• Levitt Robinson

Lawyerly | Judge rejects 7-Eleven’s ‘risky’ bid for pre-trial ruling on objections to evidence

A judge has shot down what he called a risky but novel proposal by 7-Eleven for a pre-trial ruling on sample objections to the relevance of evidence in two franchise class actions.

In dismissing 7-Eleven's application on Monday, Federal Court Justice John Middleton found that although a pre-trial ruling may have been suitable in certain situations, the details of the contested evidence meant such an order was not appropriate in these class actions.

"In my view, this could be one of the most inappropriate circumstances to undertake the task that has been asked by the court. This is not a situation where we are dealing with an isolated question of principle or even a few affidavits that have come before the court involving their rejection or acceptance at trial," the judge said.

"This is a situation which basically involves the court taking a great deal of time at this stage of the proceeding dealing with relevance which in itself is a concept that relates to the inter-relationship of all the material before the court without the benefit even of all the evidence that may be adduced."

The class actions allege that 7-Eleven engaged in breach of contract, misleading and deceptive conduct, and unconscionable conduct that has kept franchisees from making a profit. According to the cases, very few of the franchises in the 7-Eleven system were financially viable without employees being underpaid or the owners of the franchises or their family members working unreasonable or unsociable hours at below-award rates.

7-Eleven barrister Robert Craig QC had urged Justice Middleton to make a pre-trial order under section 192A of the Evidence Act, saying his client had relevance objections to more than 31 lay affidavits from the class actions, which included 23 affidavits from franchisee group members.

An initial ruling on a sample of these objections was appropriate and would save time at the upcoming trial because of the sheer volume of existing objections," Craig told the court.

"We can't have a process where we force, through application on the eve of trial, your Honour, to wade through pages and pages and pages, hundreds of pages of objections," the barrister said.

Class action barrister David Pritchard SC opposed the bid, saying it was the first and most novel application of [section 192A] yet devised.

In rejecting 7-Eleven's request, Justice Middleton said that even a ruling on the samples, of which 7-Eleven proposed eight categories of objection, was not likely to resolve the issue before trial, which is due to commence in 13 weeks.

"If I may say so, having regard to the history of this matter, i'm not at all optimistic that that process would involve final agreement," the judge said.

There was also a risk of error in making this type of initial ruling because relevance would have to be decided without access to the full suite of evidence put forward by each party and could result in interlocutory appeals, Justice Middleton said.

"This is something which, on balance, it is too risky for the court to undertake now," the judge ruled.

This is not the first novel application heard in the 7-Eleven class actions. Last month, Justice Middleton rejected what was the first oral discovery application made in a class action.

The plaintiffs had sought oral discovery of former 7-Eleven employees Jatin Dewan, Emmaline Rose McKenna, Shane Radbone and Alan Rodrigues, who are bound by confidentiality clauses in their employment contracts.

"Whilst oral discovery may be appropriate in other circumstances, I have come to the clear view that this is not the occasion to exercise the power to order the proposed examinees to be now examined in the manner and on the examination topics sought by the applicants in these proceedings," the judge said.

The applicants lodged an appeal of the decision before Justice Middleton's judgment was published, but the appeal was dropped last month.

Progress in the class actions was stalled last year because of an application by 7-Eleven to have the Full Court decide whether common fund orders could be made at settlement or judgment. The application fizzled in October, and a special leave application was filed in the High Court in December.

An in-principle settlement between the applicants and ANZ, which was also named as a respondent, was approved by Justice Mark Moshinsky in August last year.

ANZ was accused of breaching its responsible lending obligations and the Code of Banking Practice, and engaging in unconscionable conduct by providing loans to purchasers of 7-Eleven franchises. Under the settlement, the class action applicants agreed to drop their claims against ANZ in exchange for the bank suspending the limitations period in the event they decide to pick up the claims later. The bank is not released from liability.

The plaintiffs are represented by David Pritchard SC, Philip Tucker, Gerald Ng and Nathan Li, instructed by Levitt Robinson. 7-Eleven is represented by Robert Craig QC and Fleur Shand, instructed by Norton Rose Fulbright.

The class actions are Davaria Pty Limited v 7-Eleven Stores Pty Ltd & Ors, which defines its group members as franchisees, and Pareshkumar Davaria v 7-Eleven Stores Pty Limited & Anor, which encompasses a broader class member definition that includes nominated directors and guarantors.

Original article can be found here.