FEDERAL COURT OF AUSTRALIA

Davaria Pty Limited v 7-Eleven Stores Pty Ltd (No 8) [2021] FCA 295

ORDERS

THE COURT ORDERS THAT:

Oral Discovery

1.    Prayers 2.1 to 2.6 inclusive of the interlocutory application filed by the applicants on 27 November 2020 (Applicants’ Application) be dismissed.

2.    By 4 pm on 24 March 2021, the applicants are to file and serve written submissions limited to 5 pages with respect to discharging the undertaking given by the applicants and their solicitors recorded in paragraphs 1 and 2 of the orders made on 13 November 2020 (Applicants’ undertaking).

3.    By 4 pm on 31 March 2021, 7-Eleven is to file and serve written submissions in reply limited to 5 pages.

4.    Any dispute as to the applicants’ undertaking is to be determined on the papers.

Pleadings

5.    By 4 pm on 8 March 2021, the applicants serve:

(a)    a proposed Third Further Amended Statement of Claim (3FASOC) which the applicants’ contend reflects or accords with the outcome of paragraph 1.1 of the applicants’ interlocutory application filed on 27 November 2020 seeking leave to amend their pleadings, as set out in the email from the Court sent to the parties at 12.42pm on 22 February 2021; and

(b)    a proposed Third Further Amended Originating Application (3FAOA).

6.    By 4 pm on 12 March 2021, the First Respondent (7-Eleven) is to notify the applicants whether it consents to the proposed 3FASOC and 3FAOA.

7.    If 7-Eleven consents to the proposed 3FASOC and proposed 3FAOA, by 4 pm on 15 March 2021, the applicants are to file and serve the 3FASOC and 3FAOA consented to.

8.    If 7-Eleven does not consent to the proposed 3FASOC and proposed 3FAOA, then the applicants and 7-Eleven are to confer to exchange any supporting affidavits and outlines of submissions by 4pm on 19 March 2021.

9.    The applicants pay 7-Eleven’s costs thrown away occasioned by the filing of the 3FASOC and 3FAOA.

10.    If 7-Eleven consents to the proposed 3FASOC and proposed 3FAOA pursuant to order 7, 7-Eleven is to file and serve any Defence to the 3FASOC by 1 April 2021.

11.    By 4 pm on 20 April 2021, the applicants file and serve any Reply.

Objections to Applicants’ lay evidence

12.    By 4 pm on 29 March 2021, after conferring with senior counsel retained in the proceeding, 7-Eleven file and serve its interlocutory application, and any submissions in support, seeking to exclude the applicants from relying upon certain lay evidence filed to date in the proceeding for the purposes of the initial trial.

13.    By 4 pm on 9 April 2021, the applicants are to file written submissions in relation to the application referred to in paragraph 10 above.

14.    The application is listed for hearing on an estimate of half a day at 10:15 am on 21 April 2021.

Lay and Expert Evidence

15.    Subject to further order of the Court, the applicants file and serve any further lay evidence in chief by the date that is 21 days after the final form of the 3FASOC is determined.

16.    Orders 11 to 14 of the orders made by Justice Middleton on 13 November 2020 are vacated.

17.    By 4 pm on 26 March 2021, the applicants file and serve their expert evidence in chief with respect to the alleged loss and damage suffered by Kaizenworld Pty Ltd.

18.    By 4 pm on 16 April 2021, the applicants file and serve their expert evidence in chief with respect to the alleged loss and damage suffered by Davaria Pty Ltd.

19.    Within 28 days of the production of documents pursuant to the subpoena issued to Metcash Trading Ltd (as amended by the orders of Justice Middleton dated 8 February 2021), the applicants file and serve their expert evidence in chief with respect to the claims set out in paragraphs 25 to 31 and 109 of the 3FASOC (C-Store claims).

20.    By 4 pm on 21 May 2021, 7-Eleven file and serve its lay evidence in answer, other than any lay evidence in answer to the expert evidence filed by the applicants with respect to the C-Store claims.

21.    By 4 pm on 11 June 2021, 7-Eleven file and serve its expert evidence in answer, other than in relation to the C-Store claims.

22.    By 4 pm on 5 July 2021, the applicants file and serve their lay evidence in reply, and expert evidence in reply (other than in relation to the C-Store claims).

23.    By 4pm on the date that is nine weeks after service of the applicants’ expert evidence with respect to C-Store claims referred to in order 19 above, 7-Eleven file and serve its expert evidence and any lay evidence in answer to the expert evidence filed by the applicants with respect to the C-Store claims.

24.    By 4pm on the date that is 3 weeks after service of 7-Eleven’s expert evidence with respect to C-Store claims referred to in order 23 above, the applicants file and serve any expert evidence in reply with respect to C-Store claims.

25.    The parties’ expert witnesses, other than in relation to the C-Store claims, are to participate in conclaves to be held by 16 July 2021.

26.    Each conclave of experts referred to in order 25 is to produce a report by 30 July 2021, identifying those matters upon which they do not agree and a brief statement as to the bases of their differences.

27.    The parties’ expert witnesses in relation to the C-Store claims are to participate in conclaves to be held by the date that is one week after service of the applicants’ expert evidence in reply with respect to C-Store claims referred to in order 24 above.

28.    Each conclave of experts referred to in order 27 is to produce a report by the date that is one week following the conclave referred to in order 27 above, identifying those matters upon which they do not agree and a brief statement as to the bases of their differences.

Opening submissions

29.    By 4 pm on 9 July 2021, the applicants file and serve their written opening submissions, limited to 50 pages.

30.    By 4 pm on 23 July 2021, 7-Eleven file and serve its written opening submissions, limited to 50 pages.

Trial Date

31.    Order 49 of orders made by Justice Middleton on 8 May 2020 is varied as per order 32.

32.    The matter be set down for trial to commence on 9 August 2021 with an estimate of 10 weeks.

Security for costs

33.    By 4 pm on 7 May 2021, 7-Eleven is to file and serve any application for further security for costs (7-Eleven’s Security for Costs Application), together with any submissions and evidence in support of the application.

34.    By 4 pm on 19 May 2021, the applicants are to file and serve any submissions and evidence in response to 7-Eleven’s Security for Costs Application.

35.    Unless the Court determines that an oral hearing is necessary or an oral hearing is requested by either party, 7-Eleven’s Security for Costs Application is to be determined on the papers.

Other matters

36.    The costs of, and incidental to, the applicants’ Application are reserved.

37.    With the exception of order 7, costs are otherwise reserved.

38.    The parties have liberty to apply.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

ORDERS

THE COURT ORDERS THAT:

Pleadings

1.    By 4 pm on 8 March 2021, the applicants serve:

(a)    a proposed Second Further Amended Statement of Claim (2FASOC) which the applicants’ contend reflects or accords with the outcome of paragraph 1.1 of the applicants’ interlocutory application filed on 27 November 2020 (Applicants’ Application) seeking leave to amend their pleadings, as set out in the email from the Court sent to the parties at 12.42pm on 22 February 2021; and

(b)    a proposed Third Further Amended Originating Application (3FAOA).

2.    By 4 pm on 12 March 2021, the First Respondent (7-Eleven) is to notify the applicants whether it consents to the proposed 2FASOC and 3FAOA.

3.    If 7-Eleven consents to the proposed 2FASOC and proposed 3FAOA, by 4 pm on 15 March 2021, the applicants are to file and serve the 2FASOC and 3FAOA consented to.

4.    If 7-Eleven does not consent to the proposed 2FASOC and proposed 3FAOA, then the applicants and 7-Eleven are to confer to exchange any supporting affidavits and outlines of submissions by 4pm on 19 March 2021.

5.    The applicants pay 7-Eleven’s costs thrown away occasioned by the filing of the 2FASOC and 3FAOA.

6.    If 7-Eleven consents to the proposed 2FASOC and proposed 3FAOA pursuant to order 3, 7-Eleven is to file and serve any Defence to the 2FASOC by 1 April 2021.

7.    By 4 pm on 20 April 2021, the applicants file and serve any Reply.

Objections to Applicants’ lay evidence

8.    By 4 pm on 29 March 2021, after conferring with senior counsel retained in the proceeding, 7-Eleven file and serve its interlocutory application seeking to exclude the applicants from relying upon certain lay evidence filed to date in the proceeding for the purposes of the initial trial.

9.    By 4 pm on 7 April 2021, the parties are to file written submissions in relation to the application referred to in paragraph 8 above.

10.    The application is listed for hearing on an estimate of half a day at 10:15 am on 21 April 2021.

Lay and Expert Evidence

11.    Subject to further order of the Court, the applicants file and serve any further lay evidence in chief by the date that is 21 days after the final form of the 2FASOC is determined.

12.    Orders 11 to 14 of the orders made by Justice Middleton on 13 November 2020 are vacated.

13.    By 4 pm on 5 March 2021, the applicants file and serve their expert evidence in chief with respect to alleged remuneration that the lead applicants in the VID182 proceedings could have derived from alternate employment and calculations concerning average wage rates and payroll assessments in 7-Eleven Stores at different points in time.

14.    Within 28 days of the production of documents pursuant to the subpoena issued to Metcash Trading Ltd (as amended by the orders of Justice Middleton dated 8 February 2021), the applicants file and serve their expert evidence in chief with respect to the claims set out in paragraphs 25 to 31 and 109 of the Third Further Amended Statement of Claim filed in VID 180/2018 (C-Store claims).

15.    By 4 pm on 21 May 2021, 7-Eleven file and serve its lay evidence in answer, other than any lay evidence in answer to the expert evidence filed by the applicants with respect to the C-Store claims.

16.    By 4 pm on 11 June 2021, 7-Eleven file and serve its expert evidence in answer, other than in relation to the C-Store claims.

17.    By 4 pm on 5 July 2021, the applicants file and serve their lay evidence in reply, and expert evidence in reply (other than in relation to the C-Store claims).

18.    By 4 pm on the date that is nine weeks after service of the applicants’ expert evidence with respect to C-Store claims referred to in order 14 above, 7-Eleven file and serve its expert evidence and any lay evidence in answer to the expert evidence filed by the applicants with respect to the C-Store claims.

19.    By 4pm on the date that is 3 weeks after service of 7-Eleven’s expert evidence with respect to C-Store claims referred to in order 18 above, the applicants file and serve any expert evidence in reply with respect to C-Store claims.

20.    The parties’ expert witnesses, other than in relation to the C-Store claims, are to participate in conclaves to be held by 16 July 2021.

21.    Each conclave of experts referred to in order 20 is to produce a report by 30 July 2021, identifying those matters upon which they do not agree and a brief statement as to the bases of their differences.

22.    The parties’ expert witnesses in relation to the C-Store claims are to participate in conclaves to be held by the date that is one week after service of the applicants’ expert evidence in reply with respect to C-Store claims referred to in order 19 above.

23.    Each conclave of experts referred to in order 22 is to produce a report by the date that is one week following the conclave referred to in order 22 above, identifying those matters upon which they do not agree and a brief statement as to the bases of their differences.

Opening submissions

24.    By 4 pm on 9 July 2021, the applicants file and serve their written opening submissions, limited to 50 pages.

25.    By 4 pm on 23 July 2021, 7-Eleven file and serve its written opening submissions, limited to 50 pages.

Trial Date

26.    Order 44 of orders made by Justice Middleton on 8 May 2020 is varied as per order 27.

27.    The matter be set down for trial to commence on 9 August 2021 with an estimate of 10 weeks.

Security for costs

28.    By 4 pm on 7 May 2021, 7-Eleven is to file and serve any application for further security for costs (7-Eleven’s Security for Costs Application), together with any submissions and evidence in support of the application.

29.    By 4 pm on 19 May 2021, the applicants are to file and serve any submissions and evidence in response to 7-Eleven’s Security for Costs Application.

30.    Unless the Court determines that an oral hearing is necessary or an oral hearing is requested by either party, 7-Eleven’s Security for Costs Application is to be determined on the papers.

Other matters

31.    The costs of, and incidental to, the applicants’ Application are reserved.

32.    With the exception of order 5, costs are otherwise reserved.

33.    The parties have liberty to apply.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

MIDDLETON J:

INTRODUCTION

1    These two proceedings, VID180/2018 (‘180 Proceedings’) and VID182/2018 (‘182 Proceedings’), have been case managed together and the trials in each proceeding will be heard concurrently.

2    On 19 February 2021, I heard the interlocutory applications the subject of these reasons. On 22 February 2021, I advised the parties of my decision in respect of those applications indicating I would provide brief reasons for my decision as soon as practicable. I did not want to delay providing the parties with my decision as the trial is looming and there are a number of significant interlocutory steps still required to be attended to by the parties.

3    These are the reasons for my decision. Formal orders in each proceeding were published on 5 March 2021, after a brief hearing on that day to finally determine the appropriate orders to formalise the decision of 22 February 2021, and to make interlocutory orders progressing the proceedings to a trial commencing on 9 August 2021.

4    At the hearing on 19 February 2021, I advised the parties the Court could accommodate a hearing commencing on 9 August 2021 for ten weeks (rather than six weeks as previously scheduled). I have set the trial down for ten weeks for a number of reasons, many which are significant to the exercise of my discretion in dealing with the interlocutory applications. I will explain this later in dealing with each interlocutory application but, in essence, I have allowed time at the trial to consider the additional matters raised in those amendments to the pleadings which I allowed, and to deal with various issues that in all probability will arise in relation to the adducing of evidence from those persons the subject of the interlocutory application seeking oral discovery (which I refused). By allowing ten weeks, this will also allow for some ‘slippage’ in the timetabling for the interlocutory steps (which is tight now some amendments have been allowed and expert evidence is still to be prepared), so that if the trial is delayed for a week (or even two), this could be accommodated and the trial could still proceed this year. If the trial could not be accommodated this year, then the likely trial commencement date would not be until the second quarter of 2022 at the earliest. No party desired this to occur, although the applicants effectively submitted that all the amendments sought should be allowed, and if the trial date needed to be vacated, so be it. I should mention that 7-Eleven did accept the trial date commencing 9 August 2021 could be achieved if no amendments were allowed. In my assessment the trial date can still be accommodated with the Court allowing some of the amendments, as they effectively cover matters already discovered or mentioned in proposed evidence.

5    I make this preliminary observation, and in doing so I do not want to be taken for saying the trial as scheduled should proceed at all costs. I recognise that disallowing some of the amendments sought involves precluding the applicants and existing group members from alleging a separate cause of action. The dictate in s 37M of the Federal Court of Australia Act 1976 (Cth) (‘Act’) is to facilitate the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible in the circumstances. However, management of litigation is not an end in itself. Whilst many cases settle, the ultimate aim of the process is to have a public trial. Of course, the parties must be given sufficient time to prepare and present their cases. Nevertheless, Parkinson’s Law can apply to litigation if the interlocutory processes are not confined. In my view, the applicants have had ample opportunity over three years to prepare their case, even if the new cause of action only became sufficiently apparent to the applicants after recent interlocutory processes in order for it to be properly pleaded.

6    The issues that arise in the interlocutory applications raise case management issues, which inevitably involve an evaluation of competing views. The enquiry will always be what does substantive law and justice require to be done in the circumstances confronting the case management judge, with the focus primarily being on progressing the proceeding to a public trial to quell the dispute.

RELEVANT PROCEDURAL HISTORY

7    I will briefly set out the relevant procedural history in both proceedings.

8    The proceedings were commenced on 20 February 2018. During 2018, the group member definition was amended and the applicants prepared three further amended pleadings (two in the 180 Proceedings and one in the 182 Proceedings), which 7-Eleven prepared defences to.

9    By letter dated 20 January 2020, Levitt Robinson Solicitors (the solicitors for the applicants) foreshadowed that it was instructed to file a Second Further Amended Statement of Claim in the 180 Proceedings (‘180 2FASOC’) because “in the course of reviewing 7-Eleven’s discovery, matters had come to the attention of the Applicant in [the 180 Proceedings] that now require the current further amended statement of claim to be amended”.

10    On 28 February 2020, the applicants obtained leave to file and serve a Second Further Amended Originating Application in the 180 Proceedings (‘180 2FAOA’) and the 180 2FASOC, as well as a Second Further Amended Originating Application (‘182 2FAOA’) and Further Amended Statement of Claim (‘182 FASOC’) in the 182 Proceedings. On 25 March 2020, 7-Eleven filed further defences in both proceedings.

11    On 8 May 2020, the original trial date of September 2020 was moved to August 2021.

12    In the 180 Proceedings, between 28 September 2020 and 24 October 2020 the applicants filed and served a total of 18 affidavits from the directors or guarantors of the franchisees (being the applicants in the 182 Proceedings: Mr Paresh Davaria, Mrs Khushbu Davaria, Mr Jatinder Singh and Ms Suman Kaur) as well as 14 group members.

13    In response to this evidence, 7-Eleven wrote to the applicants setting out its concerns as to the scope of the lay evidence and the extent to which the affidavits either did not respond to the common questions ordered in the 180 Proceedings, did not relate to the applicants’ claims, or went beyond the pleaded case.

14    At a time when a trial date and a timetable of steps leading to trial have been set (the earlier September 2020 trial date already having been vacated), and relatively shortly before 7-Eleven’s lay evidence is due, the applicants seek to further amend their claims against 7-Eleven.

15    On 27 November 2020, the applicants filed the interlocutory applications in both proceedings.

16    In the 180 Proceedings, by way of interlocutory application, the applicants seek:

(a)    leave to file and serve a proposed Third Further Amended Originating Application (‘180 3FAOA’) and Third Further Amended Statement of Claim (‘180 3FASOC’) (‘180 Amendment Application’); and

(b)    oral discovery (‘Oral Discovery Application’).

17    The interlocutory application is supported by an affidavit sworn by Mr Brett Imlay on 26 November 2020, and the proposed 180 3FAOA and 180 3FASOC form exhibits BRI-28 and BRl-29 to that affidavit. Following a request for particulars issued by 7-Eleven on 3 December 2020 (and a response provided by the applicants on 9 December 2020), the applicants filed and served a further affidavit sworn by Mr Imlay on 10 December 2020, with exhibit BRI-32 including an amended version of the proposed 180 3FASOC.

18    In the 182 Proceedings, by way of interlocutory application, the applicants seek leave to file and serve a proposed Third Further Amended Originating Application (‘182 3FAOA’) and Second Further Amended Statement of Claim (‘182 2FASOC’) (‘182 Amendment Application’).

19    This interlocutory application is supported by an affidavit sworn by Mr Imlay on 26 November 2020, and the proposed 182 3FAOA and 182 2FASOC form exhibits BRI-30 and BRI-31 to that affidavit.

20    The parties rely on the following affidavits in respect of the 180 Amendment Application and Oral Discovery Application:

(a)    affidavit of Mr Imlay sworn on 12 November 2020;

(b)    affidavit of Mr Nigel Jones affirmed on 12 November 2020;

(c)    affidavit of Mr Imlay sworn on 26 November 2020;

(d)    affidavit of Mr Stewart Levitt sworn on 1 December 2020;

(e)    affidavit of Mr Imlay sworn on 10 December 2020;

(f)    affidavit of Mr Jones affirmed on 10 December 2020;

(g)    affidavit of Mr Imlay sworn on 25 January 2021;

(h)    affidavit of Mr Jem Punthakey sworn on 15 February 2021; and

(i)    affidavit of Mr Jones affirmed on 15 February 2021.

21    In addition to those affidavits, the parties also rely on the affidavit of Mr Imlay sworn on 26 November 2020 in respect of the 182 Amendment Application.

22    On 11 December 2020, the interlocutory applications were listed for hearing before me. Prior to the hearing, the parties filed and served written submissions. At the hearing (which was otherwise a case management hearing), the Court made orders adjourning the hearing of the interlocutory application to 19 February 2021 and made directions for further evidence and submissions.

23    The parties filed the following written submissions:

(a)    applicants’ submissions concerning the 180 Amendment Application and the Oral Discovery Application dated 1 December 2020;

(b)    applicants’ submissions concerning the 182 Amendment Application dated 1 December 2020;

(c)    7-Eleven’s submissions concerning the 180 and 182 Amendment Applications dated 10 December 2020;

(d)    7-Eleven’s submissions concerning the Oral Discovery Application dated 10 December 2020;

(e)    applicants’ submissions in reply concerning the Oral Discovery Application dated 11 December 2020;

(f)    applicants’ submissions in reply concerning the 180 Amendment Application dated 10 February 2021;

(g)    applicants’ amended submissions in reply concerning the Oral Discovery Application dated 15 February 2021; and

(h)    7-Eleven’s submissions in rejoinder concerning the Oral Discovery Application dated 15 February 2021.

24    As I have indicated already, on 19 February 2021, following argument on the interlocutory applications, the Court reserved its decision. On 22 February 2021, the Court then announced its decision.

THE AMENDMENT APPLICATIONS

Relevant principles

25    The Court’s power to grant leave to amend a statement of claim after pleadings have closed is discretionary, and must be exercised in the way that best promotes the overarching purpose dictates of facilitating the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible: see s 37M of the Act.

26    Courts will not treat an application for leave to amend on the basis that a party is entitled to raise an arguable claim, subject to payment of costs by way of compensation. Instead, in exercising its discretion, the Court may take into account a number of factors which include:

(a)    the extent of any delay by the party in applying for the amendments, and whether a satisfactory explanation has been given for the delay;

(b)    the effects of any delay in applying for the amendment, including whether there will be substantial delay caused by the amendment, or if it will cause a trial date to be lost, thereby causing inefficiencies to the Court’s case management with consequential impacts on other litigants;

(c)    the stage in the litigation at which the amendment is sought, including for example, whether discovery is already well advanced or complete and whether a trial date has already been set;

(d)    the nature and the importance of the amendments, including whether they introduce a new and substantial cause of action;

(e)    whether the amendments will require a review of existing discovery or for more discovery to be necessary;

(f)    the extent of any wasted costs that will be incurred;

(g)    whether the amendments result in inordinate pressures upon a party, which cannot be adequately compensated for, whatever costs may be awarded;

(h)    that the new allegations give rise to a wide factual enquiry and relate to a distant period of time;

(i)    any prejudice that may be suffered, remembering that there is an irreparable element of unfair prejudice in unnecessarily delaying proceedings, and even corporations are subject to pressures imposed by litigation, and thereby may suffer prejudice (such as by having their resources diverted to deal with the litigation); and

(j)    the fact that a respondent is entitled to expect reasonable expedition in having allegations against it heard and determined.

27    The Court has power under s 33K of the Act to amend a group member definition in a representative proceeding. The Court’s power is discretionary, and must only be exercised, like the general power under s 33ZF of Act, where the interests of justice inform the exercise of that power.

Discussion of the 180 Amendment Application

28    For the sake of brevity and ease of comprehension, I will deal with the amendment applications largely by reference to the 180 Amendment Application. For convenience, I will adopt terms as defined in the pleadings.

29    In the 180 Proceedings, the applicants seek leave to amend the 180 2FAOA and 180 2FASOC in five respects:

(a)    adding a claim that 7-Eleven’s business model (‘Business Model’) constituted an unconscionable system of conduct within the meaning of s 21(4)(b) of the Australian Consumer Law (‘ACL’) (or unconscionable conduct generally, within the meaning of s 51AC of the Trade Practices Act 1974 (Cth) (‘TPA’)), or s 12CB(4)(b) of the Australian Securities and Investments Commission Act 2001 (Cth) (‘ASIC Act’) (‘Unconscionable System Case’);

(b)    supplementing the case already pleaded in the 180 2FASOC with further allegations and particulars as revealed to the applicants in the course of reviewing 7-Eleven’s discovery and preparing its lay evidence (‘Supplementary Amendments’);

(c)    extending the group member definition, which had previously been defined in the 180 2FASOC by reference to a period which concluded on the date on which these proceedings were originally commenced, to include those people who may have claims up to the date of filing the 180 3FAOA and 180 3FASOC;

(d)    formally casting matters pleaded in additional or amended paragraphs of the 3FASOC as common questions;

(e)    removing claims against the ANZ Bank in light of the settlement reached with it: see Davaria Pty Ltd v 7-Eleven Stores Pty Ltd [2020] FCA 1234.

30    In respect of (d), the proposed further common questions stand or fall together with the balance of the amendments. In respect of (e), the amendments to remove claims against the ANZ Bank were not opposed.

7-Eleven’s position

31    7-Eleven contend that the applicants should not be granted leave to amend the pleadings to introduce those aspects of the proposed 180 3FASOC that 7-Eleven opposes because:

(a)    First, with the exception of the removal of the claims against ANZ, and the introduction of the alternate ASIC relief, 7-Eleven is concerned at the scope of the new allegations made in the Proposed 3FASOC, including in terms of their inevitable disruption to the preparation of 7-Eleven’s lay evidence, the vacation of the trial date and the resulting increase in the length of the trial from six weeks to ten weeks. A new trial date is unlikely to be able scheduled until mid-April 2022 at the earliest.

(b)    Secondly, since the Proposed 3FASOC was provided, and following correspondence being sent by 7-Eleven, it has also emerged that the new claims being advanced by the applicants will also necessitate yet further discovery of new categories of documents and the revisiting of the existing already complete discovery (including because of the amendment of the definition of the “Relevant Period”).

(c)    Thirdly, allowing the proposed amendments will prejudice 7-Eleven because it will require 7-Eleven to revisit and amend its defence, engage in substantial new discovery, interview significant numbers of potential witnesses (occupying significant amount of the time of 7-Eleven’s senior management, various employees as well as the in-house counsel team), investigate and respond to the new evidence it would not otherwise need to respond to (including to investigate areas of factual enquiry, which relate to a distant period of time (as far back as 2005-2006)), and revisit forensic decisions made in relation to preparation of its evidence more generally (all further delaying the provision of 7-Eleven’s evidence), with the inevitable outcome that the trial date will not be maintained. In contrast, on the evidence before the Court, the refusal to allow the amendments would not prejudice the applicants or existing group members in any material way. All that would happen is that they would be required to go to trial with a case that they consciously and deliberately chose to advance after reviewing 7-Eleven’s discovery, and which the applicants were content to advance when the current trial date was set.

(d)    Finally, the proposed extension of the group member definition (to include franchisees which have only recently entered the 7-Eleven system) has been put forward without any real justification or explanation. The failure to provide such explanation should be fatal to the Court’s exercise of its discretion.

(Footnotes omitted.)

Supplementary Amendments

32    It is convenient to deal with the Supplementary Amendments first, as I consider they should be permitted.

33    The Supplementary Amendments have arisen by reason of the discovery provided by 7-Eleven and from matters revealed to the applicants in the course of preparing their lay evidence. These include the following allegations:

(a)    that 7-Eleven imposed on Franchisees a minimum acceptance rate for suggested orders to support 7-Eleven’s obligation to Metcash that it would ensure that its Franchisees acquire at least 90% of their goods from Metcash: 180 3FASOC [25(e)(iv)(1A)];

(b)    that 7-Eleven imposed on Franchisees a requirement to accept promotional products in excess of what was likely to be sold or able to be sold by Franchisees: 180 3FASOC [28(ba)-28(bc)];

(c)    that 7-Eleven has exercised its contractual right under clause 20(f)(iii) of the Franchise Agreements to charge Franchisees for stock not acquired from C-Store upon discovery of stock not accounted for during stock audits: 180 3FASOC [18(c)(iii)], [28(f)];

(d)    that 7-Eleven represented to incoming Franchisees that the goodwill of a Store was to be calculated in accordance with the Goodwill Price Advice (as pleaded at 180 2FASOC [40C]), now recast as the “Goodwill Formula”: 180 3FASOC [40C]-[40CA]);

(e)    that 7-Eleven represented to ANZ that the goodwill of a Store was to be calculated in accordance with a multiple of total income, consonant with the Goodwill Price Advice: 180 3FASOC [40CB];

(f)    clarifying that 7-Eleven provided Franchisees with one supplier for most stock items (C-Store) and only one supplier for all or substantially all of the balance (Daily Fresh): 180 3FASOC [75A];

(g)    that the Volume Pricing Representation was also made orally: 180 3FASOC [77(b)];

(h)    that 7-Eleven acknowledged the True Payroll Costs were greater than the payroll costs actually budgeted by Franchisees: 180 3FASOC [92(a)(ia), (ib), (ic)];

(i)    that 7-Eleven, by its own conduct, acknowledged that Store goodwill had been traded at prices far in excess of its true value, and set about a course that reduced the price of Store goodwill: 180 3FASOC [92(ba)], [92(c)], [92(da)]; and

(j)    that 7-Eleven’s conversion of existing franchised Stores into 7-Eleven operated corporate stores, reduced the price of, and allowed 7-Eleven to acquire at that lower price and coupled frequently with a release, the goodwill in existing franchised Stores: 180 3FASOC [92(ea)] and [93].

34    I do not think there was any dispute as to the basic facts relied upon by the applicants in seeking the Supplementary Amendments. I accept the factual contention made by the applicants that the discovered documents and evidence (at least those that are intended to be relied upon by the applicants at trial) directly give rise to a basis for the Supplementary Amendments that are sought to be made by the applicants. I also accept that any cost increase as a result of meeting the Supplementary Amendments would not be substantial in the context of these proceedings (as the Supplementary Amendments cover a substantial amount of work already undertaken by the parties).

35    The applicants provided the Court with a very useful schedule which cross-referenced the factual allegations in the applicants’ proposed new pleading (180 3FASOC) with the factual allegations in the existing pleading (180 2FASOC). I accept by a review of that document and the pleadings (existing and proposed) that these additional factual matters do not expand the scope of the matter such that they cannot be properly met by 7-Eleven prior to the trial date.

36    I accept that leave should be given to permit the Supplementary Amendments given that the purpose of those amendments would conform the pleadings to the proposed evidence: see, eg, Leotta v Public Transport Commission (NSW) (1976) 9 ALR 437 at 446 (Stephen, Mason and Jacobs JJ).

Unconscionable System Case

37    I now turn to the Unconscionable System Case, which in my view falls into an entirely different category. To allow the Unconscionable System Case would delay the trial date (which would then have been vacated twice) for many months, would place an unreasonable burden on 7-Eleven, would further burden the applicants in progressing the matter to trial for the benefit of the existing group members, would necessarily involve further discovery (mainly from 7-Eleven), and opens up a wide factual enquiry over a lengthy period (being the existing relevant period) without any real monetary relief advantage, which would then extend the hearing of the trial to many months not just ten weeks as now scheduled.

38    The Unconscionable System Case is that 7-Eleven engaged in a sequential species of conduct which, while individually actionable, also constituted a system or pattern that had the effect of inducing Franchisees to enter into the “7-Eleven System”. I should say at the outset that by adding this course of action the applicants are taking on a substantial burden on behalf of existing group members, the utility of which I am not persuaded. Whilst, as contended for by the applicants, a systems case may involve different issues of causation (and reliance), it is difficult to imagine the Unconscionable System Case adding any further entitlement to damages for an applicant or group member, or how, in a causation sense, it would entitle an applicant or group member to greater relief if he or she was successful in his or her individual claims. The applicants referred to Australian Competition and Consumer Commission v Australian Institute of Professional Education Pty Ltd (in liq) (No 4) [2020] FCA 1811, but that authority merely records the self-evident proposition that a “but for” causation enquiry will not be likely to involve a full evaluative assessment of the appropriate relief to be given in an unconscionable conduct systems case, and the salient question is whether the relevant impugned conduct was in some way sufficiently causally related to any loss sustained by the applicants: at [17] and [36]-[43] (Bromwich J). Causation is still required to be demonstrated on the balance of probabilities for the applicants and group members to obtain monetary relief in these proceedings. However, I have assumed in the applicants’ favour that the Unconscionable System Case is at least a tenable claim and provides a separate cause of action in addition to those currently permitted to proceed to trial.

39    The applicants seek to allege that, by the Business Model:

(a)    7-Eleven enticed prospective Franchisees into purchasing the goodwill of an existing Store and paying the associated Franchise Fee on the basis of inaccurate information (including inaccurate payroll information), the effect of which was to misrepresent the true profitability of the Store and the true value of the Store’s goodwill;

(b)    7-Eleven withheld from those prospective Franchisees information about the true profitability of a Store, including, principally, information concerning payroll costs, until those Franchisees were contractually committed to the outgoing Franchisee;

(c)    the profitability of Stores was further adversely impacted by:

(i)    7-Eleven’s C-Store Practices (as pleaded) and particularly 7-Eleven’s control exercised over the range and quantity of items available for sale in Stores and the price at which those items could be sold;

(ii)    7-Eleven’s Inventory Practices (as pleaded);

(iii)    7-Eleven’s control of the Open Account, including payment of the Weekly Draw;

               and,

(d)    Franchisees:

(i)    were required to contribute rebates applicable to Purchases, without being informed as to the amount or extent of that contribution either before or after entering into the Franchise Agreement;

(ii)    were forced to underpay wages or otherwise require that their principals and family members work for no or below Award wages in order to meet their essential financial obligations; and

(iii)    were unable, or are unlikely to be able, to recoup some or all of the capital outlaid in acquiring the franchise associated with their Stores.

40    The applicants submit that the Unconscionable System Case puts into proper context 7-Eleven’s control over the price of Store goodwill and the manner in which existing Franchisees were permitted (or frustrated from) selling their Stores. The Goodwill Price Advice, and its corollary the Goodwill Purchase Advice, are said to be elements of a system or model that induced prospective Franchisees into making franchise investment decisions premised on inaccurate information, the veracity of which 7-Eleven knew or ought to have known.

41    The Unconscionable System Case is also said by the applicants to highlight the significance of 7-Eleven’s C-Store Practices and Wholesale Pricing Conduct (as pleaded), 7-Eleven’s Inventory Practices (as pleaded) and 7-Eleven’s breach of its Accounting Obligation (as pleaded). It is submitted that the real mischief behind those practices is more than just a breach of the Franchise Agreement by 7-Eleven; they constituted levers by which 7-Eleven controlled Franchisees’ profitability, and the level of freedom Franchisees enjoyed, in operating their Stores.

42    The applicants finally submit that the Unconscionable System Case brings the pleadings into conformity with, and highlights, critical documents obtained on discovery and the applicants’ evidence.

43    It may well be that the basis of the allegations of the nature of 7-Eleven’s unconscionable conduct, and its cumulative effect on Franchisees (and particularly 7-Eleven’s stepping away from the previous goodwill model and imposing limitations upon Franchisees’ ability to sell their goodwill), only became obviously apparent to the applicants (and their solicitors) in the course of the preparation of the applicants’ evidence in chief and in reviewing material discovered by 7-Eleven. However, I do not accept that this was a matter that came out of the blue to the solicitors for the applicants just after this preparation and review. A great deal of investigation and interlocutory work had taken place by the applicants and their solicitors prior to that preparation and review, and the proceedings have been on foot since 20 February 2018. The applicants bear some responsibility in progressing their claims to trial. The existing group members are entitled to have their own claims resolved within the dictates of s 37M of the Act, which includes efficiency and expedition. The Court has a responsibility to look after the interests of existing group members when considering amendments to the pleadings and to the application for relief before the Court.

44    In respect of the submission that the proposed new allegations have already been known by 7-Eleven by way of the discovered material and witness statements, and the amendments will not overly burden 7-Eleven, I am prepared to accept this in respect of the Supplementary Amendments. As I have indicated, to allow those amendments arising from discovery or other material effectively allows the pleadings to conform with the anticipated way the matter will proceed to trial. However, I do not accept this is the end of the story in relation to the Unconscionable System Case, which gives rise to an entirely different situation.

45    It is convenient to refer to Unique International College Pty Ltd v Australian Competition and Consumer Commission (2018) 266 FCR 631 (‘Unique’) to explain this different position. That appeal concerned the unconscionability provisions in s 21 of the ACL, and in particular what the Australian Competition and Consumer Commission (‘ACCC’) was required to prove in order to make out a contravention of s 21(1) by the appellant, Unique, based on allegations of a “system of conduct or pattern of behaviour”, as that term is used in s 21(4)(b) of the ACL.

46    The Full Court (Allsop CJ, Middleton and Mortimer JJ) concluded that there was an insufficient evidentiary basis before the primary judge to support the findings that the appellant had engaged in a system of conduct or a pattern of behaviour in connection with the supply of online vocational education courses to consumers, and that the system or pattern of behaviour was unconscionable.

47    That conclusion as to the lack of evidentiary base for a system or pattern of behaviour case is to be contrasted with the primary judge’s finding, uncontested on appeal, that the appellant had engaged in unconscionable conduct in its dealings with a number of individuals.

48    The Full Court explained how a systems case is to be proved (at [104]):

The extension of s 21 by para (4)(b) to a “system of conduct or pattern of behaviour” which is unconscionable removes the necessity for revealed disadvantage to any particular individual. A “system” connotes an internal method of working, a “pattern” connotes the external observation of events. These words should not be glossed. How a system or a pattern is to be proved in any given case will depend on the circumstances. It can, however, be said that if one wishes to move from the particular event to some general proposition of a system it may be necessary for some conclusions to be drawn about the representative nature or character of the particular event. The notion of unconscionability is a fact-specific and context-driven application of relevant values by reference to the concept of conscience: see Paciocco v Australia and New Zealand Banking Group Ltd [2015] FCAFC 50; 236 FCR 199 and Commonwealth Bank of Australia v Kojic [2016] FCAFC 186; 249 FCR 421. It is an assessment of human conduct. A system of conduct requires, to a degree, an abstraction of a generalisation as to method or structure of working or of approaching something. If s 21(4)(b) is to be engaged, it is the system that is to be unconscionable. Nevertheless, the concept of unconscionability (even of a system) is a characterisation related to human conduct by reference to conscience, informed by values taken from the statute. As Cardozo J said (speaking for the Court) in Lowden v Northwestern National Bank & Trust Co 298 US 160 at 166 (1936) (albeit in a very different context): “A decision balancing the equities must await the exposure of a concrete situation with all its qualifying incidents. What we disclaim at the moment is a willingness to put the law into a straitjacket by subjecting it to a pronouncement of needless generality.” This expression of legal technique in the firmly gentle style of that great judge only reflects what other great judges of the tradition of Equity have said, such as in the passage of the judgment of Dixon CJ, McTiernan J and Kitto J in Jenyns v Public Curator (Qld) [1953] HCA 2; 90 CLR 113 at 119 adopting what Lord Stowell had said in The Juliana (1822) 2 Dods 504 at 522; 165 ER 1560 at 1567: “A court of equity….looks to every connected circumstance that ought to influence its determination upon the real justice of the case.” These expressions of legal technique should be recalled when the temptation arises to seek to re-define in short terms the words chosen by Parliament that require the application of general values to factual and contextual circumstance by reference to the notion of conscience.

49    The Full Court also drew attention to the position that an individual case and a systems case may require very different kinds of evidence:

[125]    Of course, these findings are specific to the proceeding in which they are made, and depend on the evidence in that proceeding. However, the comparison with the evidence before the primary judge in this case illustrates the difficulties we see with the ACCC’s approach in the present proceeding in three ways. First, in the present case, there was no analytical evidence at all of the kind in EDirect. Secondly, EDirect provides an illustration (and only an illustration, but nevertheless instructive) of how an individual consumer case and a system case may require very different kinds of evidence. Thirdly, even if there had been distinct analytical evidence, the approach taken by Reeves J in EDirect illustrates that the Court’s assessment of such evidence may well be a complex task, and the presence of such evidence is far from certain to discharge the ACCC’s burden of proof.

[126]    None of the above is to set the burden of proving a system case too highly. As we discuss below unconscionability is a serious issue to which the terms of s 140(2) of the Evidence Act 1995 (Cth) are relevant. Some assertions of unconscionability will be more serious than others. That is inevitable due to the fact- and context-specific evaluation that it is necessary to undertake by reference to the values recognised by the statute. Regard should also be had to the ability of a party to prove or disprove the existence or nature of any system: Blatch v Archer (1774) 1 Cowp 63; 98 ER 969.

50    Finally, the Full Court said (at [150]):

In conclusion, what the authorities demonstrate, unsurprisingly, is that the debate about whether or not a corporation or an individual has engaged in conduct that reveals a “system” or “pattern of behaviour” will be highly fact-specific, and will rely to a significant extent on the forensic exercise the regulator chooses to undertake to prove the existence of the system, as well as any forensic exercise the respondent undertakes by way of answer…

51    My intention in referring to Unique is to demonstrate the obvious point that an individual case is very different from a systems case, and that (relevantly here) 7-Eleven’s task in defending a systems case will be very different from that which it has confronted so far. It is a task that would be unfair and inappropriate to place upon it now. It would have the consequences on the trial, the existing group members and 7-Eleven that I have mentioned previously.

52    I do not accept the submission of the applicants that there would only be a marginal cost increase as a result of meeting the Unconscionable System Case which would not be substantial in the context of these proceedings, and would be outweighed by the significance of the Unconscionable System Case to the applicants’ claims.

Extension of group member class

53    The amendments in the 180 3FASOC also contemplate an extension of the group member class. Whereas the class as described in the 180 2FASOC limits members with claims between 20 February 2012 and 19 February 2018 (the latter date being the day before the proceedings were filed), the 180 3FASOC extends the cut-off date to the date of filing of the amended pleading.

54    The extension of the class by extension of the relevant period will have the effect of permitting any franchisee who has entered the 7-Eleven system after 19 February 2018 to also become a class member. The additional class members will have claims against 7-Eleven by reason of the existing and continuing breach of contract claims currently pleaded.

55    The applicants submit that the proposed extension of the class by extending the relevant period (and not by reference to any novel causes of action) is consistent with the policy of Pt IVA of the Act to avoid multiplicity of actions, and to provide a means by which, where there are many people who have claims against a defendant, those claims may be dealt with, consistently with the requirements of fairness and individual justice, together: Mobil Oil Australia Pty Ltd v State of Victoria (2002) 211 CLR 1 at [12] (Gleeson CJ). It was also submitted that an amendment to extend the class by extension of the relevant period is therefore consistent with the interests of judicial economy.

56    The applicants also say that the extension of the class is not expected to occasion any relevant prejudice in that the amendment to the description of the class does not change the scope of the evidence or the conduct of the proceedings.

57    However, a number of matters can be said against the applicants’ submissions. I do not see any proper explanation as to why the group member definition is only being expanded now nor as to the utility of the expansion of the group member definition. I also note that the substantive claims concern the effect of alleged widespread underpayment of wages of staff by franchisees, which was publicly disclosed in August 2015 and rectified by the pleaded Variation Agreement executed on or about December 2015. Thus, it is doubtful that the new putative group members (which total approximately 108 in the 180 Proceedings and 169 in the 182 Proceedings) will have claims of any substantive value.

58    Even putting all this aside, there are adverse consequential effects the amendment of the group definition has to ongoing case management, including evidence preparation and discovery. The consequential effect of expanding the group member definition is that the definition of the relevant period in relation to all claims is extended by almost three years. Based upon the evidence led by 7-Eleven, the expanding of the group member definition (and the definition of the relevant period) in this way will significantly expand 7-Eleven’s discovery and evidence obligations. 7-Eleven will need to expand the preparation of its responsive evidence to meet an extended definition of the relevant period.

59    I accept the evidence relied upon by 7-Eleven. This evidence details the effect of the expanded group definition on evidence preparation (making some allowance for the fact the systems case is not progressing). In respect of the existing discovery categories, in his affidavit of 10 December 2020, Mr Jones (the solicitor for 7-Eleven) deposes that of the 48 categories of original discovery (which was substantively completed in December 2019), the extended relevant period will likely apply to at least 28 of those categories. Further, of the 41 categories of further discovery arising from the 180 2FASOC (which was completed in August 2020), the extended relevant period will likely apply to at least 30 of those categories. Mr Jones deposes that, based on 7-Eleven’s experience completing the previous rounds of discovery, he considers it will not be possible to complete the revised discovery exercise before June 2021 and he expects the costs of the exercise to be at least half of the total discovery costs incurred to date, being approximately $2.0 million (excluding GST).

60    Not only will allowing the amendments improperly delay the trial of the claims of the existing group members, I am not satisfied that new group members have claims of such substantive value that those claims and the prosecution of them is in the interests of justice in the current proceedings. I am not persuaded there will be any material impact on the quantum of the damages the existing members will be entitled to without the proposed expansion of the relevant period. They will already be entitled to claim damages that cover future losses. The existing group members otherwise have a real interest in allowing their claims to proceed expeditiously this year. Then in circumstances where the proposed 3FASOC will have an obvious adverse impact on 7-Eleven’s evidence and trial preparation, which would make the existing trial date or an approximate trial date unachievable, the existing group definition should remain.

61    I make one other observation. Whilst not a perfect solution, this is a situation where the proposed new group members could commence another proceeding, which could take advantage of some interlocutory work done by the applicants (and their solicitors) in these proceedings. This new proceeding could then await the outcome of the current proceedings. In this way the existing group members could proceed to a trial now and the proposed new group members (if they do have a tenable claim) would be able to proceed to a trial expeditiously once the issues in the current proceedings are determined.

Conclusion

62    For the above reasons, I have decided to refuse leave to add the Unconscionable System Case and extend the group member definition, and to allow leave in respect of the Supplementary Amendments and removal of the ANZ Bank. Importantly, each of the allegations of fact now sought to be made at trial will be permitted to go forward on behalf of the applicants and existing group members; but not as a systems case.

Discussion of the 182 Amendment Application

63    In the 182 Proceedings, the applicants seek leave to amend the 182 2FAOA and 182 FASOC chiefly to conform to the proposed amendments to the pleadings in the 180 Proceedings. The amendments sought are to:

(a)    allege that the applicants in the 182 Proceedings suffered loss and damage by reason of the Unconscionable System Case as proposed to be pleaded in the 180 Proceedings;

(b)    conform the pleadings in the 182 Proceedings to the existing allegations of unconscionable conduct in the 180 Proceedings (as pleaded at [116] of the 180 2FASOC) (‘Existing Unconscionable Conduct Case’);

(c)    provide further particularity as to the basis upon which the applicants suffered loss and damage (‘Loss Counterfactuals’);

(d)    extend the group member definition to conform to the extended period as proposed to be pleaded in the 180 Proceedings; and

(e)    remove claims against the ANZ Bank.

64    For the same reasons that I have not allowed either the Unconscionable System Case or the extension of the group member definition in the 180 Proceedings, I will not allow these amendments to be made in the 182 Proceedings. I will allow leave for the pleadings to be amended to including the Existing Unconscionable Conduct Case, the Loss Counterfactuals and removal of the claims against the ANZ Bank.

ORAL DISCOVERY APPLICATION

65    The applicants seek to examine four individuals – Mr Jatin Dewan, Ms Emmaline McKenna, Mr Shane Radbone and Mr Alan Rodrigues (‘proposed examinees’). Each of Mr Dewan, Ms McKenna, Mr Radbone and Mr Rodrigues are former employees of 7-Eleven and subject to express contractual obligations of confidentiality. Mr Rodrigues was a director of a franchisee of 7-Eleven and owes 7-Eleven obligations of confidence too. I will refer to these respective obligations as the ‘confidentiality obligations’.

66    The application is made in the pre-trial context as part of the discovery process. The application is not for an order for the examination of a witness where testimony is to be given and employed at a later time. The interlocutory application is essentially for the gathering of information. No matter what form discovery may take, in this Court a party is not entitled to discovery as of right. Whether to order discovery (and its extent) is a matter for the exercise of the discretion of the Court.

67    It is to be noted that each of the proposed examinees has received a subpoena and produced virtually no documentation relevant to the topics upon which they sought to be examined.

68    In summary, 7-Eleven’s position is:

(a)    there is no power to order oral discovery; and

(b)    if the Court finds that there is power, it should not be exercised in this case as the applicants have failed to demonstrate the existence of the requisite “exceptional circumstances”. Granting the application would create a precedent capable of leading to a drastic change in the way civil litigation is conducted in this Court.

69    I accept that there is no property in a witness, so it is open to anyone to communicate with a witness, ask a witness for a witness’s account of what happened, and call a witness to give evidence: State of New South Wales v Jackson [2007] NSWCA 279 at [33] (Giles JA with whom Mason P and Beazley JA agreed).

70    The position before me is that there are witnesses who seem prepared to provide information relevant to issues in dispute, but who are constrained from doing so in some respects on account of confidentiality provisions in their previous employment contracts with 7-Eleven.

71    Each of the proposed examinees appears to be, or was until very recently, willing to give the information. I say “appears” because the proposed examinees, particularly one (Mr Dewan) may have some reservations about being involved in this dispute. I do not have any direct evidence that the proposed examinees actually desire to come to Court to offer relevant information.

72    At the outset, I note that it is obviously important (perhaps vital) that a party is not “in the dark” in preparing for trial, and to the extent possible, not required to call a witness “cold” without effective communication with that witness. However, the position confronting the applicants in these proceedings is not novel. In not dissimilar circumstances, Allsop CJ commented in Crown Resorts Limited v Zantran Pty Limited (2020) 374 ALR 739 (‘Zantran’) at 745 [23]:

The problem facing Zantran and those advising it was not novel. It involved and involves the enforceability (or not, as the case may be) of confidentiality clauses in the context of litigation in which one party to litigation seeks to obtain and then use information which another person has, whether that person is (as here) the other party, or a stranger, to the litigation. There have been a number of cases dealing with the issue.

73    Without calling in aid court processes, the solicitor for the applicants would need to be careful to observe confidentiality obligations when interviewing the proposed examinees. This has been a matter discussed in a number of cases. Nevertheless, it can hardly be said that the applicants are totally in the dark in view of the material they put forward in the applications before the Court (including the allegations in the pleadings themselves which I assume are made on a proper basis). It was made clear by senior counsel for the applicants that there is no suggestion the proceedings cannot proceed without the additional information that is expected (or hoped) to be gained by the oral discovery process. The purpose is to inform both parties of the strength of the applicants’ case. The purpose goes no higher than that in respect of these four proposed examinees.

74    It may be that additional information coming out ahead of a trial will increase the chance of an early resolution of the proceedings, which is desirable. However, in light of the material that is already in possession of the applicants, I do not regard (as best I can determine) the additional information that may be produced by these four proposed examinees as being likely to materially influence the mediation that is set down to occur prior to the trial.

75    Furthermore, it is not uncommon for witnesses to be “called cold”. Here, the potential witnesses in issue will presumably be ‘favourable’ to the applicants, and there are mechanisms a trial judge can employ to allow the applicants to introduce the evidence, such as for instance giving leave under the Evidence Act 1995 (Cth) for witnesses to be led in examination in chief.

76    Finally by way of introduction, I observe that the parties and their legal representatives have overarching obligations under the Act. Of course, those obligations do not apply to non-parties, in this case the proposed examinees. However, if the proposed examinees are willing to speak to the lawyers for the applicants, I would have thought that an arrangement could be made between the parties whereby the proposed examinees (subject to any undertaking concerning keeping the information obtained confidential) could be interviewed jointly with the parties and respective solicitors present. This would involve 7-Eleven giving a limited waiver of the confidential obligations imposed on those being interviewed. However, 7-Eleven may see some advantage in doing this to ascertain itself the information the proposed examinees may be able to provide. In this way, the information sought to be obtained could at least be known to each side, although the interview itself would not be able to be used in any way at the trial. This has an advantage of being non-adversarial, and avoids giving rise to the disruption I consider a formal process will bring to the progression of the proceedings to trial (to which I will return). Of course, this process could not be ordered to occur by the Court, and would involve the co-operation of the parties. In this regard, I note the comment of Allsop CJ in Zantran, when considering the availability of Court processes for obtaining information, that “[w]ithout intended disrespect to the parties by saying it, the Court expects the cooperation between the parties and the development of this narrative in a cost-effective manner”: at [9].

77    The other important matter to consider is the timing of this application for oral discovery.

78    As I have mentioned, the problem confronting the solicitors for the applicants is not novel. The issue and constraints arising from the need to observe confidentiality obligations when interviewing witnesses have been known for some time. The application is now brought at a time where it will be disruptive to the ordinary progression of the proceedings to trial (with the potential for interlocutory appeals), and the overall utility and significance of the process must be seen in view of all the other information currently available to the applicants. Put another way, the game is not worth the candle: it is not worth the time, money or effort required to have an oral discovery process of the type anticipated in the circumstances of these proceedings and at this time.

79    With these preliminary observations made, I will now turn to the question of power.

Power under s 46 of the Act

80    There was a great deal of attention given in the parties’ submissions to whether the Court has power to make oral discovery orders under s 46 of the Act. Section 46 provides:

46 Orders and commissions for examination of witnesses

The Court or a Judge may, for the purposes of any proceeding before it or him or her:

(a)    order the examination of a person upon oath or affirmation before the Court, a Judge, an officer of the Court or other person, at any place within Australia; or

(b)     order that a commission issue to a person, either within or beyond Australia, authorizing him or her to take the testimony on oath or affirmation of a person;

and the Court or a Judge may:

(c)     by the same or a subsequent order, give any necessary directions concerning the time, place and manner of the examination; and

(d)     empower any party to the proceeding to give in evidence in the proceeding the testimony so taken on such terms (if any) as the Court or Judge directs.

Note: Proceedings include incidental proceedings, such as discovery (see the definition of proceeding in section 4).

81    “Proceeding” is then defined in s 4 of the Act in the following terms:

proceeding means a proceeding in a court, whether between parties or not, and includes an incidental proceeding in the course of, or in connexion with, a proceeding, and also includes an appeal.

Example: Discovery is an example of an incidental proceeding.

82    In Jones v Treasury Wine Estates Limited (2016) 241 FCR 111 (‘Treasury Wine Estates’), in considering whether to permit a party to seek oral discovery orders in a foreign court, the Full Court (Gilmour, Foster and Beach JJ) briefly considered whether this Court had the power to make such orders. Their Honours noted that power likely existed in ss 23, 33ZF and 37P of the Act, but expressed doubt as to whether s 46 could be used for that purpose notwithstanding its apparent width.

83    Undoubtedly, the wording of s 46 is broad. As the note to the provision makes plain, “proceeding” includes any incidental proceedings, such as discovery.

84    I do not accept 7-Eleven’s contention that s 46 is limited to obtaining evidence for use at a later hearing (of a proceeding as yet undetermined). The natural reference point in s 46 is “for the purposes of any proceeding”, including discovery, rather than for the purposes of obtaining evidence to be used later in a proceeding. Any limitation on the otherwise unconfined word “purposes” in s 46 must arise from the objects and purposes of the Act read as a whole. So far as overarching objects of the Act are concerned, the just resolution of disputes lies at the heart of s 37M of the Act. It follows that any limitation on “purposes” in s 46 must be “the just resolution of disputes”. Given that there are potential witnesses who would provide relevant information but for the confidentiality obligations (and threat of litigation from 7-Eleven), an order for oral discovery of witnesses could be, in the appropriate circumstances, consonant with the just resolution of the issues in dispute in the proceedings.

85    7-Eleven submits that reference in the section heading to the “examination of witnesses”, supports such a reading. That is, s 46 is only concerned with the examination of witnesses for the purposes of testimony being given subsequently at hearing in the proceeding. I accept that the section heading is part of the Act and may therefore be taken into account when interpreting the provision: Acts Interpretation Act 1901 (Cth), s 13(1). Yet I am not persuaded that this adds much to 7-Eleven’s position.

86    In any event, I do not need to dwell upon s 46, whatever its ambit.

Power under ss 23, 33ZF and 37P of the Act

87    In Treasury Wine Estates, the Full Court observed that ss 23, 33ZF and 37P(2)-(3) of the Act are sufficiently broad to confer a power to order oral discovery in a manner analogous to depositions in the United States, although suggested that the power would likely only be exercised in exceptional circumstances. The Full Court observed:

[29]     We do not suggest that this Court does not theoretically have the power to order oral discovery of the US kind. Sections 23, 33ZF and 37P(2) and (3) of the [Act] are sufficiently broad to provide such a power. We doubt that s 46 of the [Act] could be used for that purpose notwithstanding its apparent width (see also r 29.11 of the Federal Court Rules). Further, s 7 of the Foreign Evidence Act 1994 (Cth) is dealing with a different context. But we do not need to elaborate further. Such a power was not sought to be invoked in the present case. Moreover, we doubt whether such a power would be exercised other than in a most exceptional case….

[…]

[34]    But as we have said earlier, we do consider that the Court now theoretically has the power to order oral depositions, albeit that it would only be exercised in an exceptional case…

88    Other single judges of this Court have expressed a similar view.

89    In Lavecky v Visa Inc [2017] FCA 454 at [13], Perram J, reflecting on Treasury Wine Estates, described the seeking of depositions as “a procedure alien to, but not beyond the power of, this Court’s ordinary processes”.

90    In Australian Security and Investments Commission v Australia and New Zealand Banking Group Ltd (2019) 139 ACSR 52 at [9], Allsop CJ referred to oral discovery as one of several options available to a party when interrogating the other party in the pre-trial context. The Chief Justice did not expressly consider the source of power for such an order.

91    The existence of the power was also contemplated by the Full Court in Zantran (at 759-760 [82] (Lee J with whom Allsop CJ and White J generally agreed)), and more recently in Commissioner of Taxation v Israel Discount Bank Limited [2020] FCAFC 71 (‘CoT v Israel Discount Bank’) at [16] (Lee J with whom Perram and Gleeson JJ agreed).

92    The applicants went so far to submit that these cases “squarely affirmed” the existence of the power. Whilst I agree that the power exists, I do not accept this submission of the applicants.

93    In Zantran, the Full Court considered whether the primary judge erred in making an order relieving certain persons from obligations of confidence for the limited purposes of, inter alia, conferring with the applicants’ legal representatives and providing witness statements. The appeal was allowed and, in explaining why the primary judge erred, the Full Court considered what other options were available to a party in the pre-trial context when wanting to obtain information from persons subject to contractual obligations of confidence. Justice Lee said that those options included an order for pre-trial discovery, expressly referring to ss 33ZF and 37P(2) of the Act as providing the source of power: at 759-760 [82]. Chief Justice Allsop agreed generally with Lee J’s reasons, but gave separate reasons in which his Honour said that a person seeking confidential information “may seek to have the court exercise procedural powers to require the third parties to divulge the information”: at 741 [7]. Justice White agreed generally with Lee J and specifically with Allsop CJ: at [64].

94    While there is no doubt that each member of the Full Court in Zantran was supportive of the proposition that this Court has power to order oral discovery, the case is not authority for that proposition. The Full Court in Zantran was not determining on the facts of the case before it whether there was a power to order oral discovery — the question at issue was different, namely, whether the primary judge had the power to relieve third parties from their contractual obligations for a limited purpose in the pre-trial context. Moreover, no member of the Full Court considered in a detailed way the basis for recognising the power to order oral discovery. Indeed, Lee J’s language is careful — his Honour refers to the Full Court in Treasury Wine Estates as having “adverted” to the “possibility” of such an order being made: at 759 [82].

95    The applicants refer also to CoT v Israel Discount Bank, but that decision does not advance matters very far. There, Lee J (with whom Perram and Gleeson JJ agreed) only referred to Zantran and, in particular, the statements concerning the power to order oral discovery, to illustrate the breadth of the Court’s powers. Accordingly, the applicants overstate the position by submitting that Zantran and CoT v Israel Discount Bank “squarely affirmed” the existence of the power.

96    Then in 7-Eleven’s submission, notwithstanding the aforementioned statements by judges of this Court that support (or at least suggest) the existence of a power to order oral discovery, this Court should hold there is no such power. As I have indicated, I do not accept that the Court does not have power to order oral discovery in the appropriate circumstances.

97    The statutory provisions relied upon in support of the existence of the power each confer a general power on the Court. In the case of s 23 of the Act, a general power to make orders of such a kind as the Court thinks appropriate. In the case of s 33ZF of the Act, a general power (in the context of Part IVA) to make any order that the Court thinks appropriate or necessary to ensure that justice is done. In the case of s 37P(2)-(3) of the Act, a general power to make directions about practice and procedure in civil proceedings.

98    It is true that none of the statutory provisions expressly provide for oral discovery. Each provision is broadly framed. However, as BMW Australia Ltd v Brewster; Westpac Banking Corporation v Lenthall (2019) 374 ALR 627 (‘BMW v Brewster’) makes clear, even broad powers have their limits. 7-Eleven submits there are two reasons (each of which might be described as a principle of statutory construction) why these general powers should not be construed as extending to oral discovery.

99    Firstly, 7-Eleven relies on the maxim generalia specialibus non derogant that, in the event of inconsistency, a specific provision will be preferred to a general provision: see Brisbane City Council v Amos (2019) 266 CLR 593 at [36] (Kiefel CJ and Edelman J). 7-Eleven says that there is an inconsistency between the specific provisions in Pt 20 of the Federal Court Rules 2011 (Cth) (‘Rules’) which set out a discovery process by reference to documents only, and the general powers in the Act (ss 23, 33ZF and 37P(2)-(3)), which confer a broad power on the Court to make orders and do not exclude an order for oral discovery. However, Pt 20 of the Rules merely sets out the documentary discovery process. It does not purport to prescribe or limit the Court’s powers to make discovery orders. I therefore do not accept that there is any inconsistency between these provisions, nor that this is a case where construing the general provisions in a particular way (to permit the making of orders for oral discovery) would detract from the specific provisions.

100    Secondly, 7-Eleven relies on the well-established principle of statutory interpretation that provisions are not to be construed as abrogating important common law rights, privileges and immunities in the absence of clear words or a necessary implication to that effect: see, eg, Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission (2002) 213 CLR 543 at 553 [11] (Gleeson CJ, Gaudron, Gummow and Hayne JJ). I accept that oral discovery is a compulsory process, and that the making of oral discovery orders would involve subjecting a third party to the Court’s compulsive processes in a very direct and substantial way. Yet in my view, the language in the general statutory powers is sufficiently clear. The provisions give the Court broad and general powers that plainly extend to the making of orders that may affect the rights of third parties (with appropriate protections if necessary).

101    I should just say something specifically about s 33ZF(1) of the Act.

102    The plurality (Kiefel CJ, Bell and Keane JJ) in BMW v Brewster emphasised that whilst the power provided by s 33ZF(1) is wide, it is essentially a supplementary or gap-filling power: at 638 [46], 643 [70]. As a supplementary source of power for Pt IVA of the Act, it is not to be supposed that s 33ZF(1) was intended to meet the exigencies of litigation not adverted to at all by the provisions of Part IVA. Therefore, s 33ZF(1) may not be “relied upon as a source of power to do work beyond that done by the specific provisions which the text and structure of the legislation show it was intended to supplement”. It “cannot be given a more expansive construction and a wider scope of operation than the other provisions of the scheme”, for to do so “would be to use… s 33ZF… as a vehicle to rewrite the scheme of the legislation”: at 643 [70]. Rather, s 33ZF(1) has the effect of “support[ing] any interlocutory procedural order necessary to ensure that the pleaded issues are resolved justly between the parties”: at 633 [21].

103    In considering BMW v Brewster, Beach J in Evans v Davantage Group Pty Ltd (No 2) [2020] FCA 473 made these observations about the scope of s 33ZF(1) of the Act:

[56]    First, s 33ZF(1) is a power only to be exercised in the context of how an action should proceed in order to do justice.

[57]    Second, s 33ZF(1) can be used “to support any interlocutory procedural order necessary to ensure that the pleaded issues are resolved justly between the parties” (at [21]) or “to bring the matter to a fair hearing on a just basis” (at [45] citing the words of Tamberlin J). But s 33ZF(1) “is essentially supplementary” or “gap-filling” notwithstanding that it is broad (at [46], [60], [69] and [70]). So, and importantly, it was in the context of those observations that it was said that s 33ZF(1) could be used to “ensure that the proceeding is brought fairly and effectively to a just outcome” (at [47], [50], [51] and [54]). The concept of “just outcome” was not to be decontextualised and read up to be looked at from the perspective only of the applicant and group members.

    (Emphasis in original.)

104    I respectfully agree with these observations. The granting of an order in the appropriate case for oral discovery (incorporating appropriate procedural protections) would be an interlocutory procedural order to bring the matter to a fair hearing on a just basis. Such an order under s 33ZF(1) of the Act would be within power.

105    Therefore, as I have indicated, I have no doubt that there is power to make the oral discovery order sought if it is appropriate to do so.

Is it appropriate to make oral discovery orders?

106    If there is any particular limit suggested by authority to the exercise of power to order oral discovery (other than acting judicially) the only limits on the Court’s discretion is that there be some exceptional circumstance (see Treasury Wine Estates at 116 [29], 117 [34]) and that the order be in accordance with the dictates of s 37M(3) of the Act.

107    I do not consider it is necessary for there to exist some exceptional circumstance before the Court may make an order for oral discovery. It is unwise to limit the exercise of a court’s discretion in matters of practice and procedure other than to insist the discretion be exercised judicially. The question is whether it is appropriate in all the circumstances to order oral discovery. In other words, it will depend on the individual judge’s assessment of what is fair and just to do in a particular case.

108    In any event, if exceptional circumstances need to be shown, I do not consider there to be exceptional circumstances that would support the exercise of the Court’s discretion in favour of ordering oral discovery, as will be clear from the approach I have taken in my reasons.

109    As indicated already, the proposed examinees were at relevant times a District Manager for 7-Eleven (Mr Dewan), a former employee (Ms McKenna), 7-Eleven’s former Chief Operating Officer (Mr Radbone) and a 7-Eleven former Victorian Portfolio Manager and former 7-Eleven Victorian Regional Manager (Mr Rodrigues). The proposed examination topics are set out in Schedule 1 to these reasons (‘Examination Topics’).

110    Subject to my earlier preliminary comments, I will proceed on the basis that each of the proposed examinees either remain willing, or recently expressed a willingness, to speak to the solicitors for the applicants in relation to matters relevant to these proceedings.

111    I also accept that while all proposed examinees either remain willing or were recently willing to speak to the applicants’ solicitors, they are likely to only do so if it would not cause them to be (actually or potentially) in breach of the confidential obligations owed to 7-Eleven.

112    One of the proposed examinees, Mr Dewan, is subject to a broadly expressed contractual obligation as to “Confidential Information”, which is defined to mean “any information about the business of 7-Eleven which is not in the public domain and includes, but is not limited to, any document, record, computer file, customer information, product or service information, know how, process, trade secret, marketing and sales and financial information” (‘Confidentiality Clause’). The clause provides:

13    CONFIDENTIAL INFORMATION

The Employee must at all time during, and after, employment with 7­Eleven keep all Confidential Information secret and confidential and must not use or disclose any Confidential Information except:

a)    as reasonably required in the ordinary and proper course of the Employee’s Employment with 7-Eleven;

b)    if the Employee is required by law to disclose the Confidential Information; or

c)    if the Employee has obtained the prior written consent of an authorised representative of 7-Eleven.

The Employee must take all reasonable and necessary precautions to maintain the confidentiality, and prevent the use and disclosure, of any Confidential Information.

The Employees obligations under this clause survive the termination of the Employee’s employment with 7-Eleven.

113    I will assume that each of the proposed examinees are subject to a similarly expressed Confidentiality Clause.

114    In Zantran, the relevant confidentiality clauses were set out by Lee J as follows:

[72]    Although the terms of any legal obligations of confidence were not then known, the evident caution of Mr Donnelly was sensible and commendable. As the primary judge later found, the contractual position between Crown and the employees differed, but relevantly contracts of employment (Employment Contracts) were entered into with 17 of the 19 employees and contained confidentiality provisions, although the contract of Mr Chen was on relevantly different terms. There was evidence, albeit partly secondary in form, as to the terms of these Employment Contracts. There was also evidence that all employees (other than Ms Jiang) entered into some form of further agreement with Crown (Finalisation Deeds). The confidentiality provisions in the common Employment Contracts (including Ms Jiang) relevantly provided:

12    Confidential information

You must not, without the prior written consent of [Crown], either during your employment with [Crown] or at any time after the termination of it:

(a)    divulge to any person other than any member of the Crown Limited group of companies (Group), or their respective officers and employees; or

(b)    use for your own benefit or the benefit of any person other than any member of the Group,

any confidential information about [Crown] or any Group Company or their respective businesses or affairs acquired during your employment….

For the purposes of this clause, confidential information shall not include any information:

(a)    which has become publicly known through no wrongful act by you or any third party;

(b)    which you have developed independently, as evidenced by appropriate documentation; and/or

(c)    which you are required to disclose by law or judicial process, provided that you shall notify [Crown] immediately of the same so as to provide or afford [Crown] the opportunity to obtain such protecting orders or other relief as the compelling court or other entity may grant and shall use your best efforts to assist [Crown] in seeking such protecting orders or other relief.

(emphasis added)

[73]    Similarly, to the extent they were revealed in the evidence, the confidentiality provisions of the Finalisation Deeds executed by the employees (but not Ms Jiang) provided:

4    Obligations of confidentiality

(a)    Each party must keep absolutely confidential the terms of this Deed and the discussions and negotiation of the terms of this Deed, except:

(i)    as required by law;

(ii)    with the express consent of the other party;

(iii)    for the purpose of obtaining confidential accounting or legal advice;

(iv)    for the purpose of enforcing this Deed; or

(v)    in the case of Crown, for Group reporting or disclosure purposes (including reporting within the Group or disclosure to a regulator of gaming or other operations of any member of the Group).

(emphasis added)

(Emphasis in original.)

115    It may be noted that the confidentiality provisions in the common Employment Contracts set out by Lee J which refer to “disclosure by law or judicial process” include that ‘exemption’ as part of the definition of confidential information. In the Finalisation Deeds the ‘exemption’ was “as required by law”, and is to be found in the operative part of the agreement, which is similar to the Confidentiality Clause in these proceedings. I have taken “required by law” to include where a person is directed by a judge in the course of a proceeding to answer a question that may disclose confidential information (as defined in the contract).

116    The applicants relied upon nine matters militating in favour of exercising the discretion for oral discovery of the proposed examinees, being:

(a)    there is doubt as to whether the Confidentiality Clause is enforceable by injunction at the suit of 7-Eleven to restrain the proposed examinees from speaking to the applicants in relation to issues in dispute in the proceedings;

(b)    7-Eleven would not suffer any unfair commercial prejudice if the proposed examinees give oral discovery on the Examination Topics conducted under the regime proposed by the applicants;

(c)    the information sought to be obtained from the proposed examinees concerns matters which, by their nature, are unlikely to be (and to the applicants’ best understanding, are not) recorded directly or methodically in documentary form;

(d)    this is a case where the Court would have ordered third party discovery and the burden of third party discovery is met in part by the applicants’ willingness to meet the proposed examinees’ reasonable costs of the examination;

(e)    the proposed examinees either remain willing or were until very recently willing to speak with the applicants about matters relevant to these proceedings;

(f)    there is a public interest in obtaining the information sought by the Examination Topics;

(g)    the proposed examination will not have any material adverse impact on the timetable to hearing and would instead save hearing time;

(h)    7-Eleven’s consent has been sought and has not been forthcoming; and

(i)    7-Eleven will not suffer any relevant forensic disadvantage by reason of the oral discovery being ordered.

117    By reference to the nine matters raised by the applicants I make the following comments in addition to the observations I have already made.

(a)    The fact there are doubts as to the enforceability of the Confidentiality Clause suggests it is better to deal with this issue at trial (if it is still relevant), when the validity and enforceability of the Confidentiality Clause can be properly assessed. The applicants maintain that the Confidentiality Clause is likely unenforceable because, if nothing else, it would constitute an unlawful restraint of trade in respect of potential utilisation of knowledge acquired by the proposed examinees in the course of their employment with 7-Eleven which they would seek to use for the purposes of subsequent employment. At trial, the Confidentiality Clause may in itself be valid, but the interests of justice may be such that the Court may direct the proposed examinees (if they give evidence) to answer questions despite the Confidentiality Clause or the existence of confidential information. In AG Australia Holdings Limited v Burton & Anor [2002] NSWSC 170, Campbell J made the following comments (at [129]):

There are well established limitations on obligations of confidentiality, being limitations which are established for the purpose of enabling the system of administration of justice to operate. Thus, at common law, a witness who is called to give evidence in court is not entitled, on the ground of owing an obligation of confidence alone, to decline to answer any relevant question which is permitted to be put (D v National Society for the Prevention to Children [1978] AC 171, at 218, 230, 237). If the confidential information also is the subject of a privilege recognised in the law of evidence which applies in the court before whom the person is called, it is that privilege, not the confidentiality, which provides a ground on which that person need not give the evidence.

It may be that when the proper time comes to consider the issue, to the extent that the Confidentiality Clause has the effect of concealing or obscuring unconscionable conduct on the part of 7-Eleven, the Court would not prevent a witness from disclosing information that might reveal the unconscionable conduct. In a ‘discovery’ exercise (not in the giving of evidence) to determine the validity of the Confidentiality Clause would be time consuming, and I think without any great utility. I cannot prevent ‘satellite litigation’ if 7-Eleven or the applicants want to raise the issue of invalidity: but I do not want to encourage such a process. If I am right that the oral discovery exercise would have little utility in reality (when considering all the information now available to the applicants) and at trial the potential witnesses will be able to give evidence despite the Confidentiality Clause, then no unfairness will arise, nor any interference with the administration of justice.

(b)    I agree that there would be no unfair commercial prejudice to 7-Eleven if the oral discovery took place as proposed by the applicants. The examination is proposed to take place before a Registrar of this Court (or a judge) and could take a form not dissimilar to that of examinations under s 596B of the Corporations Act 2001 (Cth) (‘CA’) (although this would need to be carefully considered as the process is not investigatory but is one confined, like all discovery, by relevance to the pleadings). 7-Eleven would have the opportunity to attend and object to any improper questions in line with practice and procedure that has developed around s 596B of the CA. Any commercially sensitive information disclosed in the course of the examination would be expected to be subject to the usual implied undertaking (if not express orders) as to the usage of that information. Part 29 of the Rules already provides for a procedure by which oral examinations of interested persons and depositions of their testimony might be taken on commission. The rules in Pt 29 could be adopted to the giving of oral discovery. For example, r 29.16 provides for the participation of both the applicants and 7-Eleven in the course of examination and r 29.18 provides for the making of objections by the examinee. There are, however, other considerations impacting on 7-Eleven, such as costs, resources and delay in the preparation for trial.

(c)    I agree that the topics sought to be canvassed with the proposed examinees concern matters that are unlikely to have been recorded in 7-Eleven’s documents because the matters sought to be canvassed may well reflect a series of largely unwritten practices acknowledged, implemented and enforced, by 7-Eleven’s District Managers and Regional Business Managers.

(d)    Even if third party discovery of documents would have been available, I do not regard this as a weighty consideration. The Examination Topics could possibly involve lengthy examination that will impose on the proposed examinees, who are third parties to the litigation, the obligation to answer questions as directed by the Court (even if they are merely allowed to come to Court and not coerced).

(e)    It is relevant that the proposed examinees appear to be willing to speak with the applicants about matters relevant to the proceedings. I have taken this into account. However, it is quite another thing to direct a person (even if they come voluntarily to Court) to answer specific questions in a discovery process. It is to be remembered the proposed examinees are not parties to the proceedings and are no longer in the employ of 7-Eleven. I mention one proposed examinee, Mr Dewan. He has only very recently stated he is anxious to protect his family and his current business interests, but would nonetheless speak truthfully about 7-Eleven if ordered to attend by court order. It was suggested by the applicants that, to the extent Mr Dewan’s withdrawal is motivated by fear of reprisal, a court order requiring him to give oral discovery would serve to exorcise those fears, and free his stated willingness to speak the truth if compelled to attend for examination. This can occur in a more orderly and efficient way at trial.

(f)    I agree there is a public interest in obtaining the information sought by the Examination Topics. As to wider public policy considerations, these proceedings concern the alleged breach by 7-Eleven of statutory obligations under the ACL, the ASIC Act, and the codes in Competition and Consumer (Industry Codes – Franchising) Regulation 2014 (Cth), Sch 1 and Trade Practices (Industry Codes – Franchising) Regulations 1998 (Cth), Sch, the Competition and Consumer (Industry Codes – Oilcode) Regulation 2006 (Cth), Sch 1 and the Competition and Consumer (Industry Codes – Oil) Regulations 2017 (Cth), Sch 1. Even if an order for oral discovery in itself would serve the public interest in potentially unmasking conduct proscribed by statute (which may or may not occur depending on how the process is conducted (in private or in public) and the extent of the ability to respond to the Examination Topics by the proposed examinees), this can be done in a proper and orderly manner by way of all the evidence at a public hearing. All persons who are likely to be able to give valuable evidence in relation to critical issues in dispute and are willing to do so (or even those who need to be subpoenaed), are not inhibited from doing so at trial.

(g)    I do not agree that the proposed examination will not have any material adverse impact on the timetable. There is no way the examination of each proposed examinee is unlikely to exceed two hours. The proposed Examination Topics could potentially give rise to lengthy questions, the issue of the Confidentiality Clause will arise, and the proposed examinees are lay persons unfamiliar with court processes. Even if the proposed examination will reduce the parties’ trial burden, it will increase the burden at the interlocutory stage and in my view will lead to lack of efficiency in the case management of these proceedings. It will divert attention from preparation for trial and will in all probability lead to unnecessary interlocutory appeals. I have already indicated that extra hearing time has been made available to deal with the issues that could possibly be raised in the oral discovery process.

(h)    The fact that 7-Eleven has not consented to the process and its obvious intention to rely upon the Confidentiality Clause is a factor that I take into account in determining that the oral discovery process is not appropriate and the trial is the appropriate time to consider the evidence and any objections to that evidence in context. I note that 7-Eleven so far has not pursued its foreshadowed application to bring proceedings to enforce the Confidentiality Clause against Mr Dewan by injunction. However, if oral discovery was ordered, the debate on this issue and whether to order, for instance, Mr Dewan to answer any particular question in the interests of justice would then arise in that process, leading to the inevitable disputation on that issue.

(i)    I do not agree that 7-Eleven will not suffer any relevant forensic disadvantage if oral discovery is ordered to be undertaken at this stage. I agree that answers given during the course of the proposed oral examination would not become evidence in the proceedings in which the examination has been ordered: see Pharm-a-Care Laboratories Pty Ltd v Commonwealth (No 2) [2010] FCA 187 at [4] (Flick J). 7-Eleven remains at liberty to object to information obtained from the examination that would otherwise be inadmissible at trial. However, as with the applicants, it diverts attention from preparing for a trial in August, it will inevitably lead to further disputation and will involve extra costs.

118    Finally, I draw attention to some of the comments made by Allsop CJ and Lee J in Zantran in speaking of a similar issue of case management and oral discovery.

119    In Zantran, Lee J suggested a number of options available for obtaining confidential information, but also indicated (as is clearly the case) that whether or not to order preliminary discovery is a matter for the docket judge to be considered in the context of the dictates of s 37M(3) of the Act. His Honour said (at [82]):

As is evident from both fundamental principle and the emphasised words of the relevant confidentiality provisions (see [72] and [73] above), nothing about the express obligations could prevent the Court, on application, invoking its compulsory power to compel disclosure by Crown or the employees of information relevant to Crown’s China Operations if it was otherwise thought to be necessary or appropriate. For example, Zantran may have been entitled to an order that Crown be required to provide written and verified answers to interrogatories under Pt 21 of the Federal Court Rules 2011 (Cth) relevant to Crown’s China Operations. Moreover, there was nothing preventing Zantran seeking an order under ss 33ZF or 37P(2) of the Act on the basis that it was appropriate in the interests of justice that an order be made requiring (or, perhaps more appropriately in the circumstances, allowing) some or all of the employees to attend the Court for the purposes of being examined in advance of the initial trial by adopting a form of deposition procedure before a Registrar or the docket judge. The possibility that such an order for pre-trial oral discovery directed to a third party could be made was adverted to by the Full Court (Gilmour, Foster and Beach JJ) in Jones v Treasury Wine Estates Limited [2016] FCAFC 59; (2016) 241 FCR 111 at 115 [24] after the Court referred to the “dramatic transformation” wrought by the introduction of Pt VB into the Act. This is not surprising, and the prospect of oral discovery is not new nor wholly unprecedented. It was discussed favourably in Chapter 10 of the Australian Law Reform Commission’s Report, Managing Discovery: Discovery of Documents in Federal Courts (Report No 115, March 2011). It might also be thought to have historical antecedents in the interrogating part of the equity bill for relief or bill of discovery developed by the Court of Chancery: see Pomeroy, N J, Equity Jurisprudence (3rd ed, 1905) at [83], [193] and [209]. If any such application had been made, it would be determined in accordance with the dictates of s 37M(3) of the Act which requires practice and procedure discretions to be exercised in a way which best promotes the overarching purpose: for a recent example see Australian Securities and Investments Commission v Australia and New Zealand Banking Group Limited [2019] FCA 1284 (Allsop CJ), where oral examination or oral discovery under the control of the Court was regarded as potentially appropriate.

120    Chief Justice Allsop in Zantran also referred to various options for obtaining confidential information (at [7]):

Where, as here, a third party to litigation is subject to apparent contractual restraint in communicating with one party to the litigation (Z), the benefit of which restraint is enjoyed by the other party to the litigation (Cr), Z may approach the matter in a number of ways. It may seek to have the Court exercise procedural powers to require the third party to divulge the information, notwithstanding, or even assuming, the validity or enforceability otherwise of the apparent contractual restraint. Or, it may, by some appropriately framed procedural vehicle seek to contest the validity or enforceability of the apparent contractual restraint. Such a course would require the holder of the benefit of the apparent contractual right (Cr) to seek to enforce it, or the party seeking access to the information (Z) to seek to have the apparent contractual right declared void or unenforceable. To the extent that Z was concerned as to the availability of sufficient material or evidence for the successful prosecution of such declaratory proceedings, the remedy of preliminary discovery may be available.

121    However, 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.

Conclusion

122    For the above reasons, I have decided to dismiss the Oral Discovery Application.

Associate:

Dated:    29 March 2021

Schedule 1

Proposed examination topics

1.    Any actual or alleged underpayment of wages, or non-compliance with legal obligations regarding payment of wages, by any franchisee of 7-Eleven Stores Pty Ltd (Franchisee) in the period from 1 July 2009 onwards.

2.    Payroll costs associated with the operation of a 7-Eleven Store.

3.    The pricing of goodwill associated with a 7-Eleven store.

4.    Any agreement (whether formal or informal) during the period from 20 February 2012 to 3 March 2020 (Relevant Period) to which agreement Metcash was a party and which involved or contemplated the provision of Rebates in respect of any goods supplied for sale at 7-Eleven stores and (Metcash Agreement).

5.    Any agreement (whether formal or informal), other than a Metcash Agreement, during the Relevant Period that involved or contemplated the provision of Rebates in respect of any goods supplied for sale at 7-Eleven stores by a supplier of such goods (Supplier Agreement).

6.    The application of Rebates (or monies received in respect of Rebates) towards advertising or marketing costs in relation to 7-Eleven stores or the 7-Eleven brand, the cost of goods sold at 7-Eleven stores, or otherwise.

7.    As to Jatin Dewan, communications with any of Jatinder Pal Singh, Suman Meet Kaur or Kaizenworld Pty Ltd (Lead Applicants) concerning:

(a)    the calculation or pricing of goodwill associated with 7-Eleven stores;

(b)    any actual or alleged underpayment of wages at any 7-Eleven stores;

(c)    Rebates; or

(d)    the ordering of goods for sale at a 7-Eleven store from C-Store.

In this schedule:

Metcash includes:

Metcash Trading Limited (ACN 000 031 569);

Metcash Food & Grocery Convenience Division Pty Limited (ACN 000 226 399);

Metcash Food & Grocery Pty Ltd (ACN 004 391 422);

Metcash Limited (ACN 112 073 480);

Metcash Export Services Pty Ltd (ACN 001 539 635);

Metcash Management Pty Limited (ACN 007 561 042);

Metcash Storage Pty Limited (ACN 007 870 162);

Metcash Services Proprietary Limited (ACN 114 987 996); and Metcash Holdings Pty Ltd (ACN 004 380 152).

Rebates means any discounts, allowances, rebates, incentives, commissions, bonuses, concessions, ullage or any other price reductions, adjustments or benefits in relation to merchandise or commission items supplied to 7-Eleven stores.