Croc’s Franchising Pty Ltd v Alamdo Holdings Pty Ltd (No 2)

THE COURT: On 27 October 2023, this Court made the following orders in the principal proceedings: Croc’s Franchising Pty Ltd v Alamdo Holdings Pty Ltd [2023] NSWCA 256 at [186]:

In what follows, familiarity with the principal judgment is assumed.

On 2 November 2023, a notice of motion was filed by the respondent, Alamdo Holdings Pty Ltd (“Alamdo”) pursuant to rr 36.16(3A) and 36.17 of the Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”) seeking the following orders:

On 9 November 2023, as the appellant, Croc’s Franchising Pty Ltd (“Croc’s”), had not responded to enquiries made by Alamdo about whether Croc’s consented to the making of those orders, the Court gave the following directions:

Croc’s did not consent to the making of any of the proposed orders. Submissions were filed by Croc’s on 20 November 2023 and Alamdo on 24 November 2023.

Croc’s conceded that, in accordance with the reasons of the Court, they remained liable for $138,629 in rental arrears and $22,817.76 in outgoings (together with interest) in respect of the year ended 30 June 2020. Croc’s submitted that, nonetheless, judgment should not be entered in favour of Alamdo for those amounts, plus interest, because Croc’s has an as yet undetermined cross-claim which has been remitted to the Equity Division and may be entitled to a set-off.

Alamdo submitted that judgment for this sum was entered below as part of the total judgment and that the orders made by this Court setting aside the orders made in Alamdo’s favour in full were inconsistent with the reasons the Court gave to that extent. This aspect of Alamdo’s claim below was a claim in debt for payment of outstanding rental arrears and outgoings accruing during the term of the lease. The judgment entered in the Court below included the amount of that debt.

Alamdo’s submission should be accepted. By reason of rr 36.16(3A) and 36.17 of the UCPR, it is clear that jurisdiction exists to give effect to Croc’s concession that in accordance with the reasons of the Court, Croc’s remained liable for $138,629 in rental arrears and $22,817.76 in outgoings (together with interest). Orders should be made correctly reflecting the reasons of the Court.

As to Croc’s’ submission that orders should not be made pending determination of the cross-claim, no defence of set off was pleaded or conducted by Croc’s in the proceedings below. No set-off defence can now be raised by the appellants. Further, no ground of appeal was raised in this Court raising any entitlement to a set-off. The fact that the cross-claim has now been remitted to the Equity Division does not provide a basis to disturb that component of the judgment correctly entered in favour of Alamdo by the Court below.

It follows that the judgment entered for Alamdo in the Court below should not be set aside in full but, rather, varied pursuant to rr 36.16(3A) and 36.17 of the UCPR to reduce the judgment sum to $189,279.87, comprising outstanding rental arrears and outgoings, together with pre-judgment interest calculated to the date of the orders this Court made on 27 October 2023. That is the sum in proposed order 2(a) in prayer 1 of Alamdo’s motion. Croc’s concede that they remain liable for $138,629 in rental arrears and $22,817.76 but do not, in their submissions, address interest. Alamdo is clearly entitled to pre-judgment interest. That brings the total to which Alamdo is entitled to the sum of $189,279.87 identified in the Notice of Motion. The orders proposed by Alamdo should be made. Out of an abundance of caution, an order should also be made that the Amended Commercial List Statement filed 19 August 2021 is otherwise dismissed.

The other subject matter of Alamdo’s motion was an opportunity to make brief submissions about the costs of the summons below and the costs of the appeal, having regard to the amended orders about the principal sum. Alamdo’s submissions should be accepted. The parties should be given a brief opportunity to make submissions concerning the costs of the summons below and the appeal. Those submissions will be dealt with on the papers.

Finally, Croc’s in its submissions made an informal application for the release of security it had been ordered by Brereton JA to pay into court as a condition of the stay of the judgment below. The amounts comprised:

Given that Alamdo is now entitled to judgment in the sum to $189,279.87, prima facie it is entitled to have paid out to it the sum of $184,190.14 paid into Court, together with any accrued interest. Whether that order should be made now should be the subject of brief written submissions. Whether the sum of $110,000 paid as security for Alamdo’s costs of the appeal should be paid out, and to whom, can also be the subject of the brief additional submissions the parties will be permitted to make.

As Alamdo has been successful in having these orders made, the costs of the motion should be paid by Croc’s.

For the foregoing reasons the Court makes the following orders: