Croc’s Franchising Pty Ltd v Alamdo Holdings Pty Ltd [2023] NSWCA 256

Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Croc's Franchising Pty Ltd v Alamdo Holdings Pty Ltd [2023] NSWCA 256 Hearing dates: 14 and 15 August 2023 Date of orders: 27 October 2023 Decision date: 27 October 2023 Before: Payne JA at [1]; Stern JA at [187]; Basten AJA at [199] Decision: (1) Appeal allowed. (2) Set aside orders 1 and 2 of Stevenson J dated 28 February 2023 and all orders dated 8 March 2023 and in lieu thereof order: (a) The Amended Commercial List Statement filed 19 August 2021 is dismissed. (b) First respondent to pay the appellants' costs of the Amended Commercial List Statement. (c) The Commercial List Cross-claim Statement filed 15 November 2022 remitted to the Equity Division to deal with damages, if any, to which the first appellant is entitled. (d) Costs of the cross-appeal to be costs in the cause of the remitted hearing. (3) First respondent to pay the appellants' costs of the appeal. Catchwords: LEASES AND TENANCIES – retail lease –executed agreement for lease and lease for period of 10 years – whether lessor entitled to terminate lease – whether termination prohibited by COVID-19 pandemic regulation – whether lessor elected to waive certain grounds for terminating lease – where lease not registered – whether parties bound by contractual force of agreement for lease – proper construction of guarantee – whether guarantors liable for obligations of lessee – where tenant's entitlement to damage not sufficiently litigated – whether appropriate for appeal court to determine entitlement to damages STATUTORY INTERPRETATION – subordinate legislation – schedule to regulation – application of principles of statutory interpretation – schedule replaced by second version – schedule containing blanket prohibition on terminating lease during "prescribed period" – separate provisions permitting termination subject to conditions – whether specific exceptions prevailed over general prohibition – coherent reading in light of extrinsic materials EVIDENCE ­– privileges – settlement negotiations – privilege under Small Business Commissioner Act 2013 (NSW) s 19 over discussions during mediation – whether privilege waived by party's conduct and communications Legislation Cited: Civil Procedure Act 2005 (NSW), Pt 6 Conveyancing Act 1919 (NSW), ss 127–129 Criminal Code 1899 (Qld), ss 659, 673 Government and Related Employees Appeals Tribunal Act 1980 (NSW), s 20 Interpretation Act 1987 (NSW), ss 21, 32–35 Ombudsman Act 1974 (NSW), s 32 Real Property Act 1900 (NSW), ss 41, 53 Retail Leases Act 1994 (NSW), ss 87, 88 Small Business Commissioner Act 2013 (NSW), s 19 Conveyancing (General) Regulation 2018 (NSW), Sch 5 Coronavirus Economic Response Package (Payments and Benefits) Rules 2020 (Cth), ss 5–8, 8B Cases Cited: Agricultural & Rural Finance v Gardiner (2008) 238 CLR 570; [2008] HCA 57 Alamdo Holdings Pty Ltd v Croc's Franchising Pty Ltd [2022] NSWSC 1746 Alamdo Holdings Pty Ltd v Croc's Franchising Pty Ltd (No 3) (unreported, NSW Supreme Court, 8 March 2023) Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (NT) (2009) 239 CLR 27; [2009] HCA 41 Allianz Australia Insurance Ltd v Delor Vue Apartments CTS 39788 (2022) 406 ALR 632 Boensch v Pascoe (2019) 268 CLR 593; [2019] HCA 49 Chan v Cresdon Pty Ltd (1989) 168 CLR 242 Collector of Customs v Agfa-Gevaert Ltd (1996) 186 CLR 389; [1996] HCA 36 Commissioner for Railways (NSW) v Agalianos (1955) 92 CLR 390 Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297; [1981] HCA 26 DTR Nominees Pty Ltd v Mona Pty Ltd (1978) 138 CLR 423 Environment Protection Authority v Orchard Holdings (NSW) Pty Ltd (in liq) (2014) 86 NSWLR 499; [2014] NSWCA 149 Foran v Wight (1989) 168 CLR 385 Hall v Jones (1942) 42 SR (NSW) 203 Harrison v Melhem (2008) 72 NSWLR 380; [2008] NSWCA 67 Kuru v State of New South Wales (2008) 236 CLR 1; [2008] HCA 26 Lazaris v R [2014] NSWCCA 163 Leitz Leeholme Stud Pty Ltd v Robinson [1977] 2 NSWLR 544 Master Education Services Pty Ltd v Ketchell (2008) 236 CLR 101; [2008] HCA 38 No 20 Cannon Street Ltd v Singer & Friedlander Ltd [1974] 1 Ch 229 Owendale Pty Ltd v Anthony (1967) 117 CLR 539 Panayi v Deputy Commissioner of Taxation [2017] NSWCA 93; (2017) 319 FLR 228 Patman v Fletcher's Fotographics Pty Ltd (1984) 6 IR 471 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28 Ross v The Queen (1979) 141 CLR 432; [1979] HCA 29 Sargent v ASL Developments Ltd (1974) 131 CLR 634 Seltsam Pty Ltd v McGuinness (2000) 49 NSWLR 262; [2000] NSWCA 29 Smith v The Queen (1994) 181 CLR 338; [1994] HCA 60 The Ombudsman v Laughton (2005) 64 NSWLR 114; [2005] NSWCA 339 Todarello Property Investments Pty Ltd v GJA Kalra Pty Ltd [2021] NSWSC 1678 Texts Cited: "National Cabinet Mandatory Code of Conduct – SME Commercial Leasing Principles during COVID-19" DC Pearce and RS Geddes, Statutory Interpretation in Australia (9th ed, LexisNexis Butterworths, 2019) Explanatory Note to the Retail and Other Commercial Leases (COVID-19) Regulation 2020 (NSW) Explanatory Note to the Retail and Other Commercial Leases (COVID-19) Regulation (No 2) 2020 (NSW) Perry Herzfeld and Thomas Prince, Interpretation (2nd ed, 2020, Thomson Reuters) Category: Principal judgment Parties: Croc's Franchising Pty Ltd (first appellant) Brett Christopher Aldons (second appellant) Lawrence John Cusdin (third appellant) Alamdo Holdings Pty Ltd (first respondent) State of New South Wales (second respondent) Representation: Counsel: