Davaria Pty Limited v 7-Eleven Stores Pty Ltd (No 10)
[2022] FCA 127
•15 February 2022
FEDERAL COURT OF AUSTRALIA
Davaria Pty Limited v 7-Eleven Stores Pty Ltd (No 10) [2022] FCA 127
File number(s): VID 180 of 2018
VID 182 of 2018Judgment of: O'CALLAGHAN J Date of judgment: 15 February 2022 Catchwords: PRACTICE AND PROCEDURE – whether a suppression or non‑publication order is necessary to prevent prejudice to the proper administration of justice
PRACTICE AND PROCEDURE – representative proceedings pursuant to Part IVA of Federal Court of Australia Act 1976 (Cth) – giving of further settlement notice pursuant to ss 33X and 33Y of the Act to group members of application for approval of a settlement under s 33V of the Act
Legislation: Federal Court of Australia Act 1976 (Cth) ss 33X, 33Y, 37AF, 37AG, 37AG(1)(a), 37AH, 37AH(2), 37AH(2)(d) Cases cited: Country Care Group Pty Ltd v Director of Public Prosecutions (Cth) (No 2) (2020) 275 FCR 377
Hogan v Australian Crime Commission (2010) 240 CLR 651
Mann v Carnell (1999) 201 CLR 1
Division: General Division Registry: Victoria National Practice Area: Commercial and Corporations Sub-area: Commercial Contracts, Banking, Finance and Insurance Number of paragraphs: 20 Date of hearing: 15 February 2022 Counsel for the Applicants: Mr D Pritchard SC with Mr P Tucker and Mr A Rizk Solicitor for the Applicants: Levitt Robinson Counsel for 7-Eleven Stores Pty Ltd: Mr R Craig QC with Mr A McRobert Solicitor for 7-Eleven Stores Pty Ltd: Norton Rose Fulbright Counsel for 7-Eleven Inc: 7-Eleven Inc did not appear Counsel for Galactic Seven Eleven Litigation Holdings LLC: Mr D Wong Solicitor for Galactic Seven Eleven Litigation Holdings LLC: Madison Marcus Contradictor: Mr J Redwood SC with Mr R Jameson Costs referee: Ms E Harris News publisher appearing pursuant to s 37AH(2)(d) of the Federal Court of Australia Act 1976 (Cth): Ms C Caulfield ORDERS
VID 180 of 2018 BETWEEN: DAVARIA PTY LIMITED (ACN 165 206 404)
First Applicant
KAIZENWORLD PTY LTD (ACN 163 833 565)
Second Applicant
AND: 7-ELEVEN STORES PTY LTD (ACN 005 299 427)
First Respondent
7-ELEVEN INC (A TEXAS CORPORATION)
Second Respondent
GALACTIC SEVEN ELEVEN LITIGATION HOLDINGS LLC
Third Respondent
ORDER MADE BY:
O'CALLAGHAN J
DATE OF ORDER:
15 FEBRUARY 2022
THE COURT ORDERS THAT:
Confidentiality
1.Pursuant to sections 37AF and 37AG(1)(a) of the Federal Court of Australia Act 1976 (Cth) (the Act), to prevent prejudice to the proper administration of justice the publication of each of the paragraphs identified in each of the items numerically listed in the Confidentiality Claims Schedule annexed hereto be limited to the persons and, or alternatively, subject to the limitation identified, in the Confidentiality Claims Schedule that is Annexure A to these orders (the Schedule).
2.Wherever group members are required to provide an undertaking as to confidentiality in order to gain access to any document to which they are permitted to have access, as identified in the final column of the Schedule, in respect of each document:
(a)Levitt Robinson will highlight the confidential parts of the document in yellow;
(b)access is to be granted to the documents via email request made to Levitt Robinson and on the provision of an undertaking to the following effect:
“By receiving this document you confirm that:
(i)you are a Group Member in proceedings VID180 of 2018 or VID182 of 2018 (7-Eleven Class Action proceedings) or represent such a group member as its authorised agent or in a professional capacity;
(ii)you undertake to the Applicants to keep the yellow highlighted content of the documents confidential;
(iii)you will not share the yellow highlighted content of these documents with, or disclose their content to, anyone else save for the purpose of obtaining or giving legal or financial advice and that if you do then you may be liable for damages suffered by the Applicants; and
(iv)you will inform any external lawyer instructed by you of the confidentiality obligations described in the paragraphs above.”
Notice to Group Members
3.Pursuant to sections 33X and 33Y of the Act, the Applicants have leave to distribute a notice of proposed settlement which adopts the text at Annexure B (Further Settlement Notice), in the manner set out in paragraph 4 below.
4.By 22 February 2022, for the purposes of sections 33X and 33Y of the Act, the Applicants shall:
(a)cause a copy of the Further Settlement Notice to be displayed on the Levitt Robinson website at the link
(b)cause a copy of the Further Settlement Notice to be issued by email or by post (where an active email address is not available or a bounce back message to a previously sent email has been received) to Group Members to the extent such details are available to the Applicants;
(c)arrange for an advertising campaign on the Facebook website (to run until 28 March 2022), which comprises:
(i)the logo of Levitt Robinson,
(ii)together with text within the image providing “Class Action Settlement Notice”,
and with further text below the image providing:
(iii)“Subject to court approval, the 7-Eleven Class Actions have settled. Read more in the Further Settlement Notice, which can be accessed at the following link”,
(iv)after which a link is inserted to the website
to reach an estimated audience of not less than 10,000 people targeted at persons who are located in Australia and match with at least one of the following interests:
(v)7-Eleven;
(vi)7-11 Seven Eleven;
(vii)Franchise;
(viii)Franchising or Store Manager;
(ix)Convenience Store;
(x)Convenience Food; and
(xi)Class Action.
5.By 22 February 2022, the District Registrar of the Victorian Registry of the Federal Court of Australia shall cause a copy of these orders, together with its Annexures, to be displayed on the Federal Court website at an address beginning and be available for inspection at the District Registry of the Federal Court in Melbourne, Sydney, Canberra, Brisbane and Perth.
Further submissions and evidence
6.The time specified in Order 5 of the Orders made on 16 November 2021 (being that by 4 pm on 4 February 2022 the Contradictor to file and serve any further written submissions in relation to the Applicants’ Amended Interlocutory Application filed 20 December 2021 and Galactic’s Interlocutory Application dated 22 October 2021 (together, the Applications)) be extended to 4 pm on 28 February 2022.
7.The time specified in Order 6 of the Orders made on 16 November 2021 (being that by 4 pm on 25 February 2022, the Applicants, Galactic and 7-Eleven Stores Pty Ltd file and serve any submissions in reply arising from the matters addressed in the further submissions of the Contradictor in relation to the Applications) be extended to 4 pm on 14 March 2022.
8.By 4 pm on 11 March 2022, the Contradictor is to file and serve any expert evidence in response to the expert evidence relied upon by Galactic Seven Eleven Litigation Holdings LLC (the Third Respondent).
9.On the provision of a confidentiality undertaking by any expert briefed by the Contradictor, the Confidential Affidavit of Fredrick Schulman sworn 1 February 2022 and Confidential Exhibit FS-2 be provided to that expert.
Objections to evidence
10.By 4 pm on 16 March 2022, each party and the Contradictor give notice identifying any parts of the affidavits of the other party to which it intends to object at the hearing of the Applications, with a brief statement identifying in each case the reason for the objection.
11.By 4 pm on 23 March 2022, the parties and the Contradictor are to:
(a)confer by their counsel in relation to the parties’ notices of objections pursuant to Order 4 and endeavour to resolve the parties’ and the Contradictor’s respective objections to evidence; and
(b)file and serve a document reflecting their respective positions in relation to the other party’s objections to evidence).
12.Orders 8 and 9 of the Orders made on 7 December 2021 be vacated.
Other
13.The parties and the Contradictor have liberty to apply on 3 business days’ notice, specifying the relief sought.
14.Costs of the Applicants’ Amended Interlocutory Application dated 17 December 2021 be reserved.
15.The matter be listed for case management on 15 March 2022 at 9:30 am.
16.By 14 March 2022, the Applicants are to provide to the Respondents and the Contradictor a draft Court Book index of all interlocutory applications, submissions and evidence to be relied upon by all parties at the Approval Hearing.
17.By 15 March 2022, the Respondents and the Contradictor are to provide the Applicants with any amendments to the draft Court Book index.
18.By 16 March 2022, the Applicants are to:
(a)provide an electronic (redacted) copy of the Court Book to the First Respondent; and
(b)provide an electronic (unredacted) copy of the Court Book to the Contradictor, Galactic, the Costs Referee and the Associate to the Honourable Justice O’Callaghan.
Note:Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Annexure A
| # | Evidence / Submissions / Document | Date | Document/Section over which confidentiality claimed by the Applicants | Against whom | Document Accessible to Group Members? |
| 1. | Confidential Affidavit of Brett Imlay (23.08.21) | 23 August 2021 | Exhibit BRI-44 pp6-70 Class Action Settlement Deed dated 4 August 2021 | Generally, but not against 7-Eleven or ANZ | Yes, upon undertaking to maintain confidentiality |
| 2. | Confidential Affidavit of Brett Imlay (23.08.21) | 23 August 2021 | Exhibit BRI-44 pp71-87 Deed of Settlement between Davaria Parties, ANZ and 7-Eleven | Generally, but not against 7-Eleven or ANZ | Yes, upon undertaking to maintain confidentiality |
| 3. | Confidential Affidavit of Brett Imlay (23.08.21) | 23 August 2021 | Exhibit BRI-44 pp88-103 Deed of Settlement between Kaizenworld Parties, ANZ and 7-Eleven | Generally, but not against 7-Eleven or ANZ | Yes, upon undertaking to maintain confidentiality |
| 4. | Confidential Affidavit of Brett Imlay (23.08.21) | 23 August 2021 | Exhibit BRI-44 pp104-114 and 115-125 Heads of Agreement between Davaria parties and Galactic | Generally, but not against 7-Eleven | Yes, upon undertaking to maintain confidentiality |
| 5. | Confidential Affidavit of Brett Imlay (23.08.21) | 23 August 2021 | Exhibit BRI-44 pp126-131 Variation to Heads of Agreement between Davaria parties and Galactic | Generally, but not against 7-Eleven | Yes, upon undertaking to maintain confidentiality |
| 6. | Confidential Affidavit of Brett Imlay (23.08.21) | 23 August 2021 | Exhibit BRI-44 pp 132-140 and 141-149 Heads of Agreement between Kaizenworld parties and Galactic | Generally, but not against 7-Eleven | Yes, upon undertaking to maintain confidentiality |
| 7. | Confidential Affidavit of Brett Imlay (23.08.21) Affidavit of Brett Imlay (6.10.21) | 23 August 2021 6 October 2021 | Exhibit BRI-44 pp 150-179; Exhibit BRI-46 pp 60-96 Settlement Scheme | Generally, but not against 7-Eleven or ANZ | Yes, upon undertaking to maintain confidentiality |
| 7A. | Affidavit of Brett Imlay (6.10.21) | [82] and p136 Exhibit BRI-46 and [91] and p139 Exhibit BRI-46 | Generally, but not against 7-Eleven | No | |
| 8. | Affidavit of Brett Imlay (6.10.21) | 6 October 2021 | [134] – [136] Exhibit BRI-47 pp172-176 | Generally, including 7-Eleven | No |
| 9. | Affidavit of Brett Imlay (6.10.21) | 6 October 2021 | [137]-[177] and Exhibit BRI-47 pp177-238 | Generally, including 7-Eleven | No |
| 10A. | Affidavit of Brett Imlay (13.10.21) | 13 October 2021 | [15] and Exhibit BRI-48 p38; [19] and Exhibit BRI-48 p39; the entirety of the parenthesised part of [20] of affidavit of 13.10.21 | Generally, but not against 7-Eleven | No |
| 11. | Affidavit of Brett Imlay (13.10.21) | 13 October 2021 | [26]-[28] | Generally, but not against 7-Eleven or ANZ | Yes, upon undertaking to maintain confidentiality |
| 12. | Affidavit of Brett Imlay (13.10.21) | 13 October 2021 | [35] (all but first sentence), [36], [37] (figure of $107,671.17), [40] (figures of $210,252.17 and $107,671.17) | Generally, but not against 7-Eleven or ANZ | Yes, upon undertaking to maintain confidentiality |
| 14. | Affidavit of Brett Imlay | 14 October 2021 | Whole – Affidavit exhibits Counsel’s Confidential Opinion | Generally, including 7-Eleven | No |
| 15. | Affidavit of Brett Imlay | 20 October 2021 | Whole – Affidavit exhibits Counsel’s Expanded Confidential Opinion and summarises advices provided by Counsel for the Applicants during the proceedings | Generally, including 7-Eleven | No |
| 17. | Affidavit of Jem Punthakey (3.11.21) | 3 November 2021 | [43], [46], [53], [54], [59], [66] (except for first sentence); confidentiality claim no longer maintained in respect of balance of [66]-[68] | Generally, including 7-Eleven | No |
| 18. | Affidavit of Elizabeth Harris | 12 November 2021 | The following parts of the exhibited report dated 12 November 2021: [29]-[50]; [194], Table at [212] (part), [216]-[219], [222]-[225]. | Generally, including 7-Eleven | Yes, upon undertaking to maintain confidentiality |
| 18A. | Affidavit of Elizabeth Harris | 12 November 2021 | Table at [124] | Generally, including 7-Eleven | Yes, upon undertaking to maintain confidentiality |
| 18B. | Report of Elizabeth Harris | 28 January 2022 | [35] (part) first sentence words after “raised”; [46]-[48]; [49] first and second sentences only; [54] first sentence only; [71] third sentence only; [72]; [73] second sentence words following “costs,” to end of sentence; [86], fourth sentence; [89] first and second sentences only; [99] | Generally, including 7-Eleven | Yes, upon undertaking to maintain confidentiality |
| 21. | Contradictor’s Preliminary Outline of Submissions dated 12 November 2021 | 12 November 2021 | [62], fn 36, words in [65(b)] up to but not including “we submit” | Generally, including 7-Eleven | No |
| 22. | Contradictor’s Preliminary Outline of Submissions dated 12 November 2021 | 12 November 2021 | [65]-[67] in their entirety incl fn 42, 43 | Generally, but not as against 7-Eleven or ANZ, save for [65(b)] (up to but not including “we submit”), | Yes, upon undertaking to maintain confidentiality, but excluding matter the subject of legal professional privilege in respect of [65(b)] |
| 23. | Contradictor’s Preliminary Outline of Submissions dated 12 November 2021 | 12 November 2021 | [68]-[69] incl fn 44-46 | Generally, but not against 7-Eleven (as per item 4 above) | No |
| 24. | Contradictor’s Preliminary Outline of Submissions dated 12 November 2021 | 12 November 2021 | [73] (words between “The” and “study” in the first line), [75], part of each of [77], [78] and [80], fn 56, 57, 59, 60 | Generally, including 7-Eleven | No |
| 29. | Affidavit of Brett Imlay | 17 December 2021 | [8], [12]-[14] | Generally , excluding 7-Eleven and ANZ | No |
| 30. | Affidavit of Brett Imlay | 17 December 2021 | [9]-[10] | Generally except against ANZ | No |
| 31. | Affidavit of Brett Imlay | 17 December 2021 | [11] | Generally except against ANZ | No |
| 32. | Affidavit of Brett Imlay | 17 December 2021 | [16]-[17] | Generally, except against 7-Eleven and ANZ | No |
| 32A. | Affidavit of Brett Imlay | 17 December 2021 | BRI-52 pp 67-74 and 75-82 referred to at [17] | Generally, except against ANZ | No |
| 33. | Affidavit of Brett Imlay | 17 December 2021 | [19]-[26], [29]-[32] | Generally | No |
| 37. | Affidavit of Fredrick Schulman | 1 February 2022 | [57], [71], 72] | Generally, but not against 7-Eleven | Yes, upon undertaking to maintain confidentiality |
| 39. | Contradictor’s Submissions | 7 February 2022 | Second sentence in [57] | Generally, except against 7-Eleven and ANZ | No |
| 40. | Contradictor’s Submissions | 7 February 2022 | 58(b) words following “7-Eleven” in second line to end of paragraph. 58(c) words following “7-Eleven” in second line to end of paragraph. | Generally, but not against 7-Eleven or ANZ | Yes, upon undertaking to maintain confidentiality |
| 41. | Contradictor’s Submissions | 7 February 2022 | 58(d) and 58(e) - whole. | Generally, but not against 7-Eleven or ANZ | Yes, upon undertaking to maintain confidentiality |
Annexure B
FEDERAL COURT OF AUSTRALIA
FURTHER SETTLEMENT NOTICE
VID180/2018
Davaria Pty Ltd and Kaizenworld Pty Ltd v 7-Eleven Stores Pty Ltd and Ors
VID182/2018
Pareshkumar Davaria and Ors v 7-Eleven Stores Pty Ltd & Anor
Why is this notice important?
1.The Federal Court of Australia has ordered that this notice be published. Any questions you have concerning the matters contained in this notice should not be directed to the Court. You should contact Levitt Robinson at [email protected] or seek your own legal advice if there is anything in this notice that you do not understand.
2.On 4 August 2021, the Applicants and 7-Eleven Stores Pty Ltd (7-Eleven) executed a deed of settlement in relation to two class actions against 7-Eleven (the Class Actions) that provides that 7-Eleven will pay $98 million (Settlement Sum) inclusive of legal fees, disbursements, interest and funding commission in settlement of the Class Actions (Proposed Settlement).
3.On 19 September 2021, a Settlement Notice was distributed which contained important information about the Proposed Settlement (First Notice). The First Notice can be downloaded from
4.This Further Settlement Notice provides updated and further information about the Proposed Settlement and must be read in conjunction with the First Notice.
5.The Proposed Settlement is subject to Court approval. Approval applications have been filed by the Applicants in the Class Actions (Approval Applications).
6.Galactic Seven Eleven Litigation Holdings LLC (the Funder) provided funding to the Applicants for the Class Actions. The Funder has filed applications for a “Common Fund Order” seeking a funding commission of 25% of the Settlement Sum (being, $24.5 million), to be paid to the Funder before any distribution of the balance of the Settlement Sum to group members (CFO Applications). Please refer to paragraphs 11 to 20 below for further detail.
7.The Approval Applications and the CFO Applications can be downloaded from
8.The hearing of the Approval Applications and CFO Applications was previously scheduled to occur on 16 November 2021, but will now be heard at the Federal Court of Australia, at 305 William Street in Melbourne or Level 17 Law Courts Building 184 Phillip St Queens Square in Sydney and via audio-visual link on 28 to 30 March 2022 at 10:15 am (Approval Hearing).
9.If you and your company have opted out of the Class Actions, you may disregard this notice.
10.If you are a VID180 Group Member or a VID182 Group Member (as defined in the First Notice), you have a right to object to the Proposed Settlement and/or the payment out of the Proposed Settlement of $24.5 million to the Funder.
Common Fund Order vs Funding Equalisation Order
Common Fund Order
11.A Common Fund Order is an order of the Court that provides for the Funder to receive a percentage of the Settlement Sum that the Court considers to be fair and reasonable, which is deducted from the Settlement Sum before distribution to group members.
12.As noted above, the Funder has made the CFO Applications, seeking a funding commission of 25% of the Settlement Sum ($24.5 million) to be paid to the Funder before any distribution of the balance of the Settlement Sum to group members.
13.The Contradictor has been appointed to represent the interests of group members on the Approval Applications and the CFO Applications. The Contradictor is opposing the CFO Applications because he contends that the Court does not have the power to make a CFO and that a CFO in the amount sought is not fair and reasonable.
14.In dealing with the CFO Applications, the Court may:
(a)make a Common Fund Order with a funding commission of 25% of the Settlement Sum;
(b)make a Common Fund Order, but with funding of commission lower than 25% of the Settlement Sum or some other funding payment; or
(c)decline to make a Common Fund Order.
Funding Equalisation Order
15.If the Court does not make a Common Fund Order, the Funder may assert its contractual rights under the funding agreements executed by some group members, and if so, the Applicants will seek a Funding Equalisation Order.
16.A Funding Equalisation Order is an order of the Court that requires the “unfunded group members” (being, those who have not signed a funding agreement with the Funder) to contribute equally to the commission that “funded group members” (being, those who have signed a funding agreement with the Funder) have agreed to pay the Funder under their funding agreements. This means that all group members, both funded and unfunded, will contribute equally to the commission that funded group members have agreed to pay to the Funder.
17.Approximately 37% of the stores of all group members (not including stores formerly operated by deregistered companies or stores operated or formerly operated by group members who have signed releases with 7-Eleven) are stores of funded group members.
18.Approximately 40% of the stores of all VID180 group members which have non-zero weighted claims (not including stores formerly operated by deregistered companies or stores operated or formerly operated by group members who have signed releases with 7-Eleven) are stores of funded group members.
19.Under the funding agreements signed by funded group members, the Funder is entitled to 35% of each funded group member’s compensation entitlement under the Settlement Scheme (as described at [60]-[61] of the First Notice).
20.If a Funding Equalisation Order were to be made, the Funder could be entitled to a payment of approximately $12 to $16 million from the Settlement Sum, compared to the $24.5 million sought by the Funder under a Common Fund Order. This figure may increase or decrease, depending on the number of group members who lodge claims under the Proposed Scheme and the value of the claims of the funded group members.
Benefits obtained by the Applicants
21.The Applicants will receive the following benefits in connection with the Proposed Settlement additional to any compensation they and group members are to receive under the Settlement Scheme:
(a)The Applicants will receive a payment from 7-Eleven for the early surrender of their franchises, and the franchising arrangement between 7-Eleven and each of the Applicants will come to an end;
(b)The Applicants have received monies from the Funder for their time and inconvenience during the course of these proceedings. The Applicants may receive further monies in that regard, by order of the Court (see [32(d)] of the First Settlement Notice); and
(c)Each of the Applicants have reached agreement with ANZ to settle their individual claims with the ANZ Bank (previously a respondent to the Class Actions), and have also negotiated reductions in their personal debts with the ANZ Bank. The Applicants were not able to and did not negotiate as representatives of group members with the ANZ Bank. Those negotiations were personal to the Applicants and intended to effect the exit of the Applicants from their banking relationship with ANZ. For that reason, the Applicants’ settlements with ANZ are confidential and do not involve any claims that other group members may have against ANZ.
22.Copies of the Deeds of Settlement entered into by the Applicants with ANZ and Heads of Agreement entered into by the Applicants with Galactic regarding their ANZ loans, and the Deeds of Settlement entered into between the Applicants and 7-Eleven regarding the termination of their franchise agreements, may be obtained by downloading them from (and, on agreeing to keep the contents of the Deeds of Settlement and the Heads of Agreement confidential, Levitt Robinson will provide verified group members with a passcode).
Update to number of Group Members
23.The numbers provided at [15]-[16] of the First Notice have been updated below and broken down into sub-categories of group members with varying allocated entitlements under the Proposed Settlement. The allocations (expressed as percentage weightings of their VID180 Loss Claims, VID180 Rebates Claims and VID182 Claims) are explained further below.
VID180 Class Action
24.At [15] of the First Notice it is stated that after the opt out process which took place in 2020 in the VID180 Class Action (as defined in the First Notice), approximately 808 stores (not including the three stores operated by the VID180 Applicants (as defined in the First Notice)) and approximately 676 VID180 Group Members (not including the VID180 Applicants and as defined in the First Notice) remain. That number is now estimated to be 809 stores, or 812 stores including the VID180 Applicants. Of those 812 stores:
(a)approximately 164 are stores that were operated by companies that are now deregistered, which means those companies do not exist and cannot make a claim unless reinstated, leaving 647 stores; and
(b)approximately 157 of the remaining stores are stores that are or were operated by companies that have executed releases with 7-Eleven, which means that those companies will likely have no entitlement under the Proposed Settlement unless the Independent Counsel (as defined in the First Notice) determines that the individual group member’s release is ineffective (this process is summarised at [25]-[26] of the First Notice).
25.This leaves an estimated 490 stores that may be the subject of claims by VID180 Group Members in the Proposed Settlement (unless some of the companies are reinstated or some of the releases are determined ineffective, in which case the number of remaining stores will be more than 490). Out of those stores, under the Proposed Settlement:
(a)the VID180 Loss Claims of franchisee operators who entered into a Franchise Agreement on or after 21 February 2012 and before 1 October 2015 (being claims in relation to approximately 145 stores) would have a weighting of 100% (as set out at [45] of the First Notice);
(b)the VID180 Loss Claims of franchisee operators who:
(i)entered into a Franchise Agreement before 21 February 2012 and sold or disposed of the franchise after 1 October 2015; or
(ii)entered into a Franchise Agreement before 21 February 2012 and still operate the franchise; or
(iii)entered into a Franchise Agreement after 21 February 2012 and sold or disposed of the franchise before 1 October 2015,
being claims in relation to approximately 178 stores, would have a weighting of 33.3% (as set out at [46]-[47] of the First Notice);
(c)the VID180 Loss Claims of franchisee operators who:
(i)entered into a Franchise Agreement before 21 February 2012 and sold or disposed of the franchise before 1 October 2015; or
(ii)entered into a Franchise Agreement after 1 October 2015,
being claims in relation to approximately 167 stores, would have a weighting of zero (0) (as set out at [49] of the First Notice); and
(d)the VID180 Group Members of all 490 stores are eligible to share in the distribution of the VID180 Rebates Claims (as set out at [41(a)] of the First Notice).
VID182 Class Action
26.At [16] of the First Notice it is stated that after the opt out process which took place in 2020 in the VID182 Class Action (as defined in the First Notice), there were approximately 1,234 VID182 Group Members (not including the VID182 Applicants and as defined in the First Notice). That number is now estimated to be 1,228. Of those 1,228 VID182 Group Members, there are 1,583 “VID182 Claims”, as some VID182 Group Members are connected with more than one store and therefore have more than one claim.
27.Of those 1,583 VID182 Claims, there are approximately 246 that have executed releases with 7-Eleven, which means that those group members will likely have no entitlement under the Proposed Settlement unless the Independent Counsel determines that the individual group member’s release is ineffective (as summarised at [25]-[26] of the First Notice).
28.That leaves 1,337 VID182 Claims (unless some of the releases are ineffective, in which case the number of remaining VID182 Claims will be more than 1,337). Of those VID182 Claims, under the Proposed Settlement:
(a)the VID182 Claims of directors or guarantors:
(i)under a Franchise Agreement entered into on or after 21 February 2012 and before 1 February 2015; or
(ii)who became guarantors under an ANZ loan contract on or after 21 February 2012 and before 1 October 2015;
and where either:
(A)the 7-Eleven store franchise the subject of the Franchise Agreement was disposed of after 1 October 2015; or
(B)the Franchisee still retains the franchise,
being, approximately 347 claims, would have a weighting of 100% (as set out at [54] of the First Notice);
(b)the VID182 Claims of:
(i)Directors or guarantors under a Franchise Agreement entered before 21 February 2012, or who became guarantors under an ANZ loan contract before 21 February 2012, and where either:
(A)the 7-Eleven store franchise the subject of the Franchise Agreement was disposed of after 1 October 2015; or
(B)the Franchisee still retains that Franchise;
or,
(ii)Directors or guarantors under a Franchise Agreement entered on or after 21 February 2012, or who became guarantors under an ANZ loan contract on or after 21 February 2021, and where the 7-Eleven store franchise the subject of the Franchise Agreement was disposed of before 1 October 2015,
being, approximately 446 claims, would have a weighting of 33.3% (as set out at [55]-[56] of the First Notice); and
(c)the VID182 Claims of:
(i)Directors or guarantors under a Franchise Agreement entered before 21 February 2012, or who become guarantors under an ANZ loan contract before 21 February 2012, and where the 7-Eleven store franchise the subject of the Franchise Agreement was disposed of before 1 October 2015; or
(ii)Directors or guarantors under a Franchise Agreement that was entered into after 1 October 2015 or who became guarantors under an ANZ loan contract after 1 October 2015,
being approximately 544 claims, would have a weighting of zero (0) (as set out at [57] of the First Notice).
Update as to costs in relation to Approval Applications and Administration of the Settlement Scheme
29.At [32(f)] of the First Notice, the Applicants’ legal costs and disbursements sought to be deducted from the Settlement Sum included an estimated $487,470 in relation to approval of the Settlement.
30.As at 1 December 2021, the costs incurred by the Applicants in relation to the Approval Applications were in excess of $900,000 plus GST. The entirety of the costs that the Applicants will incur in association with the Approval Applications is now anticipated to exceed $1.25 million plus GST.
31.At [32(f)] of the First Notice, the Applicants’ legal costs and disbursements sought to be deducted from the Settlement Sum included an estimated $1.1 million in relation to the administration of the Settlement Scheme. That estimate is now $1,310,746.
32.The reasonableness of the costs that the Applicants have and will incur in relation to the Settlement Applications will be the subject of a report by the Referee appointed by the Court (see [67(b)(ii)] of the First Notice).
Why are you getting this notice
33.You have a right to object to the Proposed Settlement and/or the payment of a CFO of $24.5 million to the Funder. The approval of the Proposed Settlement is not conditional on the Court awarding a CFO of $24.5 million to the Funder. Objecting to a CFO of $24.5 million will not otherwise delay any distribution to you of the Proposed Settlement if it is otherwise approved by the Court.
34.If you wish to object to the Proposed Settlement and/or the payment of a CFO to the Funder, you must file a written NOTICE OF OBJECTION TO PROPOSED SETTLEMENT with the Federal Court in the form attached to this Notice and marked “Z” by emailing [email protected] and copying [email protected] or by posting a copy to 305 William Street, Melbourne Victoria 3000, by 15 March 2022.
35.If you file a Notice of Objection to Proposed Settlement, you or your legal representative may attend the Approval Hearing on 28 to 30 March 2022 at 10:15 am and make further submissions to the Court in support of your objection.
36.Please consider the above matters carefully. If you have any questions about the Notice you can contact the Contradictor, Jonathon Redwood SC at [email protected], Levitt Robinson on 02 9286 3133 or [email protected], or seek your own legal advice.
37.Group members may request the submissions of the parties and the Contradictor in relation to the Proposed Settlement and the Funder’s application for a Common Fund Order by email to [email protected].
ORDERS
VID 182 of 2018 BETWEEN: PARESHKUMAR DAVARIA
First Applicant
KHUSHBU DAVARIA
Second Applicant
JATINDER PAL SINGH (and another named in the Schedule)
Third Applicant
AND: 7-ELEVEN STORES PTY LTD (ACN 005 299 427)
First Respondent
GALACTIC SEVEN ELEVEN LITIGATION HOLDINGS LLC
Second Respondent
ORDER MADE BY:
O'CALLAGHAN J
DATE OF ORDER:
15 FEBRUARY 2022
THE COURT ORDERS THAT:
Confidentiality
1.Pursuant to sections 37AF and 37AG(1)(a) of the Federal Court of Australia Act 1976 (Cth) (the Act), to prevent prejudice to the proper administration of justice the publication of each of the paragraphs identified in each of the items numerically listed in the Confidentiality Claims Schedule annexed hereto be limited to the persons and, or alternatively, subject to the limitation identified, in the Confidentiality Claims Schedule that is Annexure A to these orders (the Schedule).
2.Wherever group members are required to provide an undertaking as to confidentiality in order to gain access to any document to which they are permitted to have access, as identified in the final column of the Schedule, in respect of each document:
(a)Levitt Robinson will highlight the confidential parts of the document in yellow;
(b)access is to be granted to the documents via email request made to Levitt Robinson and on the provision of an undertaking to the following effect:
“By receiving this document you confirm that:
(i)you are a Group Member in proceedings VID180 of 2018 or VID182 of 2018 (7-Eleven Class Action proceedings) or represent such a group member as its authorised agent or in a professional capacity;
(ii)you undertake to the Applicants to keep the yellow highlighted content of the documents confidential;
(iii)you will not share the yellow highlighted content of these documents with, or disclose their content to, anyone else save for the purpose of obtaining or giving legal or financial advice and that if you do then you may be liable for damages suffered by the Applicants; and
(iv)you will inform any external lawyer instructed by you of the confidentiality obligations described in the paragraphs above.”
Notice to Group Members
3.Pursuant to sections 33X and 33Y of the Act, the Applicants have leave to distribute a notice of proposed settlement which adopts the text at Annexure B (Further Settlement Notice), in the manner set out in paragraph 4 below.
4.By 22 February 2022, for the purposes of sections 33X and 33Y of the Act, the Applicants shall:
(a)cause a copy of the Further Settlement Notice to be displayed on the Levitt Robinson website at the link
(b)cause a copy of the Further Settlement Notice to be issued by email or by post (where an active email address is not available or a bounce back message to a previously sent email has been received) to Group Members to the extent such details are available to the Applicants;
(c)arrange for an advertising campaign on the Facebook website (to run until 28 March 2022), which comprises:
(i)the logo of Levitt Robinson,
(ii)together with text within the image providing “Class Action Settlement Notice”,
and with further text below the image providing:
(iii)“Subject to court approval, the 7-Eleven Class Actions have settled. Read more in the Further Settlement Notice, which can be accessed at the following link”,
(iv)after which a link is inserted to the website
to reach an estimated audience of not less than 10,000 people targeted at persons who are located in Australia and match with at least one of the following interests:
(v)7-Eleven;
(vi)7-11 Seven Eleven;
(vii)Franchise;
(viii)Franchising or Store Manager;
(ix)Convenience Store;
(x)Convenience Food; and
(xi)Class Action.
5.By 22 February 2022, the District Registrar of the Victorian Registry of the Federal Court of Australia shall cause a copy of these orders, together with its Annexures, to be displayed on the Federal Court website at an address beginning and be available for inspection at the District Registry of the Federal Court in Melbourne, Sydney, Canberra, Brisbane and Perth.
Further submissions and evidence
6.The time specified in Order 5 of the Orders made on 16 November 2021 (being that by 4 pm on 4 February 2022 the Contradictor to file and serve any further written submissions in relation to the Applicants’ Amended Interlocutory Application filed 20 December 2021 and Galactic’s Interlocutory Application dated 22 October 2021 (together, the Applications)) be extended to 4 pm on 28 February 2022.
7.The time specified in Order 6 of the Orders made on 16 November 2021 (being that by 4 pm on 25 February 2022, the Applicants, Galactic and 7-Eleven Stores Pty Ltd file and serve any submissions in reply arising from the matters addressed in the further submissions of the Contradictor in relation to the Applications) be extended to 4 pm on 14 March 2022.
8.By 4 pm on 11 March 2022, the Contradictor is to file and serve any expert evidence in response to the expert evidence relied upon by Galactic Seven Eleven Litigation Holdings LLC (the Second Respondent).
9.On the provision of a confidentiality undertaking by any expert briefed by the Contradictor, the Confidential Affidavit of Fredrick Schulman sworn 1 February 2022 and Confidential Exhibit FS-2 be provided to that expert.
Objections to evidence
10.By 4 pm on 16 March 2022, each party and the Contradictor give notice identifying any parts of the affidavits of the other party to which it intends to object at the hearing of the Applications, with a brief statement identifying in each case the reason for the objection.
11.By 4 pm on 23 March 2022, the parties and the Contradictor are to:
(a)confer by their counsel in relation to the parties’ notices of objections pursuant to Order 4 and endeavour to resolve the parties’ and the Contradictor’s respective objections to evidence; and
(b)file and serve a document reflecting their respective positions in relation to the other party’s objections to evidence).
12.Orders 8 and 9 of the Orders made on 7 December 2021 be vacated.
Other
13.The parties and the Contradictor have liberty to apply on 3 business days’ notice, specifying the relief sought.
14.Costs of the Applicants’ Amended Interlocutory Application dated 17 December 2021 be reserved.
15.The matter be listed for case management on 15 March 2022 at 9:30 am.
16.By 14 March 2022, the Applicants are to provide to the Respondents and the Contradictor a draft Court Book index of all interlocutory applications, submissions and evidence to be relied upon by all parties at the Approval Hearing.
17.By 15 March 2022, the Respondents and the Contradictor are to provide the Applicants with any amendments to the draft Court Book index.
18.By 16 March 2022, the Applicants are to:
(a)provide an electronic (redacted) copy of the Court Book to the First Respondent; and
(b)provide an electronic (unredacted) copy of the Court Book to the Contradictor, Galactic, the Costs Referee and the Associate to the Honourable Justice O’Callaghan.
Note:Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Annexure A
| # | Evidence / Submissions / Document | Date | Document/Section over which confidentiality claimed by the Applicants | Against whom | Document Accessible to Group Members? |
| 1. | Confidential Affidavit of Brett Imlay (23.08.21) | 23 August 2021 | Exhibit BRI-44 pp6-70 Class Action Settlement Deed dated 4 August 2021 | Generally, but not against 7-Eleven or ANZ | Yes, upon undertaking to maintain confidentiality |
| 2. | Confidential Affidavit of Brett Imlay (23.08.21) | 23 August 2021 | Exhibit BRI-44 pp71-87 Deed of Settlement between Davaria Parties, ANZ and 7-Eleven | Generally, but not against 7-Eleven or ANZ | Yes, upon undertaking to maintain confidentiality |
| 3. | Confidential Affidavit of Brett Imlay (23.08.21) | 23 August 2021 | Exhibit BRI-44 pp88-103 Deed of Settlement between Kaizenworld Parties, ANZ and 7-Eleven | Generally, but not against 7-Eleven or ANZ | Yes, upon undertaking to maintain confidentiality |
| 4. | Confidential Affidavit of Brett Imlay (23.08.21) | 23 August 2021 | Exhibit BRI-44 pp104-114 and 115-125 Heads of Agreement between Davaria parties and Galactic | Generally, but not against 7-Eleven | Yes, upon undertaking to maintain confidentiality |
| 5. | Confidential Affidavit of Brett Imlay (23.08.21) | 23 August 2021 | Exhibit BRI-44 pp126-131 Variation to Heads of Agreement between Davaria parties and Galactic | Generally, but not against 7-Eleven | Yes, upon undertaking to maintain confidentiality |
| 6. | Confidential Affidavit of Brett Imlay (23.08.21) | 23 August 2021 | Exhibit BRI-44 pp 132-140 and 141-149 Heads of Agreement between Kaizenworld parties and Galactic | Generally, but not against 7-Eleven | Yes, upon undertaking to maintain confidentiality |
| 7. | Confidential Affidavit of Brett Imlay (23.08.21) Affidavit of Brett Imlay (6.10.21) | 23 August 2021 6 October 2021 | Exhibit BRI-44 pp 150-179; Exhibit BRI-46 pp 60-96 Settlement Scheme | Generally, but not against 7-Eleven or ANZ | Yes, upon undertaking to maintain confidentiality |
| 7A. | Affidavit of Brett Imlay (6.10.21) | [82] and p136 Exhibit BRI-46 and [91] and p139 Exhibit BRI-46 | Generally, but not against 7-Eleven | No | |
| 8. | Affidavit of Brett Imlay (6.10.21) | 6 October 2021 | [134] – [136] Exhibit BRI-47 pp172-176 | Generally, including 7-Eleven | No |
| 9. | Affidavit of Brett Imlay (6.10.21) | 6 October 2021 | [137]-[177] and Exhibit BRI-47 pp177-238 | Generally, including 7-Eleven | No |
| 10A. | Affidavit of Brett Imlay (13.10.21) | 13 October 2021 | [15] and Exhibit BRI-48 p38; [19] and Exhibit BRI-48 p39; the entirety of the parenthesised part of [20] of affidavit of 13.10.21 | Generally, but not against 7-Eleven | No |
| 11. | Affidavit of Brett Imlay (13.10.21) | 13 October 2021 | [26]-[28] | Generally, but not against 7-Eleven or ANZ | Yes, upon undertaking to maintain confidentiality |
| 12. | Affidavit of Brett Imlay (13.10.21) | 13 October 2021 | [35] (all but first sentence), [36], [37] (figure of $107,671.17), [40] (figures of $210,252.17 and $107,671.17) | Generally, but not against 7-Eleven or ANZ | Yes, upon undertaking to maintain confidentiality |
| 14. | Affidavit of Brett Imlay | 14 October 2021 | Whole – Affidavit exhibits Counsel’s Confidential Opinion | Generally, including 7-Eleven | No |
| 15. | Affidavit of Brett Imlay | 20 October 2021 | Whole – Affidavit exhibits Counsel’s Expanded Confidential Opinion and summarises advices provided by Counsel for the Applicants during the proceedings | Generally, including 7-Eleven | No |
| 17. | Affidavit of Jem Punthakey (3.11.21) | 3 November 2021 | [43], [46], [53], [54], [59], [66] (except for first sentence); confidentiality claim no longer maintained in respect of balance of [66]-[68] | Generally, including 7-Eleven | No |
| 18. | Affidavit of Elizabeth Harris | 12 November 2021 | The following parts of the exhibited report dated 12 November 2021: [29]-[50]; [194], Table at [212] (part), [216]-[219], [222]-[225]. | Generally, including 7-Eleven | Yes, upon undertaking to maintain confidentiality |
| 18A. | Affidavit of Elizabeth Harris | 12 November 2021 | Table at [124] | Generally, including 7-Eleven | Yes, upon undertaking to maintain confidentiality |
| 18B. | Report of Elizabeth Harris | 28 January 2022 | [35] (part) first sentence words after “raised”; [46]-[48]; [49] first and second sentences only; [54] first sentence only; [71] third sentence only; [72]; [73] second sentence words following “costs,” to end of sentence; [86], fourth sentence; [89] first and second sentences only; [99] | Generally, including 7-Eleven | Yes, upon undertaking to maintain confidentiality |
| 21. | Contradictor’s Preliminary Outline of Submissions dated 12 November 2021 | 12 November 2021 | [62], fn 36, words in [65(b)] up to but not including “we submit” | Generally, including 7-Eleven | No |
| 22. | Contradictor’s Preliminary Outline of Submissions dated 12 November 2021 | 12 November 2021 | [65]-[67] in their entirety incl fn 42, 43 | Generally, but not as against 7-Eleven or ANZ, save for [65(b)] (up to but not including “we submit”), | Yes, upon undertaking to maintain confidentiality, but excluding matter the subject of legal professional privilege in respect of [65(b)] |
| 23. | Contradictor’s Preliminary Outline of Submissions dated 12 November 2021 | 12 November 2021 | [68]-[69] incl fn 44-46 | Generally, but not against 7-Eleven (as per item 4 above) | No |
| 24. | Contradictor’s Preliminary Outline of Submissions dated 12 November 2021 | 12 November 2021 | [73] (words between “The” and “study” in the first line), [75], part of each of [77], [78] and [80], fn 56, 57, 59, 60 | Generally, including 7-Eleven | No |
| 29. | Affidavit of Brett Imlay | 17 December 2021 | [8], [12]-[14] | Generally , excluding 7-Eleven and ANZ | No |
| 30. | Affidavit of Brett Imlay | 17 December 2021 | [9]-[10] | Generally except against ANZ | No |
| 31. | Affidavit of Brett Imlay | 17 December 2021 | [11] | Generally except against ANZ | No |
| 32. | Affidavit of Brett Imlay | 17 December 2021 | [16]-[17] | Generally, except against 7-Eleven and ANZ | No |
| 32A. | Affidavit of Brett Imlay | 17 December 2021 | BRI-52 pp 67-74 and 75-82 referred to at [17] | Generally, except against ANZ | No |
| 33. | Affidavit of Brett Imlay | 17 December 2021 | [19]-[26], [29]-[32] | Generally | No |
| 37. | Affidavit of Fredrick Schulman | 1 February 2022 | [57], [71], 72] | Generally, but not against 7-Eleven | Yes, upon undertaking to maintain confidentiality |
| 39. | Contradictor’s Submissions | 7 February 2022 | Second sentence in [57] | Generally, except against 7-Eleven and ANZ | No |
| 40. | Contradictor’s Submissions | 7 February 2022 | 58(b) words following “7-Eleven” in second line to end of paragraph. 58(c) words following “7-Eleven” in second line to end of paragraph. | Generally, but not against 7-Eleven or ANZ | Yes, upon undertaking to maintain confidentiality |
| 41. | Contradictor’s Submissions | 7 February 2022 | 58(d) and 58(e) - whole. | Generally, but not against 7-Eleven or ANZ | Yes, upon undertaking to maintain confidentiality |
Annexure B
FEDERAL COURT OF AUSTRALIA
FURTHER SETTLEMENT NOTICE
VID180/2018
Davaria Pty Ltd and Kaizenworld Pty Ltd v 7-Eleven Stores Pty Ltd and Ors
VID182/2018
Pareshkumar Davaria and Ors v 7-Eleven Stores Pty Ltd & Anor
Why is this notice important?
1.The Federal Court of Australia has ordered that this notice be published. Any questions you have concerning the matters contained in this notice should not be directed to the Court. You should contact Levitt Robinson at [email protected] or seek your own legal advice if there is anything in this notice that you do not understand.
2.On 4 August 2021, the Applicants and 7-Eleven Stores Pty Ltd (7-Eleven) executed a deed of settlement in relation to two class actions against 7-Eleven (the Class Actions) that provides that 7-Eleven will pay $98 million (Settlement Sum) inclusive of legal fees, disbursements, interest and funding commission in settlement of the Class Actions (Proposed Settlement).
3.On 19 September 2021, a Settlement Notice was distributed which contained important information about the Proposed Settlement (First Notice). The First Notice can be downloaded from
4.This Further Settlement Notice provides updated and further information about the Proposed Settlement and must be read in conjunction with the First Notice.
5.The Proposed Settlement is subject to Court approval. Approval applications have been filed by the Applicants in the Class Actions (Approval Applications).
6.Galactic Seven Eleven Litigation Holdings LLC (the Funder) provided funding to the Applicants for the Class Actions. The Funder has filed applications for a “Common Fund Order” seeking a funding commission of 25% of the Settlement Sum (being, $24.5 million), to be paid to the Funder before any distribution of the balance of the Settlement Sum to group members (CFO Applications). Please refer to paragraphs 11 to 20 below for further detail.
7.The Approval Applications and the CFO Applications can be downloaded from
8.The hearing of the Approval Applications and CFO Applications was previously scheduled to occur on 16 November 2021, but will now be heard at the Federal Court of Australia, at 305 William Street in Melbourne or Level 17 Law Courts Building 184 Phillip St Queens Square in Sydney and via audio-visual link on 28 to 30 March 2022 at 10:15 am (Approval Hearing).
9.If you and your company have opted out of the Class Actions, you may disregard this notice.
10.If you are a VID180 Group Member or a VID182 Group Member (as defined in the First Notice), you have a right to object to the Proposed Settlement and/or the payment out of the Proposed Settlement of $24.5 million to the Funder.
Common Fund Order vs Funding Equalisation Order
Common Fund Order
11.A Common Fund Order is an order of the Court that provides for the Funder to receive a percentage of the Settlement Sum that the Court considers to be fair and reasonable, which is deducted from the Settlement Sum before distribution to group members.
12.As noted above, the Funder has made the CFO Applications, seeking a funding commission of 25% of the Settlement Sum ($24.5 million) to be paid to the Funder before any distribution of the balance of the Settlement Sum to group members.
13.The Contradictor has been appointed to represent the interests of group members on the Approval Applications and the CFO Applications. The Contradictor is opposing the CFO Applications because he contends that the Court does not have the power to make a CFO and that a CFO in the amount sought is not fair and reasonable.
14.In dealing with the CFO Applications, the Court may:
(a)make a Common Fund Order with a funding commission of 25% of the Settlement Sum;
(b)make a Common Fund Order, but with funding of commission lower than 25% of the Settlement Sum or some other funding payment; or
(c)decline to make a Common Fund Order.
Funding Equalisation Order
15.If the Court does not make a Common Fund Order, the Funder may assert its contractual rights under the funding agreements executed by some group members, and if so, the Applicants will seek a Funding Equalisation Order.
16.A Funding Equalisation Order is an order of the Court that requires the “unfunded group members” (being, those who have not signed a funding agreement with the Funder) to contribute equally to the commission that “funded group members” (being, those who have signed a funding agreement with the Funder) have agreed to pay the Funder under their funding agreements. This means that all group members, both funded and unfunded, will contribute equally to the commission that funded group members have agreed to pay to the Funder.
17.Approximately 37% of the stores of all group members (not including stores formerly operated by deregistered companies or stores operated or formerly operated by group members who have signed releases with 7-Eleven) are stores of funded group members.
18.Approximately 40% of the stores of all VID180 group members which have non-zero weighted claims (not including stores formerly operated by deregistered companies or stores operated or formerly operated by group members who have signed releases with 7-Eleven) are stores of funded group members.
19.Under the funding agreements signed by funded group members, the Funder is entitled to 35% of each funded group member’s compensation entitlement under the Settlement Scheme (as described at [60]-[61] of the First Notice).
20.If a Funding Equalisation Order were to be made, the Funder could be entitled to a payment of approximately $12 to $16 million from the Settlement Sum, compared to the $24.5 million sought by the Funder under a Common Fund Order. This figure may increase or decrease, depending on the number of group members who lodge claims under the Proposed Scheme and the value of the claims of the funded group members.
Benefits obtained by the Applicants
21.The Applicants will receive the following benefits in connection with the Proposed Settlement additional to any compensation they and group members are to receive under the Settlement Scheme:
(a)The Applicants will receive a payment from 7-Eleven for the early surrender of their franchises, and the franchising arrangement between 7-Eleven and each of the Applicants will come to an end;
(b)The Applicants have received monies from the Funder for their time and inconvenience during the course of these proceedings. The Applicants may receive further monies in that regard, by order of the Court (see [32(d)] of the First Settlement Notice); and
(c)Each of the Applicants have reached agreement with ANZ to settle their individual claims with the ANZ Bank (previously a respondent to the Class Actions), and have also negotiated reductions in their personal debts with the ANZ Bank. The Applicants were not able to and did not negotiate as representatives of group members with the ANZ Bank. Those negotiations were personal to the Applicants and intended to effect the exit of the Applicants from their banking relationship with ANZ. For that reason, the Applicants’ settlements with ANZ are confidential and do not involve any claims that other group members may have against ANZ.
22.Copies of the Deeds of Settlement entered into by the Applicants with ANZ and Heads of Agreement entered into by the Applicants with Galactic regarding their ANZ loans, and the Deeds of Settlement entered into between the Applicants and 7-Eleven regarding the termination of their franchise agreements, may be obtained by downloading them from (and, on agreeing to keep the contents of the Deeds of Settlement and the Heads of Agreement confidential, Levitt Robinson will provide verified group members with a passcode).
Update to number of Group Members
23.The numbers provided at [15]-[16] of the First Notice have been updated below and broken down into sub-categories of group members with varying allocated entitlements under the Proposed Settlement. The allocations (expressed as percentage weightings of their VID180 Loss Claims, VID180 Rebates Claims and VID182 Claims) are explained further below.
VID180 Class Action
24.At [15] of the First Notice it is stated that after the opt out process which took place in 2020 in the VID180 Class Action (as defined in the First Notice), approximately 808 stores (not including the three stores operated by the VID180 Applicants (as defined in the First Notice)) and approximately 676 VID180 Group Members (not including the VID180 Applicants and as defined in the First Notice) remain. That number is now estimated to be 809 stores, or 812 stores including the VID180 Applicants. Of those 812 stores:
(a)approximately 164 are stores that were operated by companies that are now deregistered, which means those companies do not exist and cannot make a claim unless reinstated, leaving 647 stores; and
(b)approximately 157 of the remaining stores are stores that are or were operated by companies that have executed releases with 7-Eleven, which means that those companies will likely have no entitlement under the Proposed Settlement unless the Independent Counsel (as defined in the First Notice) determines that the individual group member’s release is ineffective (this process is summarised at [25]-[26] of the First Notice).
25.This leaves an estimated 490 stores that may be the subject of claims by VID180 Group Members in the Proposed Settlement (unless some of the companies are reinstated or some of the releases are determined ineffective, in which case the number of remaining stores will be more than 490). Out of those stores, under the Proposed Settlement:
(a)the VID180 Loss Claims of franchisee operators who entered into a Franchise Agreement on or after 21 February 2012 and before 1 October 2015 (being claims in relation to approximately 145 stores) would have a weighting of 100% (as set out at [45] of the First Notice);
(b)the VID180 Loss Claims of franchisee operators who:
(i)entered into a Franchise Agreement before 21 February 2012 and sold or disposed of the franchise after 1 October 2015; or
(ii)entered into a Franchise Agreement before 21 February 2012 and still operate the franchise; or
(iii)entered into a Franchise Agreement after 21 February 2012 and sold or disposed of the franchise before 1 October 2015,
being claims in relation to approximately 178 stores, would have a weighting of 33.3% (as set out at [46]-[47] of the First Notice);
(c)the VID180 Loss Claims of franchisee operators who:
(i)entered into a Franchise Agreement before 21 February 2012 and sold or disposed of the franchise before 1 October 2015; or
(ii)entered into a Franchise Agreement after 1 October 2015,
being claims in relation to approximately 167 stores, would have a weighting of zero (0) (as set out at [49] of the First Notice); and
(d)the VID180 Group Members of all 490 stores are eligible to share in the distribution of the VID180 Rebates Claims (as set out at [41(a)] of the First Notice).
VID182 Class Action
26.At [16] of the First Notice it is stated that after the opt out process which took place in 2020 in the VID182 Class Action (as defined in the First Notice), there were approximately 1,234 VID182 Group Members (not including the VID182 Applicants and as defined in the First Notice). That number is now estimated to be 1,228. Of those 1,228 VID182 Group Members, there are 1,583 “VID182 Claims”, as some VID182 Group Members are connected with more than one store and therefore have more than one claim.
27.Of those 1,583 VID182 Claims, there are approximately 246 that have executed releases with 7-Eleven, which means that those group members will likely have no entitlement under the Proposed Settlement unless the Independent Counsel determines that the individual group member’s release is ineffective (as summarised at [25]-[26] of the First Notice).
28.That leaves 1,337 VID182 Claims (unless some of the releases are ineffective, in which case the number of remaining VID182 Claims will be more than 1,337). Of those VID182 Claims, under the Proposed Settlement:
(a)the VID182 Claims of directors or guarantors:
(i)under a Franchise Agreement entered into on or after 21 February 2012 and before 1 February 2015; or
(ii)who became guarantors under an ANZ loan contract on or after 21 February 2012 and before 1 October 2015;
and where either:
(A)the 7-Eleven store franchise the subject of the Franchise Agreement was disposed of after 1 October 2015; or
(B)the Franchisee still retains the franchise,
being, approximately 347 claims, would have a weighting of 100% (as set out at [54] of the First Notice);
(b)the VID182 Claims of:
(i)Directors or guarantors under a Franchise Agreement entered before 21 February 2012, or who became guarantors under an ANZ loan contract before 21 February 2012, and where either:
(A)the 7-Eleven store franchise the subject of the Franchise Agreement was disposed of after 1 October 2015; or
(B)the Franchisee still retains that Franchise;
or,
(ii)Directors or guarantors under a Franchise Agreement entered on or after 21 February 2012, or who became guarantors under an ANZ loan contract on or after 21 February 2021, and where the 7-Eleven store franchise the subject of the Franchise Agreement was disposed of before 1 October 2015,
being, approximately 446 claims, would have a weighting of 33.3% (as set out at [55]-[56] of the First Notice); and
(c)the VID182 Claims of:
(i)Directors or guarantors under a Franchise Agreement entered before 21 February 2012, or who become guarantors under an ANZ loan contract before 21 February 2012, and where the 7-Eleven store franchise the subject of the Franchise Agreement was disposed of before 1 October 2015; or
(ii)Directors or guarantors under a Franchise Agreement that was entered into after 1 October 2015 or who became guarantors under an ANZ loan contract after 1 October 2015,
being approximately 544 claims, would have a weighting of zero (0) (as set out at [57] of the First Notice).
Update as to costs in relation to Approval Applications and Administration of the Settlement Scheme
29.At [32(f)] of the First Notice, the Applicants’ legal costs and disbursements sought to be deducted from the Settlement Sum included an estimated $487,470 in relation to approval of the Settlement.
30.As at 1 December 2021, the costs incurred by the Applicants in relation to the Approval Applications were in excess of $900,000 plus GST. The entirety of the costs that the Applicants will incur in association with the Approval Applications is now anticipated to exceed $1.25 million plus GST.
31.At [32(f)] of the First Notice, the Applicants’ legal costs and disbursements sought to be deducted from the Settlement Sum included an estimated $1.1 million in relation to the administration of the Settlement Scheme. That estimate is now $1,310,746.
32.The reasonableness of the costs that the Applicants have and will incur in relation to the Settlement Applications will be the subject of a report by the Referee appointed by the Court (see [67(b)(ii)] of the First Notice).
Why are you getting this notice
33.You have a right to object to the Proposed Settlement and/or the payment of a CFO of $24.5 million to the Funder. The approval of the Proposed Settlement is not conditional on the Court awarding a CFO of $24.5 million to the Funder. Objecting to a CFO of $24.5 million will not otherwise delay any distribution to you of the Proposed Settlement if it is otherwise approved by the Court.
34.If you wish to object to the Proposed Settlement and/or the payment of a CFO to the Funder, you must file a written NOTICE OF OBJECTION TO PROPOSED SETTLEMENT with the Federal Court in the form attached to this Notice and marked “Z” by emailing [email protected] and copying [email protected] or by posting a copy to 305 William Street, Melbourne Victoria 3000, by 15 March 2022.
35.If you file a Notice of Objection to Proposed Settlement, you or your legal representative may attend the Approval Hearing on 28 to 30 March 2022 at 10:15 am and make further submissions to the Court in support of your objection.
36.Please consider the above matters carefully. If you have any questions about the Notice you can contact the Contradictor, Jonathon Redwood SC at [email protected], Levitt Robinson on 02 9286 3133 or [email protected], or seek your own legal advice.
37.Group members may request the submissions of the parties and the Contradictor in relation to the Proposed Settlement and the Funder’s application for a Common Fund Order by email to [email protected].
REASONS FOR JUDGMENT
Ex tempore
(Revised from transcript)O’CALLAGHAN J:
The 15 February 2022 orders set out above were made largely by agreement between the parties, and the contradictor. The only issue to be resolved on that day which required the giving of reasons related to an application by the applicants for suppression or non‑publication orders. I set out below the reasons that I delivered ex tempore in relation to that application.
This is an application by the applicants in this proceeding seeking suppression or non‑publication orders, pursuant to ss 37AF and 37AG of the Federal Court of Australia Act 1976 (Cth), in respect of nine “items” identified in a further amended confidentiality claims schedule emailed to my chambers on 14 February 2022. The items are numbered 13, 16, 19, 20, 25, 26, 34, 35, and 38 (which I shall call the disputed items or the disputed documents). There is no contest in relation to any of the other items in that schedule, and an order in that regard will be made accordingly.
The settlement approval application is set down for hearing on 28 March 2022 on an estimate of three days. It is necessary to determine this application promptly, principally in order that 7‑Eleven Stores Pty Ltd (7‑Eleven) should know if it is in a position to have access to those parts of the disputed items over which the claims to a suppression or non‑publication order are made, and prepare for the hearing accordingly. It follows that these reasons are not as complete as they might have been if I had the luxury of a little more time.
In broad terms, the documents the subject of the disputed items, at least in part, relate to the applicants’ evidence, as they put it in their written submissions, “directed at the pressure and anxieties felt by franchisees, and hence their state of mind and the consequent effect on book building, as well as the ability to attract funding and the terms of litigation funding agreements”.
The applicants say that they will submit at the settlement approval hearing that those are matters that should bear upon the exercise of the court’s discretion in respect of whether to make a fund equalisation order. Galactic Seven Eleven Litigation Holdings LLC, the funder, has submitted that they are matters that should bear upon the exercise of the court’s discretion whether to make a common fund order.
It is important to appreciate that in respect of the material over which the applicants seek a suppression or non‑publication order, the applicants say that they will not ask the court to make findings in respect of 7‑Eleven’s conduct.
There is a live question as to whether any evidence directed at the pressure and anxieties felt by franchisees and any effect on book building is admissible or relevant to any issue that might arise on the settlement approval, but the parties agree that that is a matter that does not arise today.
The issue to be resolved today is whether the applicants have established, the onus being on them, whether the making of a suppression or non‑publication order is necessary to prevent prejudice to the proper administration of justice. See ss 37AF and 37AG(1)(a) of the Federal Court of Australia Act.
The relevant principles are well settled and were not the subject of any dispute.
A suppression or non‑publication order should only be made in exceptional circumstances. The court must take into account that the primary objective of the administration of justice is to safeguard the public interest in open justice. The cases make it clear that the “paramount consideration is the need to do justice; publication can only be avoided where necessity compels departure from the open justice principle”. See Country Care Group Pty Ltd v Director of Public Prosecutions (Cth) (No 2) (2020) 275 FCR 377 at 379 [8], and the cases there cited.
The cases also make clear that the word “necessary” in s 37AG(1)(a) is a “strong word”. See e.g. Hogan v Australian Crime Commission (2010) 240 CLR 651 at 664 [30].
Further, as the Full Court said in Country Care at 383–384 [29], the principle of open justice is one of the overarching principles in the administration of justice which lies at the heart of the exercise of judicial power as part of the wider democratic process. The principle involves justice being seen to be done, and although it is not an absolute concept, an order restricting the ordinary open justice approach is not lightly to be made.
I have inspected each of the disputed documents and, in particular, those parts of the documents that the applicants seek to suppress or in respect of which a non‑publication order is sought. Those documents include affidavits and submissions which record, in one way or another, evidence of the alleged “pressure and anxieties felt by franchisees, and hence their state of mind and the consequent effect on book building, as well as the ability to attract funding and the terms of litigation funding agreements”.
The applicants in their confidentiality schedule base their claims to a suppression or non‑publication order on the following four claims:
(1)material which is subject to legal professional privilege;
(2)material in respect of which contractual or equitable obligations of confidence exist;
(3)material which is private to particular persons, the disclosure of which would tend to inhibit the administration of justice if disclosed because it would dissuade persons from providing information which would or may assist the court’s determination of settlement approval applications; and
(4)material the disclosure of which may be substantively or tactically adverse to the applicants or other group members if that material were to come to the attention of 7‑Eleven and the proceedings were to continue (because the settlement is not approved).
At the hearing this morning, senior counsel for the applicants did not seek to advance any specific case for suppression or non‑publication founded on points 2, 3, or 4. Instead, he relied in particular on the claims for confidentiality based upon legal professional privilege. However, as Mr Craig QC, senior counsel for 7‑Eleven, submitted, it is not open to the applicants to rely on legal professional privilege in those circumstances because they have put the question of the relevant perceptions of 7‑Eleven’s conduct in issue. In those circumstances, it seems to me self‑evident that the applicants have waived any legal professional privilege over the relevant documents, because by putting the perceptions in issue, they have acted inconsistently with the maintenance of the confidentiality which the legal privilege is intended to protect. See generally Mann v Carnell (1999) 201 CLR 1 at 13 [29].
Mr Craig submitted that the court should make orders permitting his client to inspect unredacted versions of each of the disputed documents.
At the close of the hearing, Ms Caulfield, who is or represents a news publisher within the meaning of s 37AH(2)(d) of the Federal Court of Australia Act, sought leave to make a submission that it was in the public interest that there be no suppression or non-publication order made in respect of any of those parts of the disputed documents. Ms Caulfield relied primarily on the principles I have referred to concerning open justice. I granted leave to Ms Caulfield to appear and to be heard on this application pursuant to s 37AH(2).
I am not satisfied that any form of non‑publication or suppression order in respect of the disputed items is necessary to prevent prejudice to the proper administration of justice, having regard to the particular circumstances of this case, and in particular, having regard to the nature of the evidence about the so‑called perceptions, be they perceptions of a small number of franchisees, or of the funder. Aside from the claim to confidentiality founded on legal professional privilege, which, as I say, falls away, no sufficient reason was identified to find the making of the order sought by the applicants.
For those reasons, I decline to make any order for the suppression or non‑publication of those parts of the disputed items referred to above.
7-Eleven submitted in the summary document handed to me this morning that it apprehended that the material to which any of its concerns could reasonably attach “possibly” include items 14 and 15 in the confidentiality claims document. However, those documents are confidential opinions of the applicants’ counsel concerning the reasonableness of the terms of settlement and of the settlement scheme. Each of them is privileged, so they may not be accessible to group members, to 7-Eleven, or to the public, in circumstances where no issue of waiver arises.
I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice O'Callaghan. Associate:
Dated: 23 February 2022
SCHEDULE OF PARTIES
VID 182 of 2018 Applicants
Fourth Applicant: SUMAN MEET KAUR
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