Alamdo Holdings Pty Ltd v Croc's Franchising Pty Ltd

In the case of Alamdo Holdings Pty Ltd v Croc's Franchising Pty Ltd, the dispute centred on the interpretation and validity of special provisions introduced during the COVID-19 pandemic that impacted the rights of lessors under commercial leases in New South Wales. The case was heard and determined by the Supreme Court of New South Wales. The plaintiff, Alamdo Holdings, sought to terminate a lease agreement with the defendant, Croc's Franchising, but was restricted by the provisions of the COVID-19 Regulation, which purportedly prevented lessors from terminating leases or recovering possession during the pandemic.

The primary legal issues before the court were whether the regulation, styled as "Commercial leases – COVID-19 pandemic special provisions" and forming Schedule 5 of the Conveyancing (General) Regulation 2018 (NSW), was valid and could effectively prohibit a lessor from exercising their rights under a lease agreement. The court also needed to determine if the COVID-19 Regulation was authorised under sections 87(1)(c) or (d) of the Retail Leases Act 1994 (NSW). These sections pertain to the making of regulations for the purposes of ensuring fair and reasonable terms in retail leases, and for the protection of tenants.

The court held that the regulation in question was invalid as it purported to prohibit the recovery of possession or termination of a lease by a lessor under the terms of a lease. The court found that the regulation did not align with the statutory framework of the Retail Leases Act and exceeded the powers conferred by sections 87(1)(c) and (d). The court emphasised that the provisions of the COVID-19 Regulation were too broad and imposed significant restrictions on the rights of lessors without adequate justification or proportionality. Consequently, the court declared the regulation invalid to the extent it restricted the lessor's rights under the lease agreement.

The final orders of the court declared the COVID-19 Regulation invalid to the extent it purported to prohibit the recovery of possession or termination of a lease by a lessor under the terms of a lease. The decision clarified the boundaries of regulatory power under the Retail Leases Act and underscored the need for any regulatory restrictions to be narrowly tailored and proportionate to the circumstances that justified their imposition.