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Wednesday, 27 March 1985
Page: 928

(Question No. 14)


Senator Puplick asked the Minister for Industry, Technology and Commerce, upon notice, on 22 February 1985:

Has the Department of Industry, Technology and Commerce published any guidelines to define the precise meaning of the words 'wholly or principally' as used in section 17 (1) (e) (ii) of the Petroleum Retail Marketing Franchise Act; if so, what are those guidelines; if not, what interpretation are they being given by the Department?


Senator Button —The answer to the honourable senator's question is as follows:

My Department has not published any guidelines to define the precise meaning of the words 'wholly or principally' as used in sub-section 17 (1) (e) (ii) of the Petroleum Retail Marketing Franchise Act.

In the event of any dispute under the Act, including in relation to the sub-section in question, the Act is available for private litigation by the parties concerned. It would therefore be a matter for the court as to what interpretation it might wish to give to the words 'wholly or principally' in sub-section 17 (1) (e) (ii) depending on the circumstances of each particular case subject to litigation at the time.

Sub-section 17 (1) (e) (ii) provides a ground for non-renewal of a franchise agreement for the retailing of motor fuel if the franchisor proposes, in good faith and in the normal course of business, to redevelop the marketing premises wholly or principally for purposes other than the retail sale of motor fuel.

If the ground for non-renewal of the franchise agreement is because the premises are to be used 'principally' for purposes other than the retail sale of motor fuel, that is, a continuing function of the redeveloped premises is to include the retail sale of motor fuel in some capacity under a prescribed agreement, then the new sub-section 19 (1A) provides certain protection for the former franchisee dealer.

In this case, following the rebuilding, restoration or redevelopment of the site (as the case might be) the former franchisee dealer is to be offered an opportunity to remain at the premises under a new agreement, on terms no less favourable than those which might be offered to other persons. The prescribed agreement offered is to be either a franchise agreement or an agency agreement.

Redevelopment is not available as a ground for non-renewal of a franchise agreement where the converse situation applies, that is, where the entire or principal use of the redeveloped premises is to be the retail sale of motor fuel.