A disagreement over unredeemed restaurant credits between collapsed Melbourne restaurant business Calia and hospitality platform Liven has escalated, with the former advising concerned customers to contact Consumer Affairs Victoria, and the latter accusing the enterprise of an “unwillingness to honour their legal obligations”.
Calia Australia, which operates a flagship eatery in the Melbourne CBD, and two spin-off restaurants at Chadstone Shopping Centre, entered voluntary administration on June 28.
Puzzle Coffee, a Melbourne cafe chain with close ties to Calia, entered voluntary administration the same day.
Documents published by the Australian Securities and Investments Commission (ASIC) show Glenn Anthony Crisp and Andrew Mattinson, both of Jirsch Sutherland, were jointly appointed as administrators for Calia Australia.
Crisp and Mattinson are listed as joint administrator and joint appointee for Puzzle Coffee, respectively.
Calia and Puzzle Coffee continue to operate as the administrators work on a Deed of Company Arrangement, which, if accepted by creditors, could see the businesses carry on in a restructured form.
Both businesses offered customers the ability to pre-pay for dining credits through the Liven platform, a hospitality tech provider allowing diners to earn bonus credits when they eat or drink at a participating venue.
However, the venues stopped accepting dining credit payments through the Liven system when the businesses entered into voluntary administration, leaving customers stuck with unspent food and drink credits.
Traditional gift card holders are usually considered unsecured creditors to a business that enters voluntary administration, often putting them at the back of the queue in the payout process.
Now, the status of the unspent Calia and Puzzle Coffee credits, and who is responsible for recouping customers, has become a point of contention.
Melbourne diner Jen* told SmartCompany she has purchased at least $1400 of Calia-branded credits since 2017, with bonus offers from Calia taking the in-store value of those credits to over $2000.
She said she contacted Calia on July 10 to inquire about the status of her unspent credits.
In an email viewed by SmartCompany, a Calia representative appeared to say the funds underwriting those unspent credits were tied up with Liven, not the restaurant business.
“We would like to clarify that although Liven may brand the credits or vouchers as Calia, it is essential to understand that Calia and other small businesses do not receive any upfront payment from customers when they purchase food dollars through the Liven app,” the representative said.
“If Liven refuses to provide a refund we suggest you lodging a report to consumer affairs,” they added, appearing to refer to Consumer Affairs Victoria.
Without mentioning Liven directly, the Jirsch Sutherland spokesperson confirmed on Thursday the position of Calia’s joint administrators: customers concerned about the status of their credits should contact the Victorian consumer watchdog.
“Jirsch Sutherland has advised that customers with unspent credits should contact Consumer Affairs Victoria and refer to the terms and conditions associated with the issue of the credits,” the spokesperson said.
Jen did not lodge a formal Consumer Affairs Victoria against Liven, she said, claiming the platform was “really good” in transferring Calia credits purchased by her mother to other restaurants on the Liven platform.
She is personally assessing her options regarding her unspent credits, as “I prefer receiving the refund to my original payment method” rather than “having it trapped in my Liven wallet”.
While the joint administrators for Calia and Puzzle Coffee point concerned customers to regulatory bodies and state the businesses are not in a position to honour outstanding credits, Liven disputes the business’ characterisation of the unspent credits.
“When consumers dine or purchase promotions run by venues, they enter into a transaction with a venue,” a Liven spokesperson told SmartCompany on Thursday.
“Calia and Puzzle have taken the unusual step of attempting to pass their responsibility to the processing platform.”
Liven itself is now pointing diners towards the administrators and regulatory bodies for further information.
“We have responded to any customer disturbed by Calia and Puzzle’s unwillingness to honour their legal obligations that they have the right to contact them directly or the respective authorities and consumer bodies.”
Although Liven suggests responsibility for those unspent credits ultimately rests with the restaurant and cafe businesses, the spokesperson says Liven is offering to transfer their value for use at participating venues, plus a 20% bonus food credit.
“We have converted hundreds of Calia and Puzzle customer credits for use in other venues while we continue to establish a satisfactory response from Calia and Puzzle,” they said, with the offer open to all diners waiting in limbo as a result of the administration.
Separate from the status of unspent customer credits, a Jirsch Sutherland spokesperson has confirmed Calia owes Liven approximately $2 million, relating to interest-bearing funds the tech platform lent the restaurant business.
Responding to speculation about how that debt and the dispute over unspent credits may affect the business, the spokesperson said Liven is prepared to handle the financial fallout.
Beyond credits, Liven is diversified across point-of-sale offerings, inventory management, stock procurement, and other back-end technologies used by Australian restaurants, they said.
The Calia and Puzzle Coffee situation “does not impact our operations”, and restaurants closing is “something we regularly manage, given the nature of the hospitality industry,” they said.
The status of other Liven credits, which can be pre-purchased in bundles and spent across a wide variety of participating venues, is also unaffected, they added.
As the administrators suggest diners contact Consumer Affairs Victoria, Liven stated it has not been contacted by the organisation, but would “work constructively” with the watchdog if called upon.
*Surname withheld for anonymity.
Senior Business Journalist
Focused on the small business sector, David’s work covers the political, regulatory, and economic issues facing Australian entrepreneurs. Prior to joining SmartCompany, he was a reporter for Business Insider Australia. You can follow him on LinkedIn.
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