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Federal Court of Australia |
COURT
IN THE FEDERAL COURT OF AUSTRALIACATCHWORDS
Petroleum Marketing - termination of leases and supply agreements in respect of two service stations - allegations that lessees of service stations engaged in receiving stolen distillate - circumstantial evidence - analysis of complex facts.Petroleum Retail Marketing Franchise Act 1980, ss. 3, 7, 16 and 17.
HEARING
SYDNEYCounsel for the Applicants
W.A. Wehbe Pty Limited and Mr. W.A. Wehbe: Mr. R.G. Craigie and Mr. D.L. Warren
Solicitors for those Applicants: Messrs. Karavias, Katralis and Co.
Counsel for the Applicant, Mr. G. Hatti: Mr. R.K. Eassie
Solicitors for Mr. G. Hatti: Messrs. Treanor & Bartels, West Ryde
Counsel for the Respondent
Caltex Oil (Australia) Pty Limited: Mr. D.E. Horton, Q.C. with Mr. C.A. Sweeney and Mr. P. Neil
Solicitors for Caltex Oil (Australia) Pty Limited: Messrs. Moore & Bevins
ORDER
For Orders see attached copies of Short Minutes of Order.NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
DECISION
Each of these applications is an application made pursuant to sub-sec. 16(4) of the Petroleum Retail Marketing Franchise Act 1980 ("the Act"). Each application seeks an order declaring that a notice served by the respondent, Caltex Oil (Australia) Pty Limited ("Caltex"), pursuant to sub-sec. 16(3) of the Act had no effect. If the notices did have effect, the applicants' rights to continue in occupation of two service stations will be placed in jeopardy. In cross-claims brought in matters No. G357 and G358 of 1986 Caltex has sought orders which, if made, would give it possession of the two service stations. The essential allegations in the notices are that the applicant in application No. G358 of 1986, Mr. W.A. Wehbe, both personally and in his capacity as a director of the applicant in application No. G357 of 1986, W.A. Wehbe Pty Limited, on a number of occasions, knowingly participated in the receipt of stolen distillate. Mr. Wehbe and the company deny these allegations. The principal issue in the applications is whether the allegations made by Caltex have been established.2. Application No. G357 of 1986 concerns a service station conducted by the applicant in that matter, W.A. Wehbe Pty Limited (hereinafter referred to as "the company"), at premises, 77 Hume Highway, Chullora, a Sydney suburb. The other applications each concern a service station situated at premises 563-567 Hume Highway, South Strathfield South, another Sydney suburb. The applicant in application No. G358 of 1986, Mr. W.A. Wehbe, is the lessee named in the lease of the service station. The applicant in matter number G422 of 1986, Mr. G. Hatti, claims also to have an interest in that service station and in the lease thereof. Upon his own motion he was joined as a party in matter No. G358 of 1986 and has brought a claim in that matter for relief of a similar nature to that sought in his application, No. G422 of 1986.
3. The three applications were heard together. The evidence in each one was, subject to questions of relevance, ordered to be evidence in each of the others. Additionally, use was made of a number of affidavits filed in another application (No. G258 of 1986) brought against Caltex by another company which bears the name "Wehbe" namely, M. & G. Wehbe Brothers Pty Limited. The deponents of these affidavits were not required to reswear their affidavits in the present applications. Application No. G258 of 1986 was settled during the hearing of it earlier this year.
4. In order to understand the issues between the parties, it is first
necessary to make reference to the relevant provisions of the
Act. It
operates upon "franchise agreements" made between oil companies and lessees of
service stations. The term "franchise agreement"
is defined in s. 3 of the
Act to mean an agreement containing:-
(a) provisions, whether express or implied, under or byIn the Act the corporation is referred to as the "franchisor"; persons with whom agreements are made by franchisors are known as "franchisees".
virtue of which a corporation authorises, permits or
requires a person, being another party to the agreement,
to use, in connection with the retail sale of motor fuel
by that person at the premises to which the agreement
relates, a mark identifying the corporation;
(b) provisions, whether express or implied, under or by
virtue of which a corporation grants a right to, or
otherwise authorises or permits, a person, being another
party to the agreement, to possess, occupy or use the
premises to which the agreement relates in connection
with the retail sale of motor fuel;
(c) provisions, whether express or implied, under or by
virtue of which -
(i) a corporation is accustomed, entitled or required
to supply motor fuel to a person, being another
party to the agreement, for retail sale by that
person at the premises to which the agreement
relates; or
(ii) a person agrees with a corporation to acquire
motor fuel from another person (whether a party to
the agreement or not) for retail sale at the
premises to which the agreement relates.
5. The definition of "franchise agreement" needs to be read in conjunction with the definition of "agreement" which is defined in s. 3 of the Act to mean, inter alia, any agreement, arrangement or understanding, whether formal or informal or partly formal and partly informal, whether or not having legal or equitable force, and whether or not based on legal or equitable rights.
6. Section 7 of the Act provides that it applies, notwithstanding any
agreement to the contrary and, in particular, but without limiting the
generality of
the foregoing, a provision in any agreement is void to the
extent that it purports to exclude, limit or modify, or is otherwise
inconsistent
with, the operation of a provision of the Act or any right or
remedy based on or arising out of a provision of the Act. The directly
relevant section of the Act in these applications is s. 16 which deals with
the termination of franchise agreements. It provides that a franchisor may
terminate a franchise agreement in accordance
with the succeeding provisions
of the section, "but not otherwise". By sub-section (2) a franchisor shall
not terminate the franchise
agreement except on one or more of a number of
specified grounds. The grounds relied upon in the present case are those
provided
for in para. (2)(c) of the section which is as follows:-
"(c) the franchisee performs an act, omits7. Sub-section 16(3) of the Act provides that the termination of a franchise agreement by the franchisor shall be effected by the franchisor serving on the franchisee notice in writing informing the franchisee that the agreement is to be terminated on a specified date not earlier than 30 days after the day on which the notice is served, and 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. Sub-section 16(4), pursuant to which each of the applications is brought, provides that, where a franchisor serves notice on the franchisee under sub-sec. (3) terminating the agreement, the franchisee may apply to this Court for an order declaring the notice to have had, or to have, no effect.
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 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;
.........................................."
8. Sub-sections 16(5), (6) and (7) provide for the nature of the orders which
the Court may make. These sub-sections are as follows:-
"(5) Where an application is made under9. The lease of the Chullora premises is dated 4 December 1985. It is expressed to be made between Caltex and W. Wehbe Pty Limited - not W.A. Wehbe Pty Limited as the title of the application No. G357 of 1986 would suggest. No mention of this discrepancy was made during the hearing, but it may be that consideration should be given to amending the company's name in the title of the proceedings. The lease is for a period of three years commencing on 1 October 1985 and terminating on 30 September 1988. The term of the lease needs to be understood against the background of s. 17 of the Act which provides that a franchisor shall not fail or refuse to renew a franchise agreement except on one or more of a number of specified grounds. It follows that, if the company wished to continue in occupation of the premises beyond 30 September 1988, it could do so unless Caltex could establish one or more of the grounds provided for in s. 17. In addition to the lease, there is also an agreement dated 4 December 1985 between Caltex and the company which provides for the sale to the company of such quantities of Caltex petroleum products "as are necessary to satisfy customer demand for Caltex petroleum products at the service station during the term of the agreement". The agreement contains a number of conditions and other provisions to which it is unnecessary to refer. The period of the agreement coincides with the period of the lease, namely, the period of three years commencing on 1 October 1985. The agreement, like the lease, is a franchise agreement for the purposes of the Act.
sub-section (4), the Court may, by order,
either-
(a) declare the notice referred to in that
sub-section to have had, or to have, no
effect; or
(b) 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 sub-section
(4), the court shall not declare the notice
referred to in that sub-section 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)".
10. The notice of termination upon which Caltex relies is dated 23 July 1986. The notice commences with references to the lease and the other agreement, which is referred to as a "supply contract" and with the statement that both the lease and the supply contract constitute franchise agreements to which the Act applies. The notice then says that, in accordance with s. 16(3) of the Act, Caltex gives notice that, "upon the following ground, the Lease and Supply Contract are to be terminated on the 29th day of August 1986. Caltex requires you to vacate and give up possession of the premises on that date".
11. The notice in fact contained nine grounds. I propose to set out the
first of these together with the particulars of it and the
statement of facts
in support of it. I shall then refer to the remaining grounds, the
particulars of them and the statement of facts
in support of them in an
abridged way. The first ground and the particulars and statement of facts
relating thereto are as follows:-
"1. FIRST GROUND12. The second ground is to the same effect as the first but in respect of a different consignment of distillate. The quantity was again 6,700 litres and the date of the alleged receipt also 20 March 1986. But the time of the receipt was said to be between 10.00 a.m. and 11.00 a.m. rather than between 8.30 a.m. and 9.00 a.m. The driver in each case was said to be one John Harold Martin.
The Lease and Supply contract are being
terminated by Caltex upon the ground
referred to in Section 16(2)(c) of the
... Act, namely that the Company
performed an act which constituted an
offence punishable, in the case of a
franchise (sic) being a body corporate,
by a fine of $500 or more.
1.1 Particulars of the First Ground and
Statement of Facts Relating Thereto
The Company received at the premises on
the 20th March, 1986 a quantity of
6,700 litres of distillate the property
of Caltex, the Company at the time of
receipt of such distillate knowing same
to have been stolen.
At the 20th March 1986 Walhan Abdullah
Wehbe was a director and shareholder of
the Company and was the person who
controlled the activities of the
Company.
Section 188 of the Crimes Act, 1900, as
amended in force in New South Wales
("the Crimes Act") provides,
inter-alia, that whosoever receives any
property, the stealing whereof amounts
to a felony, knowing the same to have
been stolen, shall be guilty of a
felony, and may be indicted, and shall
be liable to penal servitude for ten
years.
Section 7 of the Crimes Act provides,
inter-alia, that where the felonious
receiving of any property is expressed
in any Act to be an offence, every
person shall be deemed to have such
property in his possession within the
meaning of the Act who has any such
property in his custody, or knowingly
has any such property in the custody of
another person or knowingly has any
such property in a place whether
belonging to him or occupied by himself
or not and whether such property is
there had or placed for his own use, or
the use of another.
Statement of Facts of the First Ground
At or about 0835 hours on the 20th day
of March 1986 Caltex Tanker Cab
Registration FQW-607, Trailer Licence
CF-7083 driven by John Harold Martin
arrived at the premises. At or about
0850 hours Martin began discharging
distillate from the tanker into
underground storage at the premises.
At or about 0855 hours, whilst the
distillate was being discharged into
underground storage tanks, the said
Walhan Abdullah Wehbe arrived at the
premises and conversed with Martin. At
or about 0902 hours Wehbe departed from
the premises. At this time a person
working at the premises climbed on
of the tanker and examined the
measuring stick in the tanker. At or
about 0912 hours Martin, having
discharged into underground storage at
the premises a quantity of 6,700 litres
of distillate, drove the vehicle from
the premises. The quantity of
distillate as aforesaid comprised part
of a quantity totalling 27,000 litres
loaded by Caltex at its Banksmeadow,
NSW terminal and invoiced for delivery
by Caltex to the State Rail Authority,
Loco Running Yard, Enfield, NSW
(Invoice No. BA08435)".
13. The third ground is in similar terms to the earlier two but alleges a receipt of stolen distillate by the company between 4.30 p.m. and 5.00 p.m. on 21 March 1986. The driver of the tanker was said to be one Dennis Leslie Bedworth.
14. The fourth ground is in similar terms to the earlier ones, but was alleged in respect of a receipt of stolen distillate which occurred, not at the Chullora service station, but at another Caltex service station situated at 110 Canterbury Road, Bankstown. The lessee of that service station was not the company, but the earlier mentioned company, M. & G. Wehbe Brothers Pty Limited, which was the applicant in application No. 258 of 1986. The ground nevertheless alleges receipt of stolen distillate by the company, that is, the applicant, W.A. Wehbe Pty Limited. As will be seen when I come to the evidence, there is no evidence to support this allegation. It is not, therefore, open to Caltex to rely on this ground in relation to the Chullora service station because it is not shown that the company, which is the franchisee, was implicated in the receipt of the stolen distillate at Bankstown. But there is evidence that Mr. Wehbe was. In consequence a ground in similar terms is available to Caltex in relation to the South Strathfield service station of which Mr. Wehbe is the franchisee. Whether the ground has been made out is a matter I leave until I have considered the evidence.
15. The essential allegation is that stolen distillate was received at the Bankstown service station between 10 a.m. and 11 a.m. on 9 May 1986. Mr. Wehbe is said to have been implicated in the offence, notwithstanding that he is not shown to have been a director or employee of the franchisee, M. & G. Wehbe Brothers Pty Limited. I shall leave the explanation of how he is said to have been involved in the crime until I come to deal with the evidence.
16. The fifth ground may be referred to shortly. It alleges receipt of stolen distillate by the company between 9.00 a.m. and 9.20 a.m. on 3 June 1986 at the Chullora service station.
17. The remaining grounds are not based on primary facts different from those alleged in relation to the earlier grounds. Rather they allege the commission by the company of different offences arising out of the same incidents as are relied upon in the earlier grounds. Ground 6 alleges that the company conspired and agreed with Mr. Wehbe, Mr. Martin and Mr. Bedworth to commit an offence, namely, to cheat and defraud Caltex and the State Rail Authority, and did solicit, encourage or persuade persons including Mr. Wehbe, Mr. Martin and Mr. Bedworth to cheat and defraud Caltex and the State Rail Authority. The facts relied upon are those relied upon in support of the first, second, third, fourth and fifth grounds of the notice. Without going to the detail of it, ground 7 alleges that the company was an accessory both before and after the fact to a felony, the felony being that committed either by Mr. Martin or by Mr. Bedworth who are said to have stolen the distillate. The eighth ground alleges that the company, with intent to obtain for the benefit of itself and other persons, including Mr. Wehbe, Mr. Martin and Mr. Bedworth, a valuable thing, namely quantities of distillate, the property of Caltex, did concur in the making of a written statement, particulars of which are given, which was known to the company to be false or misleading in a material particular. That leaves the ninth ground which need not be referred to further because it was not relied upon at the hearing.
18. The service station at South Strathfield was originally leased to Mr. and Mrs. Salonitides and Mr. and Mrs. Tadros. The lease was dated 25 May 1984 and was for a period of three years from 29 April 1984 to 28 April 1987. On 20 May 1984 the lease was assigned, with the consent of Caltex, to Mr. Wehbe. On 5 June 1984 a supply agreement was entered into between Caltex and the Salonitides' and the Tadros'. Nothing turns on the fact that it was executed after the assignment to Mr. Wehbe which had been effected on 20 May 1984. The supply agreement was for the same period as the lease. Section 17 of the Act would prevent Caltex from refusing to renew the lease and supply agreement against the wishes of Mr. Wehbe except on one of the grounds specified in the section.
19. The seven grounds relied upon in the notice relating to the South Strathfield service station are identical with grounds 1 to 7 in the notice relied upon in relation to the Chullora service station except for changes in the form of the particulars to allow for the fact that Mr. Wehbe, rather than the company, is the lessee of the South Strathfield service station. In the application relating to that service station Caltex is, as I have mentioned, able to rely on the fourth ground relating to the delivery of distillate to the Bankstown service station on 9 May 1986.
20. The substantial question in the case is whether Caltex has made out the grounds upon which it relies in each of the notices. Although Caltex is the respondent in each application, the onus rests upon it of establishing that the grounds have been made out; para. 16(6)(a) of the Act. If any of the grounds is established, further questions will arise. One of these is the effect of such a finding in relation to Mr. Hatti. In his case there is an initial question whether he is a franchisee within the meaning of the Act. Whether he is or not, further questions will arise whether the Court is satisfied that the determination of the agreements is just and equitable having regard to all the circumstances; see para. 16(6)(b) of the Act.
21. The first matter to be considered then is whether the grounds have been made out. The determination of this question involves a consideration of the evidence which counsel for Caltex conceded was circumstantial. There was no direct evidence to support any of the allegations made in support of any ground. The allegation in each case is that Mr. Wehbe was involved in the commission of a crime. Because his is said to have been the hand which controlled the company, it is also alleged that the company itself was guilty of similar criminal conduct, at least in relation to receipts of stolen distillate at Chullora.
22. A little needs to be said of the standard of proof. Although the
question is whether Mr. Wehbe and the company were parties
to one or more
crimes, these are, nevertheless, civil proceedings. The standard of proof is
upon a balance of probabilities; see
Helton v. Allen [1940] HCA 20; (1940) 63 CLR 691. But
in considering the evidence and determining whether or not the Caltex case has
been made out, I must bear
in mind the seriousness of the allegations which
are made; Briginshaw v. Briginshaw [1938] HCA 34; (1938) 60 CLR 336, particularly at pp
360-363. However, the standard remains that of proof upon a balance of
probabilities, not
proof beyond reasonable doubt. The distinction was
emphasized in Rejfek v. McElroy [1965] HCA 46; (1965) 112 CLR 517 where the Court said (pp.
521-2):-
"But the standard of proof to be applied in a23. In order to place the evidence in a proper framework, it is necessary to consider it against the background of the relevant provisions of the criminal law which apply. These are to be found in the Crimes Act 1900 (N.S.W.). The crime of receiving stolen goods is provided for in s. 188 of that Act. It provides that whosoever receives any property, the stealing whereof is a felony, knowing the same to have been stolen, shall be guilty of felony, and may be indicted, either as an accessory after the fact, or for a substantive felony. Section 7 of the Crimes Act provides, inter alia, that where, by the Crimes Act, the felonious receiving of any property, or its possession without lawful cause or excuse, is expressed to be an offence, every person shall be deemed to have such property in his possession within the meaning of such Act who has any such property in his custody.
case and the relationship between the degree
of persuasion of the mind according to the
balance of probabilities and the gravity or
otherwise of the fact of whose existence the
mind is to be persuaded are not to be
confused. The difference between the
criminal standard of proof and the civil
standard of proof is no mere matter of
words: it is a matter of critical substance.
No matter how grave the fact which is to be
found in a civil case, the mind has only to
be reasonably satisfied and has not with
respect to any matter in issue in such a
proceeding to attain that degree of
certainty which is indispensable to the
support of a conviction upon a criminal
charge ..."
24. Larceny itself is provided for in s. 117 of the Crimes Act. It too is a felony. It may be mentioned in passing that the Crimes Act provides in s. 9 that, whenever by the Act a person is made liable to the punishment of penal servitude, the offence for which such punishment may be awarded is a felony. Wherever in the Act, the term "felony" is used, the same shall be taken to mean an offence punishable by penal servitude.
25. Section 476 of the Crimes Act provides for the summary punishment of some indictable offences. Receiving stolen property is one such offence. Section 476(7) provides that the maximum term of imprisonment, or penal servitude, to which a person may be sentenced by a magistrate under s. 476 in respect of any one offence is two years. The sub-section also provides that the maximum fine which may be imposed by a magistrate under the section is, in respect of any one offence, $2,000.
26. Section 360A provides for the indictment of corporations for offences. Every provision of an Act (including the Crimes Act) relating to offences punishable upon indictment or upon summary conviction may, unless a contrary intention appears, be construed to be applied to bodies corporate as well as individuals. Section 360A(6) provides, so far as relevant, that, where the penalty in respect of any offence is a term of imprisonment only, the court before which the offence is tried may, if it thinks fit, in the case of a body corporate, impose a pecuniary penalty not exceeding, where the term of imprisonment exceeds two years, $2,000. "Imprisonment" includes penal servitude. The penalty provided for the offence of receiving stolen property is penal servitude for ten years; s. 188.
27. It follows from this analysis that, if the company or Mr. Wehbe or both of them are shown to have received stolen property, the provisions of para. 16(1)(c) of the Act will apply. In the case of the Chullora service station, where the franchisee is the company, it will be established that the franchisee has performed acts which constitute offences punishable by a fine of $500 or more. In the case of the South Strathfield service station it will be established that the franchisee, Mr. Wehbe, has performed acts which constitute offences punishable by imprisonment. In this case it may also be established that the making out of one or more of the grounds will tend to show that Mr. Wehbe is dishonest or otherwise not of good character; see sub-para. 16(3)(c)(ii).
28. It remains to mention ss. 345 and 346 of the Crimes Act. The former section provides that every principal in the second degree in any felony shall be liable to the same punishment as the principal in the first degree. Section 346 provides that every accessory before the fact to any such felony may be indicted, convicted and sentenced as a principal in the felony and shall be liable in either case to the same punishment as the principal felon, whether the principal felon has been tried or not or is amenable to justice or not.
29. I can now come to a consideration of the evidence led in support of the grounds relied upon in the two notices. In the course of the hearing it emerged that Caltex had expected to be able to call in its case Mr. Martin and Mr. Bedworth who it alleged were the thieves of the distillate. In the event, its expectations were not realized because it was unable to effect service of subpoenas upon either of them. It would have been open to it to seek an adjournment to enable them to be called, but no application for an adjournment was made. The absence of Mr. Martin and Mr. Bedworth from the witness box made Caltex's task of proving its case more difficult. But in the submission of its counsel it has discharged the onus of proof which it bears to the requisite standard; cf Briginshaw v. Briginshaw earlier cited. The question is whether it has done so.
30. In support of its case Caltex relied upon the following essential
facts:-
1. On each of the days on which stolen distillate was said to31. The expectation of Caltex that it would have available to it the evidence of Messrs. Martin and Bedworth was not the only expectation it had which was not realized. Another was that it would be able to use the business record provisions of the Evidence Act 1914 to introduce into evidence a number of its own internal documents. But some key documents were not admitted. Indeed, in the end, counsel for Caltex did not press the tender of them. Critical documents for Caltex were documents known as bulk trip logs. According to the system which Caltex employed, drivers were required, before leaving a terminal with a load of fuel, to make out a bulk trip log. This was intended to show the nature and quantity of the product being delivered, the numbers of the prime mover and tanker vehicles which were being used, the destination of the delivery and the times in and out of the terminal. In each case it was intended that the driver sign the record. The trouble about the bulk trip logs relevant to the present case is that they were not signed. Furthermore, the Caltex witness, Mr. Lambrianew, through whom the documents were produced was unable to identify the handwriting on them notwithstanding that the names of either Mr. Martin or Mr. Bedworth appeared at the top of them. It was in these circumstances that the tender of the bulk trip logs for the deliveries of fuel purported to have been made to the State Rail Authority on 20 March 1986 was withdrawn. However, other bulk trip logs were tendered. The bulk trip log relevant to the delivery effected on 21 March 1986 was admitted as were two relevant to the delivery to Bankstown on 9 May 1986. The bulk trip log for the delivery effected on 3 June 1986 is also in evidence. However, the evidence shows that the bulk trip logs made out on 9 May and 3 June 1986 were falsified.
have been delivered to Chullora and, in the one case, to
Bankstown, private investigators, and in one case the police,
observed a Caltex tanker at the Chullora or Bankstown service
stations apparently making a delivery. There is dispute
concerning what the investigators were able to see, and this
is a matter to be dealt with when I come to the detail of
each investigator's observation. But Caltex's case is that
on each occasion fuel was being delivered. I have used the
word "fuel" because, except on the last occasion on 3 June
1986, the investigators were unable to establish that the
deliveries were of distillate. They may have been, but their
observation was such that it would not have enabled them to
tell.
2. Neither the records of Caltex nor those of the service
stations disclosed that any distillate was intended to be
delivered to the service stations on the days in question.
In other words the records of both Caltex and the service
stations did not disclose any order for distillate to be
delivered on the various days nor any delivery of distillate
on those days. Furthermore, the tankers observed making the
deliveries were not scheduled to make any delivery of any
product to the service stations on the days in question.
3. In four cases the fuel went into one or more tanks at the
Chullora service station, the lessee and franchisee of which
was the company. In the other case the fuel went into one or
more tanks at the Bankstown service station. The evidence
established that Mr. Wehbe exercised a substantial degree of
control over the operations of both service stations.
4. In the absence of evidence to explain how the fuel came to be
delivered to the service stations, it should be inferred that
the deliveries on each occasion were of stolen distillate and
that Mr. Wehbe, and thus the company, knew this to be so.
This inference might the more readily be drawn in the absence
of evidence from Mr. Wehbe who was not called to give
evidence.
32. Other documents which are in evidence are three invoices to the State Rail Authority for consignments of distillate on 20 (two consignments) and 21 March 1986. These documents had been annexed to an affidavit sworn by a Mr. Alfred. The affidavit had been filed on behalf of Caltex but, as events turned out, it was not read in its case. However, the invoices were tendered by counsel for the company and Mr. Wehbe because they were said to be for consignments of fuel alleged to have been stolen on those days. The reason counsel wished them in evidence is that on each appears a signature purporting to acknowledge receipt, on behalf of the State Rail Authority, of the full amount of the delivery in question. The problem is that, without the accompanying bulk trip log, it is difficult to relate the consignments referred to in the invoices to any particular times during which the vehicles in question were absent from the terminal or to any particular delivery of fuel.
33. With these general matters in mind, it is now possible to come to a consideration of each of the grounds relied upon in the notices. I deal initially with grounds one to five in each notice which are, as I have said, in similar terms. I do so, notwithstanding that, for reasons earlier mentioned, Caltex is unable to rely on the fourth ground, it being the delivery to Bankstown, in the application concerning the Chullora service station.
34. The first ground alleges that on 20 March 1986 a quantity of 6,700 litres of distillate, the property of Caltex, was received at the Chullora premises, the company knowing the same to have been stolen. The offence is alleged to have been committed between 8.30 a.m. and 9.30 a.m.
35. In evidence is one of the invoices earlier mentioned. It is Caltex invoice No. BAO8435 addressed to the State Rail Authority of N.S.W. The name of the authority is prefaced by the words, "Charge to". The invoice also contains an instruction to send the distillate which is referred to in the invoice to the State Rail Authority's Loco Running Yard at Enfield near Sydney. Enfield is not far from Chullora. The delivery date shown in the invoice is 20 March 1986. The supply point, that is, the point from which the distillate was loaded into the tanker, was Caltex's Banksmeadow Terminal. The invoice was for 27,000 litres of distillate for which the sum of $12,627.90 was charged. The invoice also showed that the delivery was to be effected in vehicle No. 240 and that the trip was No. 086. The invoice has been signed above a printed notation, "Goods received as Above". The signature is difficult to make out but its presence would suggest that the invoice was signed by an employee of the State Rail Authority.
36. Mr. Lambrianew's evidence establishes that the vehicle numbered 240, is a prime mover owned by Caltex. Its registration number is FQW-607. Coupled to the prime mover was a petroleum products trailer tanker numbered 292. This vehicle is owned by Caltex and has the registration No. CF-7083. Mr. D.B. Travini is a licensed private inquiry agent. According to his evidence, he commenced watching the Chullora service station at about 8 a.m. on 20 March 1986. At 8.35 a.m. he observed a prime mover towing a tanker wagon into the garage. The registration number of the prime mover was FQW-607 and that of the tanker wagon CF-7083. At 8.50 a.m. Mr. Travini observed the driver of the tanker alight from it and connect a number of hoses from the under portion of the tanker into what appeared to him to be inlets for underground tanks under the driveway of the service station premises. He concluded that a load of motor fuel was being delivered from the tanker into the underground tanks at the service station.
37. At 8.55 a.m. he saw a Mercedes Sedan motor car, registration number WW-600, enter the service station. He saw a person whom he recognized as Mr. Wehbe arrive. He said that Mr. Wehbe spoke with the driver of the tanker for approximately five minutes and left just after 9 a.m. At 9.12 a.m. the driver disconnected the hoses and left the premises. He said the driver was approximately 5 feet 10 inches high, about 45 years of age and had short, sandy hair.
38. Mr. Travini was cross-examined closely about his observations. This cross-examination established that Mr. Travini's view was limited and that it is unlikely that he saw the tops of tanks being removed. Moreover, there is a question mark as to whether, if the tanker were unloading fuel, it would have used more than one hose. Evidence given by a Mr. Houlton, a driver of some experience, suggests that the usual practice would have been to use one hose only rather than a number. Nevertheless, Mr. Travini's evidence persuades me that the tanker and trailer did go to the service station and that it did discharge fuel into at least one of the tanks in the service station. In my opinion, that is the only reasonable inference which is open. Plainly, the prime mover and tanker did arrive at the service station. Notwithstanding my reservation whether more than one hose was used, the fact that any was used establishes, in my opinion, upon the probabilities, that fuel was being discharged. I am reinforced in the conclusions I have drawn by the length of time the tanker was at the premises. Mr. Travini's evidence also establishes that Mr. Wehbe was present during part of the time that the tanker was there.
39. It is common ground between the parties that no distillate was recorded as having been ordered by, or delivered to, the Chullora service station on 20 March 1986. The records of Caltex and of the company are to the same effect. However, the difficulty is that the evidence is restricted to deliveries of distillate. There is not evidence concerning the delivery of or absence of delivery of other motor fuel, for example, petrol. The evidence is silent as to whether any such delivery was made at the request of the company or Mr. Wehbe on that day. As mentioned, Mr. Travini would not have been able to tell whether what was being delivered was distillate or another type of fuel. Furthermore, although the invoice is in evidence, there is nothing to show the times during which the delivery referred to in that invoice was made. One does not therefore know whether the delivery was being made, or was intended to be made, during the period Mr. Travini had the prime mover and tanker under observation. Really, the invoice is unhelpful in establishing the Caltex case.
40. There is, however, further evidence to be considered. As mentioned, Mr. Lambrianew gave evidence of the system employed by Caltex to record deliveries. He said that the system which was followed was that at the end of each day or shift the bulk trip logs for that day or shift were filed and retained. Mr. Lambrianew extracted from the file all bulk trip logs which referred to deliveries made by Mr. Martin on 20 March 1986. He also extracted all bulk trip logs for that date which referred to the prime mover and trailer observed by Mr. Travini at the Chullora service station on that day. Copies of the bulk trip logs were annexed to his affidavit. Mr. Lambrianew said that, from his search of the bulk trip log files, there were no bulk trip logs in the files referable to deliveries made either by Mr. Martin or the prime mover and tanker observed by Mr. Travini at the Chullora service station on 20 March 1986.
41. Originally, counsel for Caltex sought to tender the bulk trip logs. The difficulty about their tender, as I have mentioned, was that they were not shown to have been signed by Mr. Martin and Mr. Lambrianew could not identify his handwriting. It was in those circumstances that counsel withdrew the tender but submitted that the balance of what Mr. Lambrianew had said was admissible. My note of what occurred, which appears at p. 324 of the transcript, discloses that counsel for the Wehbe interests objected to the last sentence of the relevant paragraph of Mr. Lambrianew's affidavit which identified the bulk trip logs. I further noted that counsel for Caltex did not press their tender but that he said that he wished to use the material in the paragraphs for the purposes of s. 7E of the Evidence Act. That section provides that, where, in any proceeding, the happening of an event of any description is in question and in the course of a business, a system has been followed to make and keep a record of the happening of all events of that description, oral or other evidence to establish that there is no record of the happening of the event in question is admissible to prove that the event did not happen. The section provides, that where evidence is, or is proposed to be, tendered under the section, the Court may require that the whole or a part of the record concerned be produced. What counsel for Caltex was concerned to do was to tender the records searched out by Mr. Lambrianew in case the Court should require their tender. In the light of the objection by counsel for the Wehbe interests, I did not make the admissibility of Mr. Lambrianew's evidence conditional upon the tender of the records. The evidence to which I have referred tends to establish that the relevant prime mover and tanker were not intended by Caltex to effect the delivery of any motor spirit, distillate or petrol, on 20 March 1986.
42. In summary then the evidence led in support of ground one is capable of
establishing:-
(a) A delivery of fuel of some kind was made by a CaltexI propose to defer coming to a conclusion on whether the first ground has been made out until I have considered the evidence led in support of the remaining grounds two to five inclusive.
tanker between 8.30 a.m. and 9.30 a.m. on 20 March.
(b) A delivery of distillate to the State Rail Authority was
purported to have been effected in whole or in part at an
unspecified time on 20 March 1986. The delivery, if
effected, was effected in the same tanker and trailer as
had unloaded fuel at the Chullora service station.
(c) Caltex has no record of the vehicle making any delivery of
fuel, distillate or petrol, at any time on 20 March 1986.
43. The second ground relates to a second consignment of distillate said to have been destined for the State Rail Authority on 20 March 1986. In evidence is a Caltex invoice dated 20 March 1986 addressed to the State Rail Authority of N.S.W. for the supply of 27,000 litres of distillate for the price of $12,627.90. The invoice is numbered BAO8437 and states that the consignment was to be sent to the State Rail Authority's Loco Running Yard at Enfield. The invoice is signed above the words, "Goods Received as Above" by the same person who signed invoice No. BAO8435 forming part of the evidence relied upon in support of the first ground. The delivery was again to be effected by vehicle No. 240. This was the same prime mover as was referred to in the earlier invoice.
44. After that vehicle had left the premises some time after 9 a.m. on 20 March, Mr. Travini continued his observations. At 10.02 a.m. he observed the prime mover and tanker return. The prime mover was driven by the same person who had been there earlier. He saw him alight from the vehicle, connect a number of hoses from the under portion of the tanker to what appeared to be inlet points for underground storage tanks. At 10.40 a.m. he saw him withdraw the hoses from the underground tanks and return them to the vehicle. The vehicle left the premises at 10.43 a.m.
45. I have earlier mentioned that it is common ground between the parties that no delivery of distillate to the Chullora service station on 20 March 1986 was recorded either by Caltex or the company. Mr. Lambrianew's evidence also establishes that the tanker observed by Mr. Travini was not shown in Caltex' records to have made any delivery of fuel of any kind to the Chullora service station on that day. The evidence in relation to the second ground is thus in a similar state to that led in support of the first ground. Again I defer coming to a conclusion about whether the ground has been established.
46. The third ground alleges receipt by the company of stolen distillate on 21 March 1986 between 4.30 p.m. and 5 p.m. In evidence is an invoice number BAO8583 for the delivery on 21 March 1986 of 27,000 litres of distillate at the State Rail Authority at Enfield. A signature (again indistinct, but different from those on the earlier invoices) appears above the words, "Goods Received as Above". The invoice records that 26,300 litres, rather than 27,000 litres, were delivered. The amount charged was $12,300.51.
47. The vehicle by which the delivery was to be effected was numbered 3901. Bulk trip log No. 0187249 is in evidence. It was raised in respect of the delivery referred to in the invoice. It shows that the driver of the vehicle was Mr. D. Bedworth and that the vehicle left the Banksmeadow Terminal at 3.15 p.m. and returned at 5 p.m. The bulk trip log is dated March 1986. The day of the month has been omitted but nothing turns on this. The evidence of Mr. Lambrianew establishes that vehicle No. 3901 is a prime mover owned by Caltex and has a registration number, NKR-593. It was coupled to trailer tanker which was also owned by Caltex and bore the registration number CN-4549.
48. Mr. R.L. Hartnett is a licensed private inquiry agent. He said that at approximately 4 p.m. on 21 March 1986 he commenced watching the service station at Chullora. At 4.34 p.m. he observed a prime mover and tanker wagon enter the premises from the north. The registration number of the prime mover was NKR-593 and that of the trailer GN-4549. His evidence that the number of the trailer was GN-4549 was subsequently corrected to say that it was in fact CN-4549. Mr. Hartnett said that he saw the driver of the tanker alight and connect a number of hoses from the under portion of the tanker to what he observed to be inlets on the tarmac of the driveway. He said that it appeared to him that a load of motor fuel was being delivered from the tanker into the underground tanks at the service station. At 4.45 p.m. he observed the driver disconnect the hoses from the tanks, replace them on to the trailer and, at 4.46 p.m., leave the premises heading in a northerly direction. He said the driver was approximately 6 feet 1 inches tall, of solid build, approximately 30 years old, with dark brown hair, a moustache and spectacles. Mr. Hartnett said that he had seen Mr. Wehbe leave the service station at 3.50 p.m. He saw him return at 4.49 p.m. Mr. Wehbe was not present, therefore, whilst the tanker was there.
49. Like Mr. Travini, Mr. Hartnett was questioned closely as to his observations, particularly his ability really to see whether fuel was being discharged and his observation that there were a number of hoses in use. My conclusions in relation to Mr. Hartnett's evidence are similar to those in relation to Mr. Travini's evidence. I accept the general purport of it but have a reservation as to whether more than one hose could have been used.
50. It is common ground that there is no record of either Caltex or the company which discloses any delivery of distillate to the Chullora service station on 21 March 1986. Furthermore, there is no record of any order for any such distillate for that day. Again Mr. Lambrianew's evidence establishes that there is no record of any delivery of fuel of any kind to the service station at Chullora on 21 March 1986 in the vehicle observed by Mr. Hartnett.
51. The evidence in support of the third ground is much stronger than it is in the case of the two earlier grounds. That is principally because of the gaps which are filled in by the bulk trip log which is in evidence. Again, however, I defer drawing conclusions for the time being.
52. The fourth ground relates to stolen distillate said to have been received on 9 May 1986, not at the Chullora service station, but at the service station leased to M. & G. Wehbe Brothers Pty Limited at Bankstown. I have earlier said that this ground is not available to Caltex in the application concerning Chullora because the provisions of para. 16(1)(c) of the Act do not apply unless it is the franchisee who performs a relevant act, in this case, knowingly receiving stolen property. The franchisee of the Chullora service station is the company. If the evidence establishes the receipt of stolen distillate at the Bankstown service station on 9 May 1986 it will, nevertheless, not establish that the distillate was received by the company. The fact that the distillate may have been received by M. & G. Wehbe Brothers Pty Limited with Mr. Wehbe's connivance is not to the point. But, if the facts relied upon in support of the ground are established, the similar ground in the notice concerning the South Strathfield service station will be available to Caltex because in that case the franchisee is Mr. Wehbe himself. Because of the similarity of the grounds in each notice I propose to consider the evidence led in support of the ground at this point. But I emphasize that the ground, if established, will only be applicable in the application concerning the South Strathfield service station.
53. The offence is alleged to have been committed between 10.15 a.m. and 11 a.m. on 9 May 1986. In evidence are three bulk trip logs for 9 May 1986. Two are for deliveries of 26,300 litres of distillate to the State Rail Authority at Enfield. The third is for the delivery of a product known as process oil to a company in Auburn. It is unnecessary to refer further to that bulk trip log. The driver of the vehicle making the two earlier deliveries is shown as Mr. D. Bedworth. The deliveries were made in the vehicle numbered 3901. This, as has already been established, was a Caltex prime mover registered No. NKR-593. It was coupled to a tanker trailer, the registered number of which was CN-4549. The first bulk trip log states that Mr. Bedworth left the Banksmeadow Terminal at 7.15 a.m. and returned at 9.45 a.m. The second shows that he left the Silverwater Terminal at 10.30 a.m. and returned at 12.30 p.m. Another record is in conflict with the times of arrival and departure shown on the two bulk trip logs. It is a computer printout produced by Mr. Lambrianew. It shows the loading and time of departure details for Caltex tanker trucks leaving its Silverwater Terminal. The printout shows that prime mover No. 3901 and the trailer which was coupled to it left the Silverwater Terminal at 9.39 a.m. It also shows that that trip was the first trip for that vehice on 9 May 1986 from the Silverwater Terminal.
54. Mr. A.J. Ciardi is a licensed private inquiry agent. Shortly after 6 a.m. on 9 May 1986 he commenced watching the service station at Bankstown. He said that at approximately 10.17 a.m. he observed a tanker, the registration number of which was CN-4549, drive into the service station and park on the driveway. He noticed that the cab number of the prime mover was 3901. He saw the driver alight and connect a number of hoses from the under portion of the tanker to what he "observed to be inlets on the tarmac of the driveway". Mr. Ciardi said that it appeared to him that a load of motor fuel was being delivered from the tanker into the underground tanks at the service station. He said that the hoses remained connected to the underground inlet points until 10.48 a.m. when they were disconnected. The tanker left the premises at 10.57 a.m.
55. I am satisfied that I should accept the evidence of Mr. Ciardi that the tanker was at the Bankstown service station delivering fuel between 10 a.m. and 11 a.m. on 9 May 1986. Accordingly, I infer that the bulk trip logs, which were, as counsel for the Wehbe interests established in his cross-examination of Mr. Lambrianew, filled out by Mr. Bedworth, did not correctly indicate the period during which he was away on the relevant deliveries to the State Rail Authority. The inference is thus open that Mr. Bedworth falsified the two logs and that a consignment of distillate for the State Rail Authority was, in whole or in part, delivered to the service station at Bankstown on 9 May 1986.
56. For this ground to be available to Caltex in the application concerning the South Strathfield service station, it will need to be established that Mr. Wehbe was knowingly engaged in the receipt of stolen distillate by M. & G. Wehbe Brothers Pty Limited. Mr. Ciardi did not observe Mr. Wehbe at the Bankstown service station at the time the delivery was being made. The evidence upon which Caltex relied to implicate Mr. Wehbe in the illicit receipt which it alleges occurred is that of Mr. A.G. Man. Mr. Man is a retail sales representative employed by Caltex. At the relevant time he was responsible for a sales territory which is known within Caltex as "the Bankstown territory". This territory includes the Chullora, South Strathfield and Bankstown service stations. Mr. Man deposed to a conversation with Mr. Wehbe which occurred early in 1985 at about the time he had taken over the territory. He was already well acquainted with Mr. Wehbe. Mr. Wehbe was told that Mr. Man was responsible for the Bankstown area. According to Mr. Man, whose evidence on this matter I accept, he said, "That's good because I've got three sites in this area, Chullora, Bankstown and South Strathfield". During the course of the conversation Mr. Wehbe showed Mr. Man a business card. A copy of the card is in evidence. The most prominent words on it are W. Wehbe Pty Limited. Above, below and beside those words are the names and addresses of ten service stations, some Caltex and some B.P. The service stations include Caltex Chullora, Caltex South Strathfield and Caltex Bankstown. Mr. Man referred in detail to negotiations which he had had with Mr. Wehbe principally concerning the business carried on at the Chullora service station. He referred, however, to Caltex's practice of making bulk oil available to its service stations at a cheaper price if the dealer buys it by the palette load rather than in smaller quantities. Mr. Man said that Mr. Wehbe had, on a number of occasions, negotiated such purchase with him in respect of the supply of oil to the three service stations, including the Bankstown service station. This evidence, and further evidence given by Mr. Man orally, particularly in his cross-examination, which is to the same effect, would enable an inference to be drawn, if I were to find that stolen distillate had been delivered to the Bankstown service station on 9 May 1986, that Mr. Wehbe was implicated in its receipt.
57. Again I defer drawing final conclusions on whether the ground has been established. But before leaving the evidence concerning this ground, I should mention evidence given by Mr. Hartnett of observations made by him at the Bankstown service station during the evening of 9 May 1986. Shortly after 11 p.m. he observed a tanker, not a Caltex tanker, arrive at the service station. He saw the driver connect two hoses to inlets on the tarmac of the service station. The other end of the hoses was connected to a pump situated behind the tanker. The driver started the motor and sat in the cabin until shortly after 12 midnight on 10 May 1986. He then removed both hoses from the inlets and replaced them on to the tanker. The vehicle was driven in a northerly direction along Canterbury Road. Mr. Hartnett followed it as far as the Heathcote Road past the Lucas Heights Atomic Research Centre. The inference I was asked to draw by counsel for Caltex was that the earlier delivered consignment of stolen fuel had been pumped out and was being redelivered to somewhere on the South Coast. I feel unable to draw the inference that the fuel which was pumped out was stolen fuel. I do not therefore regard Mr. Hartnett's evidence of his observations during the evening of 9 May 1986 as relevant to any issue in the case.
58. The fifth ground concerns a delivery of distillate said to have been made to the Chullora service station on 3 June 1986 between 9 a.m. and 9.20 a.m. Bulk trip log No. 0188529, which is in evidence, suggests that Mr. Bedworth left the Banksmeadow Terminal at 6.30 a.m. and returned to the Terminal at 9.15 a.m. on 3 June 1986. His task was to deliver 26,300 litres of distillate to the State Rail Authority at Enfield. The log states that the Authority was invoiced for the delivery by an invoice which was numbered BAI3177.
59. Detective Constable T.L. Crowley is attached to one of the units in the Major Crimes Squad of the Criminal Investigation Branch of the N.S.W. Police Force. He said that at about 9.20 a.m. on 3 June 1986 he entered the forecourt of the Caltex service station at Chullora. He saw a Caltex petrol tanker parked and observed the driver to be unloading a hose from the undercarriage of the petrol tanker. The transcript records him as saying that the tanker bore the registration number CN-4459. I am satisfied by the evidence of Detective Senior Constable D.J. Isemonger soon to be referred to that either the transcript is incorrect or that Detective Constable Crowley was in error in giving the number as CN-4459. Detective Constable Isemonger's evidence establishes the number to have been CN-4549. To the same effect is the evidence of Mr. Ciardi who also observed the tanker at the Chullora service station on 3 June 1986.
60. Before I go to Detective Constable Isemonger's and Mr. Ciardi's evidence, I should complete the account of Detective Constable Crowley's evidence. After observing the unloading of the hose from the undercarriage of the petrol tanker, he parked his vehicle and walked back to the tanker. He said that the hose was connected from a compartment, compartment No. 6 on the tanker, to an underground tank of the service station. The stopcock valve on the tanker was in the on position. Detective Constable Crowley said that he had experience of how fuel was unloaded from tankers into underground tanks. After returning to his vehicle and having a conversation on the police radio, he walked past the driver of the tanker and turned off the stopcock. Prior to turning it off, he noticed a visi-gauge in the neck of the hose and he could see the liquid flowing through it. He said that, as he turned the stopcock off, other police arrive and the driver of the tanker was arrested.
61. Detective Constable Crowley said that he climbed on to the top of the tanker and dipped each compartment. There were six compartments; he obtained various readings which he recorded. He said that he calculated that about 1,000 litres of distillate (which he identified as the product being unloaded) had been discharged from compartment No. 6. He said that the driver of the tanker who had been arrested was Mr. Bedworth. The evidence given by Detective Constable Crowley of the amount of fuel discharged has an importance when I come to consider one of the submissions made by counsel for the company and Mr. Wehbe. The submission is that, in relation to the first and second grounds, there was no evidence that 6,700 litres of distillate was discharged on each occasion on 20 March 1986.
62. Detective Constable Isemonger said that he parked his car near the entrance to the Caltex Banksmeadow Terminal at about 5.55 a.m. on 3 June 1986. At 6.10 a.m. he saw a petroleum tanker leave the Terminal and travel west along Foreshore Road. The trailer's registration number was CN-4549. He followed it to the State Rail Authority Terminal at Greenacre arriving there at approximately 6.50 a.m. At approximately 7.35 a.m. Constable Isemonger saw the tanker drive out of the State Rail Authority Terminal and turn right into Cosgrove Road. He recognized the driver of the vehicle as Mr. Bedworth. The tanker drove past him and he followed it to the Caltex terminal where it arrived at 8.07 a.m. At approximately 8.40 a.m. the tanker again left the Terminal. Detective Constable Isemonger followed it west along Foreshore Road and other roads to Greenacre. He saw the tanker turn into the Caltex service station at Chullora where it arrived at about 9.15 a.m. He saw the driver get out of the cabin and speak with another man. The driver connected hoses from the underside of the tanker to the service station tarmac. He saw what appeared to him to be the unloading of whatever was carried in the tanker. He saw another man get on top of the tanker and dip one of the tanker's compartments. A few moments later he saw another person, Detective Constable Crowley, move to the side of the tanker and turn a valve on its underside. He saw the arrest of Mr. Bedworth.
63. Mr. Ciardi said that he commenced watching the Chullora service station early on 3 June 1986. Shortly before 9 a.m. he saw Mr. Wehbe arrive at the premises. He stayed only for two minutes and then left. At 9.15 a.m. he saw the tanker registered no. CN-4549 enter the premises and park adjacent to what appeared to be underground tank inlets. He said he observed the driver connect a number of hoses from the under portion of the tanker to what appeared to be inlets on the driveway. At about 9.20 a.m. he saw a number of police cars drive into the service station.
64. This is another case in which the bulk trip log times are established to be erroneous. I accept the evidence of the two police officers and Mr. Ciardi that the tanker was unloading distillate at the Chullora service station at the times to which they have deposed.
65. It remains to say that tanker No. CN-4549 is the tanker previously referred to. It was coupled to prime mover No. NKR-593. There is again no record amongst those kept either by Caltex or the company of any delivery of distillate to the Chullora service station on 3 June 1986; nor is there any record of an order for distillate to be delivered on that day or of the payment to Caltex for distillate delivered then.
66. The evidence led in support of the fifth ground is very strong. Plainly the inference is open that the company did receive stolen distillate at the Chullora service station on 3 June 1986. I shall come to the question of whether that inference should be drawn in a moment.
67. The remaining grounds relied upon in the notice concerning the Chullora service station are each dependent upon the establishment of the facts relied upon in support of grounds one to five. The sixth ground is founded upon an alleged conspiracy, the parties to which included the company, Mr. Wehbe, Mr. Martin and Mr. Bedworth, to commit an offence, namely, to cheat and defraud Caltex and the State Rail Authority. The seventh ground is founded upon the company being an accessory both before and after the fact to a felony, namely, the felonies said to have been committed by the company in grounds 1 to 5. The eighth ground is founded upon the company having, with intent to obtain for the benefit of itself and other persons, including Mr. Wehbe, Mr. Martin and Mr. Bedworth, a valuable thing, namely, quantities of distillate the property of Caltex, concurred in the making of a written statement, namely, the bulk trip logs to which reference has been made, which were known to the company to be false or misleading in a material particular. As earlier mentioned, the ninth ground was not relied upon at the hearing.
68. I should next refer more specifically to the grounds in the notice served in respect of the service station at South Strathfield. As mentioned, the first five grounds are, in substance, identical with the first five grounds of the notice relied upon in the case of the Chullora service station. The only difference is that the notice served in relation to the South Strathfield service station alleges that Mr. Wehbe committed the various acts of receiving stolen property rather than the company. Grounds 6 and 7 are based on Mr. Wehbe being party to a conspiracy similar to that alleged in the notice served in relation to the Chullora service station and being an accessory before and after the fact to a number of felonies. The matters relied upon are in substance the same as those relied upon in the Chullora notice. In relation to each of the grounds relied upon in the notice served in respect of the South Strathfield service station it was submitted that pursuant to sub-para. 16(2)(c)(ii) of the Act, the franchisee, Mr. Wehbe, was shown, by reason of the commission of the various offences, to be dishonest or otherwise not of good character. That is not an essential matter upon which Caltex needs to rely for the establishment of its case. If the facts relied upon are established, para. (c) will apply because sub-para. (i) makes it applicable if a franchisee performs an act which constitutes an offence punishable by imprisonment.
69. I can now come to the question whether I am satisfied that the grounds relied upon in each notice have been established. I approach that task by considering grounds 1 to 5 first of all. There are firstly some general matters to be mentioned. As earlier said, Mr. Wehbe, Mr. Martin and Mr. Bedworth were not called to give evidence. Evidence was led on behalf of Caltex of attempts made at various times to serve subpoenas upon Mr. Martin and Mr. Bedworth. For reasons which need not be mentioned, these attempts failed. But it should be said that Caltex did its utmost to have these witnesses available to be examined.
70. Charges laid against Mr. Wehbe for receiving stolen property had not been dealt with at the time the matter was heard. In the week before the hearing commenced consideration was given by counsel for the company and Mr. Wehbe to seeking an adjournment pending the outcome of the criminal proceedings. After due consideration, counsel decided not to make any such application. Although there is no evidence of it, a reason why Mr. Wehbe was not called as a witness may have been the outstanding criminal charges against him. In ordinary circumstances the failure of a party, without explanation, to go into the witness box enables a court the more readily to accept the case which is brought against him. In particular it enables it the more readily to draw inferences which are open on the face of the other party's evidence; Jones v. Dunkel [1959] HCA 8; (1959) 101 CLR 298. I see no reason why the ordinary rule should not apply in this case. Criminal proceedings or not, the evidence led in the Caltex case shows that Mr. Wehbe was a person who was likely to have had knowledge of the circumstances in which the various deliveries of fuel or distillate were made. His failure to give evidence does mean that inferences which are open on the face of the Caltex case may the more readily be drawn.
71. The next matter I mention is that in cases involving the alleged receipt of stolen property it is sometimes critical to consider any explanation which an accused person has offered for his possession or, alternatively, to take into account the fact that he has given no explanation for it. That is a matter which I have put aside in the present case because there is no evidence that Mr. Wehbe was ever asked to explain how the distillate came into the company's possession.
72. A matter upon which some reliance was placed by counsel for Mr. Wehbe and the company was the absence of evidence of quantities of distillate said, in three of the grounds, to have been received. The quantities are stated in specific terms in grounds 1, 2 and 5. In relation to the deliveries relied upon as constituting grounds 1 and 2, the quantity in each case is said to have been 6,700 litres. In relation to the delivery on 3 June 1986, being the delivery relied upon to constitute ground 5, the quantity is said to have been 1,000 litres. The quantities said to have been delivered on 21 March and 9 May, the third and fourth grounds, are not specified. I have little doubt that the quantities were specified because it was anticipated that evidence would be given by Mr. Martin and Mr. Bedworth. Be that as it may, the evidence of Constable Crowley does establish that the quantity delivered on 3 June 1986, before he stopped the discharge and caused Mr. Bedworth to be arrested, was 1,000 litres.
73. There is no evidence, at least directly, of the quantities of 6,700 litres said to have been received on each of the two occasions on 20 March. However, Detective Constable Crowley's evidence of the amount of distillate delivered in the period during which the tanker was discharging on 3 June enables an inference to be drawn as to the amount delivered on each of the occasions on 20 March. One cannot be precise about it and one could not draw an inference that exactly 6,700 litres was delivered on each occasion. Nevertheless, I am prepared to infer that the quantity delivered on each occasion was of the order of 6,000 litres. I draw the inference from a calculation of the discharge rate which must have obtained in the case of the delivery on 3 June. Had I not been able to draw that inference, I would not have regarded the absence of evidence about this matter as critical. The essential allegation was the receipt of a quantity of stolen distillate and that this constituted an offence of the kind specified in para. 16(2)(c) of the Act.
74. It remains to mention that during the argument there was some discussion of the question whether Caltex was able to rely on the principles relating to the admissibility of evidence of similar facts in support of its case. In the view that I take of the matter, I do not need to reach a conclusion on that question. It is sufficient to say that I have not relied on the evidence led in support of any ground as tending to establish the facts relied upon in support of any other.
75. Three principal matters were relied upon by counsel for the company and
Mr. Wehbe in order to dissuade me from finding the Caltex
case established.
These were:-
(a) Except in relation to the delivery made on 3 June 1986,76. I deal with these submissions as follows:-
when Mr. Bedworth was arrested, the evidence that fuel
actually flowed from the tankers into the tanks of the
Chullora or Bankstown service stations was unsatisfactory.
I could not be satisfied that it did.
(b) The proof that consignments of distillate destined for the
State Rail Authority were diverted to one or other of the
service stations was unsatisfactory. The proof depended
on Caltex' internal record keeping, particularly the bulk
trip logs which were not in evidence in the case of the
two deliveries made on 20 March 1986. Furthermore, in
three cases, namely, the two deliveries on 20 March and
the delivery on 21 March 1986, the invoice had been signed
by someone purporting to act on behalf of the State Rail
Authority. The receipt was for the whole quantity, 27,000
litres in the first two cases, and 26,300 litres in the
third. No evidence was called to establish that these
consignments were not delivered to the Authority or were
delivered short.
(c) There was insufficient evidence to implicate Mr. Wehbe or
the company in knowingly receiving stolen distillate.
(a) I reject this submission. It was based principally on the77. I can now come directly to the question whether each ground is established. My conclusions are as follows:-
various private investigators being unable actually to see
fuel flowing into the tanks of the service stations.
Reliance was also placed on difficulties the investigators
would have had in observing whether inlets to the service
stations' tanks were open. It was suggested that the
tankers may have been present because the drivers were on
private errands of their own and that these were
unconnected with the delivery of fuel at all. Some
support for these suggestions was attempted to be obtained
from answers to questions asked some of the Caltex
witnesses in cross-examination about the habits and
private pursuits of some of the drivers. In my opinion
the submission is quite unrealistic. In each case a
tanker was present at the relevant service station for an
appreciable period of time. Hoses were seen to have been
pulled from their housing on the tankers. On some
occasions people were observed dipping either the tanks of
the service station or the tankers themselves. In my
opinion there is an overwhelming balance of probabilities
in favour of the view that the tankers were, on each
occasion, delivering fuel. A further point of criticism
of the Caltex case was the evidence given by all who
observed these apparent deliveries of there being more
than one hose in use. Detective Constable Crowley was the
only witness who said that he saw only one hose. Even
Detective Constable Isemonger, who observed the undoubted
delivery which occurred on 3 June 1986, referred to there
being more than one hose. I have referred to this matter
earlier. It may be that the observations of the private
investigators and Detective Constable Isemonger were at
fault. If they were, it seems strange that so many
independent people made similar observations on the
separate occasions which are involved. Be that as it may,
what matters is the general impression which each witness
had of what was occurring. Each saw at least one hose
from the tanker on the ground. In the absence of other
evidence, that is plainly an indication to an observer
that delivery of fuel was being effected on each occasion.
(b) The absence of the bulk trip logs for the deliveries made
on 20 March 1986 does create problems for Caltex. Similar
problems do not exist in relation to the other deliveries
because the bulk trip logs are in evidence. But, in
relation to the deliveries which occurred on 9 May 1986
and 3 June 1986, problems of a different kind are created
by the falsification of the bulk trip logs for those
deliveries. A further problem for Caltex is created by
the signatures on the invoices for three of the deliveries
which are relied upon. On the face of the invoices, these
signatures acknowledge receipt by the State Rail Authority
of the deliveries of distillate made on 20 March and 21
March 1986. What the significance of these problems is in
relation to the establishment of the various grounds is a
matter I leave for consideration until I come to deal with
each ground individually.
(c) In order to deal with this submission I need to refer
again to the evidence of Mr. Man. It will be recalled
that when Mr. Man took over as sales representative for
the Bankstown area, he called on Mr. Wehbe early in 1985
and told him of his new responsibilities. Mr. Wehbe said
that he had three sites in the area, Chullora, Bankstown
and South Strathfield. This was confirmed by the business
card which Mr. Wehbe produced at the time of the
conversation. Earlier Mr. Man had said that during the
period 1978 to 1985 he had often acted in a relieving
responsibility. It was when he was relieving that he had
first come into contact with Mr. Wehbe at the Chullora
service station. Mr. Man said that whenever there was a
matter to be negotiated concerning any of the service
stations "within the Wehbe Group" in the Bankstown area,
it was usually Mr. Wehbe with whom he spoke or negotiated.
Evidence to which reference has already been made shows
that on a number of occasions Mr. Wehbe was seen by
investigators on the Chullora site. There are other
indications in the evidence of Mr. Wehbe's direct
participation in the management of the service stations,
particularly the Chullora service station. The totality
of the evidence establishes that Mr. Wehbe was the
principal executive in "the Wehbe Group" and certainly the
principal executive of the company. With the exception of
the delivery to Bankstown on 9 May 1986, the distillate in
question went into the tanks of the Chullora service
station. I have said in relation to each of these
deliveries that the inference is open that Mr. Wehbe knew
that this was so. I am clearly of opinion that that
inference should be drawn.
Ground 178. The allegation is that on 20 March 1986 the company and Mr. Wehbe received 6,700 litres of distillate knowing it to have been stolen. The allegation that it was part of a consignment of 27,000 litres of distillate loaded by Caltex at its Banksmeadow terminal and invoiced for delivery to the State Rail Authority was not made in the ground itself nor in the particulars thereof. In my opinion the allegation was not an essential one. The absence of evidence that the stolen distillate was part of that consignment is not, therefore, fatal to the ground. The essence of the ground is the receipt by the company of 6,700 litres of distillate knowing it to have been stolen. There is evidence that an identified Caltex tanker made a delivery of fuel of some kind on 20 March 1986. There is no record of any delivery of distillate to the service station on that day nor any record of the identified tanker being required to go to the Chullora service station for any purpose at all. In my opinion the inference is open that the company received into its tanks a quantity of stolen fuel. I am satisfied that that inference should be drawn. There is, however, either no evidence, or insufficient evidence, to establish that the fuel was distillate. If this is an essential allegation, the ground has not been established. In my opinion it is not an essential allegation any more than is the quantity of 6,700 litres which is specified. The essential allegation is the receipt by the company of stolen fuel on the day in question. I therefore find the first ground established.
Ground 279. The considerations applicable to the second ground are similar to those relating to the first ground. Again I find it established.
Ground 380. This ground is plainly established. In reaching that conclusion I have taken into account the signature on the invoice which relates to the subject delivery. I conclude that the strength of the other evidence about this delivery outweighs any significance which the signature should have. There are a number of possibilities. The signature may not be a genuine one; or the consignment may have been short delivered without the knowledge of the person who signed the invoice. These hypotheses are consistent with innocence on the part of all relevant employees at the State Rail Authority. Other hypotheses which may have applied would involve the participation of one or more employees of the State Rail Authority in what occurred.
Ground 481. As in the case of the first two grounds, there is a question whether the delivery to the Bankstown service station on 9 May 1986 was part of a consignment destined for the State Rail Authority. This doubt arises because of the falsification of the bulk trip logs. But the allegation is made only in the statement of facts in support of the ground. It does not form part of the ground itself. The evidence led in support of the ground plainly establishes that stolen distillate was received at the Bankstown service station on 9 May 1986.
Ground 582. This ground, like the third, is plainly established.
83. The foregoing analysis leads to the conclusion that the facts relied upon in support of the first five grounds of each of the notices have been established. Because Mr. Wehbe has been shown, in effect, to be the alter ego of the company it is established that the company knowingly received the stolen distillate on each of the four occasions on which it was delivered to the Chullora service station. To put it another way, it was the company which received the distillate into its tanks. The company knew that the distillate was stolen because Mr. Wehbe's knowledge was the company's knowledge. Accordingly, grounds 1, 2, 3 and 5 are established in the case of the Chullora service station.
84. Since Mr. Wehbe himself did not receive the stolen distillate, he himself has not been shown to have been guilty of receiving stolen goods. But the evidence plainly establishes that he was an accessory before the fact in each case. Pursuant to s. 346 of the Crimes Act earlier referred to, he is therefore liable to be indicted, convicted and sentenced as a principal in the felony and liable to the same punishment as the principal felon, that is, the company. That is the position not only in relation to the deliveries of distillate made to the Chullora service station, but also in relation to the delivery made to the Bankstown service station on 9 May 1986. It follows that grounds 1 to 5 inclusive of the notice served in relation to the South Strathfield service station have been also made out.
85. That leaves the remaining grounds in each notice. In the circumstances I do not find it necessary to reach conclusions on those grounds. The same primary facts are relied upon. Nothing would be added to the overall strength of the Caltex case if they were established. Furthermore, no detailed submissions were addressed in support of these grounds. It would seem to me that there may have been evidentiary difficulties in relation to them. Particularly is that so in the case of the sixth ground which alleges a conspiracy involving Mr. Wehbe, the company, Mr. Martin and Mr. Bedworth. One problem concerns the allegation that two of the conspirators were Mr. Wehbe and the company. There is a problem because of my conclusion that Mr. Wehbe was the alter ego of the company. A director of a company, who is solely responsible for the conduct of the company's business, cannot be convicted of conspiring with the company, since only one mind is involved despite the fact that the company has a separate legal personality; Reg. v. McDonnell (1966) 1 QB 233; Halsbury, 4th Ed., Vol. 11, para. 59, p 45.
86. In summary then, I find grounds 1, 2, 3 and 5 of the notice served in relation to the Chullora service station and grounds 1 to 5 inclusive of the notice served in relation to the South Strathfield service station established. In relation to the grounds relied upon in relation to the South Strathfield service station I find that both sub-paras. (i) and (ii) of para. 16(2)(c) of the Act are applicable. The offences which I have found proved are each punishable by imprisonment. Furthermore, the fact that they have been committed tends to show that Mr. Wehbe is dishonest or otherwise not of good character. Subject to the special position of Mr. Hatti, the remaining question is whether, pursuant to para. 16(6)(b), I am satisfied that the termination of the agreement, that is the lease, is just and equitable having regard to all the circumstances. In the case of the Chullora service station I am satisfied that it is just and equitable that the lease be determined. The findings I have made show that on four occasions the franchisee, that is the company, received stolen fuel into its tanks. No explanation for this criminal conduct has been offered the Court. No assurance has been given it that this conduct will not be repeated. Even if such assurances had been given, it would be wrong, in my opinion, to compel a franchisor to retain in control of a service station of which it is the lessor, a lessee which engaged in such conduct.
87. There are two further things to be said about Chullora. Firstly, if, contrary to my findings, I had not found grounds 1 and 2 established because the evidence did not prove receipt of stolen distillate as opposed to stolen motor fuel of an unspecified kind, the evidence led in support of grounds 1 and 2 would, nevertheless, have been relevant to the question whether it was just and equitable that the lease should be terminated. Secondly, evidence was led in the company's case from a Mr. Hiotellis who said that he had expressed an interest in purchasing the Chullora service station from the company. There was no evidence from Mr. Wehbe that the company was prepared to sell the service station business. That is sufficient to dispose of any weight which Mr. Hiotellis' evidence might have had. Apart from that consideration, I should say that Mr. Hiotellis did not impress me as a witness. I have a substantial reservation whether he was telling the truth.
88. In relation to the South Strathfield service station I propose to come to conclusions about the implications of sub-para. 16(6)(b) of the Act for that case when I have considered the case brought by Mr. Hatti. I turn to that matter.
89. Mr. Hatti was not shown to have been a party to the lease or supply agreement entered into in respect of the South Strathfield service station. But he claims to have an interest in the business which is there carried on, and also an interest in the lease, which he claims to have acquired from a Mr. and Mrs. Ghaleb who were said to have been former joint owners of the service station with Mr. Wehbe. In order that Mr. Hatti's case may be properly understood it is necessary to refer to the earlier stated definitions of "franchise agreement" and "agreement" in s. 3 of the Act. In the submission of counsel for Mr. Hatti it is enough for him to establish that Mr. Hatti has the interest which he claims and that he communicated notice of his interest to Caltex. This is what he says happened. In my opinion the submission is correct. If the evidence demonstrates that Mr. Hatti in fact has the interest in the business and the lease which he claims and that Caltex had notice of it, he is a franchisee within the meaning of the Act because he is a party to a franchise agreement within the meaning thereof.
90. Mr. Hatti said that he had purchased a share in the business of the service station at South Strathfield in November 1985 from Mr. and Mrs. Ghaleb. He said that since the date he acquired the interest, he had had the day to day conduct and control of the business. He said the keys to the premises were in his possession and that no keys were held by Mr. Wehbe. He said that since he had been at the premises he had been responsible for the conduct of the business and had attended to all inquiries at the premises including dealings with Caltex.
91. Mr. Hatti said that there was a stocktake on the day that he was to take over the Ghalebs' interest in the business. He said that Mr. Man arrived mid to late morning on that day. Mr. Hatti said that he said to Mr. Man, "... to save us any complication later on, could you please finalize whatever has to be drawn up between Sam and Susie (the Ghalebs) and Caltex so that when I do start and officially take over the business there will be a clean sheet between Caltex and me". Mr. Man replied that that was something that Mrs. Ghaleb and he had been working on. Mr. Man said that he would look forward to doing business with Mr. Hatti. They shook hands and Mr. Man left the premises.
92. Mr. Hatti gave evidence of a further conversation he had with Mr. Man
about a week afterwards. His evidence was as follows:-
"(George Man): 'George you'll shortly be receiving93. Mrs. Ghaleb said that in or about September 1984 she and her husband had taken over the running and management of the service station at South Strathfield. They had purchased part of the business, being a share held by a Mr. Eljed. Mrs. Ghaleb deposed to conversations she had had in the presence of Mr. Wehbe, Mr. Man and a Mr. Nelson, who was Mr. Man's predecessor. During one of these conversations Mrs. Ghaleb said that she was introduced by Mr. Wehbe to Mr. Man and Mr. Nelson as his partner in the business.
an official Caltex statement which comes out at
the end of each month, showing a balance of
credits or debits. On that statement it will
show you the trading position, and there will be
a credit for (I think he said October). This is
a figure that will be owing to Sam and Susie, and
Wally, and you'll have to pay Sam and Susie for
half the amount which they're entitled to, and
that figure will continue on then for your normal
trading terms.'
(myself): 'George, also I understand there's a
cheque coming through for a claim that was made
by Sam and Susie against Caltex, for water in the
tanks - what's going to happen to that?'
(George Man): 'That will be coming through in the
near future, it will be mailed to the South
Strathfield address instead of going through to
Sam and Susie".
94. Mrs. Ghaleb said that prior to selling the share in the business to Mr. Hatti towards the end of 1985 she had a conversation with Mr. Man. She said, "George, we've decided to sell our share in the service station. We've had some dealings with some other people who were interested in buying all the business, Wally's share and ours as well but that's fallen through. We're interested to move on to something we think might be a bit better, so now we're going to try to sell just our share of the business".
95. Mrs. Ghaleb referred to the stocktake which she said occurred on 31 October 1985. She referred to the arrival of Mr. Man. Mr. Hatti was present but the stocktake was not done in his presence.
96. After I had reserved my decision, an application was made by counel for
Mr. Hatti to re-open his case. The purpose of the application
was to tender a
letter dated 1 November 1985 which Mr. Man had signed on Caltex letterhead. I
allowed the case to be re-opened and
the letter was tendered. It is in the
form of a reference and is signed by Mr. Man as Area Manager of Caltex. The
substance of the
letter is as follows:-
"Mrs. Susan Ghaleb was a partner lessee of the97. Both Mr. Hatti and Mrs. Ghaleb were cross-examined extensively about their evidence, but maintained that Mr. Man knew both of the Ghalebs' interest in the business and of the acquisition of that interest by Mr. Hatti.
Caltex Service Station, Hume Highway, South
Strathfield, when I took over the area in January
1985 and continued to do so until the partnership
was disbanded October 30, 1985.
During this period she managed the service
station showing dedication and business sense.
She displayed a pleasant character under
sometimes difficult conditions".
98. A further matter relied upon by counsel for Mr. Hatti was that, although Caltex's invoices for sales of motor fuel to the South Strathfield service station were always addressed to Mr. Wehbe, they were paid by cheques drawn upon the account of a company, Wehbe and Hatti Petroleum Pty Limited. The invoices were all signed by Mr. Man who acknowledged payment of them on Caltex's behalf. It was submitted that the inference should be drawn that in this way Mr. Man must have known of Mr. Hatti's involvement in the business.
99. Mr. Man denied that he knew that Mr. Hatti had acquired an interest in the business. He denied noticing the name, Wehbe and Hatti Petroleum Pty Limited, on the cheques which were paid for fuel delivered to the service station. His evidence was that he understood that Mr. Wehbe had acquired that interest so that he had become the owner of the entirety of the business and of the lease. His understanding, so he said, was that Mr. Hatti was Mr. Wehbe's manager. Support for Mr. Man's evidence in this respect is to be found in an affidavit sworn by Mr. Hatti on 11 September 1986. He there described himself as the manager of the South Strathfield service station. He also said that he had the day to day control and conduct of the business at the premises. A fair reading of what he said would suggest that he had that control in his capacity as manager rather than as the owner of an interest in the business. Although Mr. Man conceded that he knew that the Ghalebs had an interest in the business, he said that he had not known this until shortly before they sold. His evidence was that just prior to 31 October 1985 Mrs Ghaleb told him that they were selling the business back to Mr. Wehbe. He said that this came as a surprise to him because he had thought of them as managers only until that time.
100. I do not think that Mr. Man's evidence that he knew of the Ghalebs' interest in the business only shortly before they sold sits very well with the terms of the reference which he wrote on 1 November 1985. In that reference he said that Mrs. Ghaleb was a partner-lessee of the service station when he took over the area in January 1985. It is true that the reference cannot be regarded as being in direct conflict with Mr. Man's evidence, but the relevant part of it would leave the reader with the impression that both Caltex and Mr. Man were well aware of the Ghalebs' interest all along.
101. Mr. Man was recalled to give further oral evidence after the letter had been tendered. He maintained that he had not known of the Ghalebs' departure from the premises until a week or ten days prior to 31 October 1985 and, further, that he did not know, until that time, that they had some interest in the business. He was asked questions about the detail of the reference he had given Mrs. Ghaleb and agreed that another person reading the letter would take from it that he was at all times aware that, in the period from 1 January 1985, Mrs. Ghaleb was a partner-lessee in the service station. He was asked questions how he came to say that Mrs. Ghaleb was a partner-lessee. He said that he understood what a lessee was. His ultimate answer to these questions was that all he could say was that "it was a very bad choice of words".
102. Mr. Man swore a further affidavit which was read at the resumed hearing. He said that at about 1.15 p.m. on 30 October 1986 he attended the South Strathfield service station and had a discussion with Mr. Hatti. He referred to a circular letter to customers, a copy of which he had picked up the previous day. He asked for a further copy. The copy is headed "Wehbe Petroleum". Underneath is a reference to a post office box number at Bankstown and to the address of the South Strathfield service station. The circular is addressed to customers and is said to concern a new improved account facility. There is reference in it to offering a 30 day account at the service station. The system is described and it is said that it will be available from 1 November. The letter is signed above the printed name, "Wally Wehbe". The signature is not distinct, but it should be said that it does not appear to be similar to the signature which appears on the lease documents as the signature of Mr. Wehbe. In my opinion nothing turns on this. The important fact is that the circular was available at the South Strathfield service station. It was handed to Mr. Man by Mr. Hatti whose name appears nowhere on it.
103. Before Mr. Hatti's case was re-opened, counsel for Caltex tendered a letter from Mr. Wehbe's solicitors to Caltex. The letter said that the solicitors had been instructed by their client to advise Caltex that he wished to assign his interest under the current franchise agreement to Mr. Hatti "who is, as you are aware, fully engaged in the business at the subject service station". Caltex refused to agree to the proposal. There is also evidence from a Mr. Baracat that he was negotiating on behalf of a company in which he and his brother were said to be shareholders for the purchase of the service station. Counsel for Caltex relied on the circular letter, the letter from the solicitors and Mr. Baracat's evidence as clear indications that Mr. Hatti had no interest in the business or the lease. The fact that the Ghalebs may have had such an interest was not to the point. This evidence did not establish any interest in the business on the part of Mr. Hatti. Mr. Man's reference did not establish that matter either. All else was consistent with Mr. Hatti's own statement in his affidavit of 11 September 1986 in which he described himself as the manager of the South Strathfield service station.
104. The question which has to be decided is whether anything was said to Mr. Man by Mr. Hatti or the Ghalebs, particularly Mrs. Ghaleb, about Mr. Hatti taking over. An analysis of some of the earlier conversations which are relied upon by Mr. Hatti shows that, even if they are accepted at their face value, they are consistent with Mr. Hatti taking over on behalf of Mr. Wehbe rather than on behalf of himself. This is what Mr. Man said he was told by the Ghalebs and Mr. Hatti. That also is consistent with the letter written by Mr. Wehbe's solicitors, the circular letter to customers and Mr. Baracat's evidence. I do not think that the payment of the invoices by Wehbe and Hatti Petroleum Pty Limited affects this conclusion. The invoices were addressed only to Mr. Wehbe. I accept Mr. Man's evidence that he did not notice the name of that company on the cheques.
105. Having given the matter due consideration, I have reached the conclusion that I ought not accept Mr. Hatti's evidence and Mrs. Ghaleb's evidence insofar as their evidence suggests that Mr. Man was told that Mr. Hatti was acquiring the Ghalebs' interest in the business. I prefer Mr. Man's evidence on this matter because it is more in accordance with the probabilities. I confess that I have not reached that conclusion easily. I am unimpressed with Mr. Man's evidence concerning his knowledge of the Ghalebs' interest in the business. His letter is consistent with knowledge all along. Nevertheless, I do not think that I should allow that consideration to deflect me from making the finding that Mr. Man did not know that Mr. Hatti had some interest in the business.
106. Counsel for Mr. Hatti relied on aspects of the doctrine of estoppel in support of his case. However, I am satisfied that his submissions in that regard must fail unless it be found that Caltex, through Mr. Man, had knowledge of Mr. Hatti's interest. For that reason I reject the submissions based on estoppel. It may be, as counsel for Caltex submitted, that the submissions should be rejected for other reasons as well; and that this would be so even if it were established that Caltex had had knowledge of an interest of Mr. Hatti in the business. In the circumstances, it is unnecessary to consider those submissions and I express no view upon them.
107. It follows from what I have said that Mr. Hatti's application must be rejected because he is not a franchisee of the South Strathfield service station. He had no standing to bring his application No. G422 of 1986. There remains the question of whether it is, within the meaning of para. 16(6)(b) of the Act, just and equitable that the franchise agreements (the lease and the supply contract) be terminated. In reaching a conclusion on that matter I need to take into account all relevant circumstances. The franchisee is Mr. Wehbe. The considerations which apply in his case are the same as applied in the case of the Chullora service station. I am clearly of the opinion that it is just and equitable that the franchise agreements be terminated.
108. My conclusion in that regard makes it unnecessary to consider a substantial body of evidence which was led in relation to an alleged abuse by Mr. Wehbe and others of a pricing assistance scheme which Caltex made available to its franchisees in times of severe price cutting by other service stations in the area. This evidence was relied upon by Caltex to support its case that it was just and equitable that the franchise agreements relating to both service stations should be terminated. In the view that I take of the matter, it is unnecessary to reach conclusions on that matter and I do not.
109. Finally, I should say that, in the light of the findings I have made concerning Mr. Hatti, it would seem to me that there is no consideration based on his position which could militate against the conclusion being reached that the franchise agreement should be terminated.
110. My conclusions therefore are as follows:-
1. Grounds 1, 2, 3 and 5 of the notice served in relation to111. I do not propose today to make formal orders. I shall stand the matters over to enable the parties and their legal representatives to consider what I have said. When it is again in the list counsel for Caltex are to bring in short minutes of order to give effect to my decision.
the Chullora service station have been made out.
2. Grounds 1 to 5 inclusive of the notice served in relation
to the South Strathfield service station have been made
out.
3. It is just and equitable, having regard to all the
circumstances, that the relevant franchise agreements be
terminated.
4. Mr. Hatti is not a franchisee of the South Strathfield
service station.
5. Each application should be dismissed.
6. Mr. Hatti's cross-claim brought in application No. G358 of
1986 should be dismissed.
7. Orders should be made to give effect to the cross-claims
brought by Caltex in applications No. G357 and G358 of
1986.
8. The applicants should pay the entirety of Caltex's costs
of each application and cross-claim.
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