevant person'),
then, if there is included in the terms of the disposition or in any
collateral agreement-

   (a)  a provision having the direct or indirect effect of requiring a
        fixture on the premises to be removed or rendered useless, whether
        before or after the transfer of the premises;

   (b)  a provision having the direct or indirect effect of entitling the
        franchisor to remove or render useless a fixture on the premises; or

   (c)  any other provision that would prevent the relevant person from, or
        impede that person in, carrying on the business of selling motor fuel
        by retail at the premises (whether or not that person actually wishes
        to do so), the provision is void.

"(4) Sub-section (3) does not apply to a provision having the effect that a
fixture on the premises is to be, or may be, removed or rendered useless by
the franchisor with the consent of the relevant person.

"(5) Except where paragraph 17A (4) (b) applies, if, before the date of expiry
of a franchise agreement-

   (a)  the franchisor, in the manner described in paragraph (1) (d), proposed
        to enter into negotiations for an agreement of a kind referred to in
        paragraph (1) (d); and

   (b)  the franchise agreement is not renewed, the term of the agreement
        shall be deemed to be extended until whichever of the following first
        occurs, namely-

   (c)  the lease is granted as described in sub-paragraph (1) (d) (i) or the
        disposition occurs as described in sub-paragraph (1) (d) (ii), as the
        case may be;

   (d)  the expiration of the period of 6 months after the date of expiry of
        the franchise agreement; or

   (e)  a time agreed upon between the franchisor and the franchisee.



"(6) If, at the expiration of the period referred to in paragraph (5) (d), the
lease has not been granted as described in sub-paragraph (1) (d) (i) or the
disposition has not occurred as described in sub-paragraph (1) (d) (ii), as
the case may be-

   (a)  paragraph (1) (d) ceases to be a ground for failure or refusal to
        renew the franchise agreement;

   (b)  unless the franchisee has consented in writing to its non-renewal, the
        franchisor shall renew the franchise agreement; and

   (c)  if the franchise agreement is renewed, the rate of the amounts payable
        by the franchisee under the franchise agreement may, in the agreement
        as renewed, be increased to such extent as is agreed upon between the
        franchisee and the franchisor or, failing agreement, as is determined
        by a court, having regard to the market value of any interest, goods
        or services to which those amounts relate.



"(7) In this section, 'date of expiry', in relation to an agreement, means the
day immediately following the last day on which, or on part of which, the term
of the agreement is current. Procedures relating to renewal and non-renewal

"17A. (1) If a franchisor proposes to renew the franchise agreement, it shall,
not earlier than 120 days, nor later than 60 days, before the date of expiry
of the agreement, serve on the franchisee a notice in writing offering to
renew the agreement.

"(2) A notice under sub-section (1) may include a proposal, made in good faith
and in the normal course of business, by the franchisor that the provisions of
the agreement as proposed to be renewed differ from those of the existing
agreement in the manner specified in the notice.

"(3) For the purposes of this Part, a proposal shall not be taken to be made
in accordance with sub-section (2) if, under the proposal-

   (a)  an amount payable by the franchisee under the franchise agreement as
        proposed to be renewed (other than an amount payable in respect of
        motor fuel or other stock in trade) would be, or would be calculated
        or determined in such a manner as to be, unreasonable, having regard
        to the market value of any interest, goods or services to which the
        amount relates; or

   (b)  the provisions of the agreement as proposed to be renewed (not being
        provisions providing for an amount payable by the franchisee) would be
        unreasonable.

"(4) Where, at the expiration of 45 days after the service of a notice on a
franchisee under sub-section (1), the parties have not agreed to renew the
franchise agreement-

   (a)  if the notice included a proposal (whether made in accordance with
        sub-section (2) or not) that the provisions of the agreement as
        proposed to be renewed differ from those of the existing agreement-the
        franchisee shall be deemed, for the purposes of paragraph 17 (1) (b),
        to have rejected the proposal; and

   (b)  in any other case-the franchisor is not required to renew the
        franchise agreement.



"(5) Except where paragraph (4) (b) applies, a franchisor shall not refuse or
fail to renew the franchise agreement unless it has served on the franchisee,
before the date of expiry of the agreement, notice in writing of its decision
not to renew the agreement, setting out full particulars of the ground or
grounds, including a statement of the facts relating to the ground or each
ground, on which the decision is based.

"(6) If a notice is served on a franchisee under sub-section (5), the term of
the franchise agreement shall (unless the agreement is sooner renewed) be
deemed to be extended for a period of 90 days (or, if proceedings are
instituted under sub-section (7) within that period, such longer period (if
any) as the court determines before the end of the first-mentioned period)
after-

   (a)  if the term of the agreement is extended under sub-section 17 (5)-the
        end of that extension; or

   (b)  in any other case-the date of service of the notice under sub-section
        (5).



"(7) Except where paragraph (4) (b) applies, a court shall, on the application
of a franchisee, make an order directing the franchisor to renew the franchise
agreement unless-

   (a)  the franchisor has served on the franchisee a notice in accordance
        with sub-section (5);

   (b)  a ground specified in the notice is established by the franchisor to
        the satisfaction of the court; and

   (c)  except where a ground so established is a ground referred to in
        paragraph 17 (1) (d), the court is satisfied that it is just and
        equitable, having regard to all the circumstances, for the agreement
        and any related agreement or agreements not to be renewed.



"(8) Without limiting the generality of paragraph (7) (c), 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 a ground
referred to in paragraph (7) (b) (not being a ground referred to in paragraph
17 (1) (d)).

"(9) Where the court makes an order under sub-section (7), it may make-

   (a)  orders determining any amount, or the manner of calculating or
        determining any amount, to be payable by the franchisee under the
        franchise agreement as to be renewed;

   (b)  orders determining any other provisions of the agreement as to be
        renewed; and

   (c)  such ancillary or consequential orders as it thinks fit, including
        orders directing the preparation and execution of documents.



"(10) In this section, 'date of expiry' has the same meaning as in section 
17.  General provisions relating to renewal and non-renewal

"17B. (1) Without limiting the generality of sub-sections 17 (1) and 17A (5),
where-

   (a)  a franchisor offers to renew the franchise agreement;

   (b)  the provisions of the agreement as proposed to be renewed differ from
        those of the earlier agreement; and

   (c)  the differences have not been set out in a proposal made in accordance
        with sub-section 17A (2) in a notice served under sub-section 17A (1),
        the franchisor shall, for the purposes of this Part, but subject to
        sub-sections (2) and (3), be taken to have refused or failed to renew
        the earlier agreement.

"(2) For the purposes of this Part, a franchisor shall not be taken to have
failed or refused to renew a franchise agreement by reason only that, in
relation to the agreement as renewed, there is substituted for that franchisor
a different franchisor, if-

   (a)  that different franchisor is a corporation related to the
        first-mentioned franchisor; and

   (b)  the first-mentioned franchisor has agreed in writing to indemnify the
        franchisee in respect of any loss or damage resulting from any breach
        by that different franchisor of its obligations under this Act or
        under the franchise agreement as renewed.



"(3) For the purposes of this Part, a franchisor is not required, and shall
not be taken to have failed or refused, to renew the franchise agreement if
consent in writing to the non-renewal was given by the franchisee at any time
after the commencement, and before the expiration, of the agreement, being a
time, in the case of an agreement in effect immediately before the date of
commencement of this Act-

   (a)  except where paragraph (b) applies-on or after that date; or

   (b)  where the franchisor has, before that date, in good faith and in the
        normal course of business, entered into an agreement to grant or
        dispose of an interest in, or to grant a licence in relation to, the
        marketing premises-before that date.



"(4) Where-

   (a)  a franchise agreement (in this sub-section referred to as the
        'original agreement') has been entered into otherwise than by way of
        renewal;

   (b)  the provisions of section 17 of this Act as in force before 1 January
        1985, or of sections 17 and 17A of this Act as in force on and after
        that date, or both, have applied in relation to a renewal, or 2 or
        more consecutive renewals, of the original agreement; and

   (c)  the term or terms of the agreement as so renewed, together with the
        term of the original agreement, amount in the aggregate to 9 years or
        more, sections 17 and 17A of this Act as in force on and after that
        date do not apply in relation to the renewal of the agreement when the
        term of the agreement next expires, but, if the franchisor voluntarily
        renews the agreement, those sections and this section (subject to
        section 6) apply again as if the agreement as so voluntarily renewed
        were entered into otherwise than by way of renewal.

"(5) Sections 17 and 17A do not apply in relation to a franchise agreement
whose term is 9 years or more.

"(6) For the purposes of this section, a reference to the term of an agreement
includes a reference to any part of the term that occurred at a time when this
Act did not apply in relation to the agreement, other than a time before 19
September 1980.".