Re Mossgreen Pty Ltd (in liquidation) - [2018] VSC 230

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT
CORPORATIONS’ LIST

S CI 2018 01603

IN THE MATTER OF MOSSGREEN PTY LTD (IN LIQUIDATION)

BETWEEN

SOBRAZ PTY LTD	Plaintiff
NEIL ROBERTSON	Amicus curiae

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JUDGE:	Robson J
WHERE HELD:	Melbourne
DATE OF HEARING:	1, 8 May 2018
DATE OF JUDGMENT:	9 May 2018
CASE MAY BE CITED AS:	Re Mossgreen Pty Ltd (in liquidation)
MEDIUM NEUTRAL CITATION:	[2018] VSC 230

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CORPORATIONS – Mossgreen Pty Ltd (in liquidation) carried on business as an auctioneer – Company kept customers’ goods in warehouses – Administrators gave up possession of warehouse owned by the plaintiff – Plaintiff now in possession of customer’s goods – Liquidators do not intend to return the goods to customers – Application by plaintiff landlord for the appointment of receiver of the goods in its warehouse to assist owners to be given their goods – Application refused.

CORPORATIONS – Appointment of a receiver under s 27 of the Supreme Court Act 1958 or under the Court’s inherent jurisdiction – Jurisdiction discussed.

CONSUMER PROTECTION – Owners of goods entitled to delivery up of the goods under Part 4.2 of the Australian Consumer and Fair Trading Act 2012 (Vic) – Appointment of receivers may add to the charges the owners of the goods must pay to obtain delivery up of the goods and delay obtaining delivery up of goods – Opportunity given to owners of the goods to exercise rights under the Australian Consumer and Fair Trading Act 2012 (Vic) without costs and possible delays associated with appointment of a receiver.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr P Fary	Maddocks
For the Amicus Curiae	Dr O Bigos	Piper Alderman
For the Liquidators	Ms L Papaelia	King & Wood Mallesons

HIS HONOUR:

Mossgreen Pty Ltd (in liq) (‘Mossgreen’) is an auction-house that went into liquidation on 4 May 2018. Previously, administrators had been appointed to Mossgreen on 21 December 2017.

Mossgreen conducted a high-profile auction-house and gallery. In carrying on its business as an auctioneer, it held a large quantity of goods (the ‘consigned goods’) belonging to other people (the ‘consignors’). The consigned goods consisted of:

(a) goods delivered to it to be auctioned, but which had not yet been auctioned;

(b) goods delivered for auction, but which had failed to sell and which were awaiting collection by their owners; and

(c) goods which, although successfully sold at auction, had not been collected by the successful bidders.

Mossgreen had three warehouses in which it stored goods belonging to the consignors. Sobraz Pty Ltd (‘Sobraz’), the plaintiff in the application before me, is the landlord of one of these warehouses, which is situated at 1 Torteval Place, Clayton.

Upon appointment, the administrators undertook a stocktake of the goods held by Mossgreen at a cost in excess of $1 million.

The administrators then sought to levy each consignor with the sum of $353.20 per lot as a condition for releasing the lot to the consignor. The administrators asserted that…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2018] VSC 230
Decision Date: 9 May 2018

CaseChat Overview and Summary

The case of Re Mossgreen Pty Ltd (in liquidation) involved a dispute between the liquidators of the company, Mossgreen, and the plaintiff, the landlord of a warehouse where Mossgreen stored goods for auction. The liquidators did not intend to return the stored goods to the customers, prompting the landlord to apply for the appointment of a receiver to facilitate the return of the goods to their rightful owners. The landlord argued that the appointment of a receiver would assist in the enforcement of the owners' rights under the Australian Consumer and Fair Trading Act 2012 (Vic), allowing them to obtain their goods without additional charges and delays.

The central legal issues addressed by the court were whether the appointment of a receiver was appropriate under the Supreme Court Act 1958, the inherent jurisdiction of the court, or if the Australian Consumer and Fair Trading Act 2012 (Vic) provided a more suitable mechanism for the owners to recover their goods. The court had to balance the rights of the owners to retrieve their goods against the potential additional costs and delays that might arise from appointing a receiver.

In delivering its decision, the court noted that while the appointment of a receiver could assist in the enforcement of the owners' rights, it could also add to the charges the owners must pay and delay the retrieval of their goods. The court held that the Australian Consumer and Fair Trading Act 2012 (Vic) provided an existing framework for owners to obtain their goods, which included a cost-effective and timely process. The court found that appointing a receiver would not be in the best interests of the owners and refused the landlord's application.

The court emphasised that the owners of the goods had the opportunity to exercise their rights under the Australian Consumer and Fair Trading Act 2012 (Vic) without the costs and delays associated with the appointment of a receiver. The refusal of the application for the appointment of a receiver was based on the premise that the existing statutory framework provided a more appropriate and efficient means for the owners to recover their goods.

Orders