Re Mossgreen Pty Ltd (in liquidation) [2018] VSC 230 (9 May 2018): rights to owners of goods held by liquidator under Australian Consumer and Fair Trading Act 2012

May 14, 2018 |

In Re Mossgreen Pty Ltd (in liquidation) [2018] VSC 230 Robson J considered the application of the Australian Consumer Law as against the operation of the Corporations Act and powers of liquidators.


The auction house operating through the entity Mossgreen Pty Ltd (in liq) (‘Mossgreen’) went into liquidation on 4 May 2018. Administrators had been appointed on 21 December 2017 [1].

As an auctioneer, Mossgreen held a large quantity of goods (the ‘consigned goods’) belonging to other people (the ‘consignors’) described as being:

(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 [2].

which were stored in  three warehouses [3].

Sobraz Pty Ltd (‘Sobraz’), the plaintiff, is the landlord of one of the warehouses, situated at 1 Torteval Place, Clayton [3].

The administrators’ stocktake of the goods cost in excess of $1 million [4]. The administrators sought to levy each consignor with the sum of $353.20 per lot as a condition for releasing the lot to the consignor, asserting an equitable lien [5]. The administrators application for directions from the Federal Court of Australia to the effect that that they were entitled to:

  • a lien for the expenses incurred for the identification, preservation, and distribution of the consigned items
  • impose a levy as a condition of the return of the goods to their rightful owners [6].

Perram J of the Federal Court of Australia held that the liquidators were not justified and the appeal to the Full Federal Court was dismissed [6].

On 23 April 2018, the administrators gave notice to Sobraz under s 443B(3) of the Corporations Act that they did not propose to exercise rights in relation to Sobraz’s warehouse and gave up possession of the warehouse to the landlord [7].

By an originating process dated 1 May 2018, Sobraz applied under s 37(1) of the Supreme Court Act 1986 (Vic), or in the inherent jurisdiction of the Court, for orders, inter alia, that:

  • Andrew William Beck and Ben Charles Verney be appointed as joint and several receivers (‘Receivers’) without security to any goods (‘Goods’) in the premises at Clayton.
  • the Receivers to have the following powers:

(a) to enter into possession and take control of the Goods;

(b) to insure the Goods;

(c) to take on, lease, or hire or to acquire any property necessary or convenient in connection with the carrying on of the receivership;

(d) to appoint a solicitor, accountant, or other professionally qualified person to assist the Receivers;

(e) to appoint an agent to do any business that the Receivers were unable to do, or that it was unreasonable to expect the Receivers to do in person;

(f) to investigate ownership of the Goods;

(g) to prepare and file a report to the Court within seven days outlining the status of the Receivers’ investigations and the Receivers’ proposed approach for the ‘expeditious and cost-effective’ return or sale of the Goods; and

(h) to do all things necessary or convenient to be done for or in connection with, or as incidental to, the attainment of the objectives for which the Receivers were appointed. [8]

On 7 May 2018, Mr Neil Robertson (“Robertson”) sought leave to appear as amicus curiae as he:

  • was a party to the Full Federal Court appeal.
  • had delivered a substantial collection of antique furniture, paintings, drawings, prints, pottery, objets d’art, and other goods to Mossgreen for auction [11]

Robertson’s goods are stored in the Clayton warehouse owned by Sobraz [12].  The court noted that the administrators in giving up occupation of the warehouse also gave up possession of the goods in the warehouse which were now in the possession of Sobraz [16].

Robertson opposed the appointment of a Receiver of the goods on the grounds that  the Australian Consumer Law and Fair Trading Act 2012 (Vic) pt 4.2, titled ‘Disposal of uncollected goods,’ should apply without the appointment of Receivers [13] as defined  under that Act as being:

‘the person who takes possession of goods under a bailment.’

The liquidators informed the Court that:

  • the liquidators do not intend to take any steps in relation to the goods that were consigned to the company but which were no longer in the possession of the company and
  • relied on s 545 of the Corporations Act as they did not have any proceeds with which to carry out any further steps in relation to the goodsformerly in the possession of the company [15].

Robertson sought to exercise his statutory rights under the ACL and opposed the appointment of a Receiver because such appointment will impose an extra layer of charges that the Receivers would seek to recoup from Mr Robertson and others who are entitled to property  stored in the warehouse [24].

Sobraz’s argued that to be able to deal satisfactorily with the goods somebody had to  evaluate and identify the rightful claimants to and owners of the property and the most effective way of doing this is to appoint a Receiver [24].


The court noted that  under s 54 of pt 4.2 of the ACL goods under bailment are uncollected goods if:

the provider has not paid the relevant charge payable to the receiver in relation to the goods within a reasonable time after being informed by the receiver that the goods are ready for delivery.

Robertson, submitted that his goods are not ‘uncollected goods’ within that definition, because:

  • Robertson has not been informed by the ‘receiver’ , Sobraz, that the goods are ready for delivery,
  • the relevant charge under Section 55 payable in relation to the goods had not been calculated or communicated
  • Section 59 provided:

The provider, the owner of the uncollected goods or any other person with an interest in the goods is entitled, on payment of the relevant charge, to delivery of the goods at any time before their disposal [17].

The court stated that:

  • while  Robertson’s goods are not classified as ‘uncollected goods’ he is a person with interests in them.
  • as such, under the statutory scheme he is entitled, upon payment of the relevant charge, to delivery of the goods at any time before their disposal [18].
  • the ‘relevant charge’ is the charge for any carriage or storage of goods or for any repairs, cleaning, treatment, or other work done in connection with the goods in ‘the amount agreed to by the provider and receiver as the charge payable to the receiver’ or, in the absence of an agreement, ‘an amount that is reasonable.’ [19]
  • Robertson would be liable for the cost of storing the goods for the period in which the administrators have no longer been in possession of the goods being 20 April 2018, when they gave notice to Sobraz that they were no longer exercising their rights in relation to the premises.
  • the fee would be the amount that is reasonable for the storage of the goods or other work done in connection with the goods.
  • it is not clear whether any other work has been done in connection with the goods [20].

In reviewing the statutory scheme the court stated that:

  • it provides for certain circumstances in which uncollected goods may be disposed of depending on whether they are:
    • low-value uncollected goods,
    • medium-value uncollected goods, and
    • high-value uncollected goods [21].
  • it provides a scheme not only for the disposal of goods, but for obtaining delivery of goods by a person who has an interest in the goods, if those goods are in the hands of a statutory receiver [22].
  • under Section 57 :

The common law relating to the bailment of goods remains in force to the extent to which it is not affected by this Part and a person is entitled to exercise any rights that the person may have at common law in relation to the recovery of goods or compensation for the loss of or damage to goods except to the extent to which this Part otherwise provides.

  • a court may otherwise order that a further payment be made by the person entitled to the goods in favour of the receiver, Sobraz which under the ACL is defined to include VCAT.

His Honour reviewed the options considered by the Federal Court decision per Perram J which were:

  •  for the administrators,  to appoint themselves as receivers de son tort of the consigned goods where they would take charge of the consigned goods with a view to returning the consigned goods to the consignors [24].
  • for  the administrators could apply to the Court to appoint Receivers of the consigned goods [25].

His Honour while acknowledging clear authority that a Receiver could be appointed  [26]  was concerned that such an appointment would add an extra layer of expense to the operation of the statutory scheme [27]. Accordingly the court found it was  appropriate that Robertson should be able to avail himself of his rights under the ACL without the extra costs of the appointment of Receivers [30].

The court specifically noted that:

  • if Receivers are appointed, they could distribute the goods to the consignors without the necessity that the consignors resort to the ACL [31]
  • at some stage when the statutory scheme has been given a reasonable time to operate it may be appropriate for a Receiver to be appointed [31].
  • Receivers are  subject to the ACL and would would seek the Court’s approval to levy additional charges on the consignors, as a condition of the return of their consigned goods [32].

The Court rejected the application of Sobraz for the appointment of a Receiver and manager over the stock it currently possesses in its warehouse but made it clear that at some future time a further application by Sobraz should not be entertained [33]


While the ACL has been in force for over 5 years it rarely comes into tension with the scope, operation and powers of liquidators under the Corporations Act.  The plaintiff sought a fairly standard approach in dealing with goods held by liquidators.  The court recognised the detailed scheme set out by the ACL to deal with goods held on bailment and refused the application to let the scheme operate.

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