Mossgreen auction
Australian auction house Mossgreen collapsed in December 2017 with the administrators subsequently charging vendors to collect their items. Image: Mossgreen.

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A court hearing in Sydney has now been set for next week where BDO Australia will seek formal approval of their charges of $353.20 (around £200) per lot for vendors to collect their own goods.

The hearing will take place on March 29. Consignors of items that were either unsold or awaiting sale at the time the firm folded in December have been given short notice to arrange their arguments and evidence. They have until 5pm on March 27 to lodge their objections and any documents with the court.

ATG understands that many consignors have engaged lawyers to represent them but individuals can also attend the hearing and give their arguments in person.

BDO’s filed submission ahead of the hearing states that “the process of undertaking the stocktake has been time consuming and costly”.

The presiding judge at the Federal Court in Sydney is Justice Perram and the reference for the proceedings is NSD318/2018.

Court venue

It was originally thought that the case would be heard in Melbourne where Mossgreen’s headquarters and the majority of consignors are located. However, BDO applied earlier this month to have the hearing at the Federal Court in Sydney instead.

BDO had given consignors a four-week period from February 12 to pay the fees and collect or the “goods may be deemed abandoned and may be dealt with as such”. In a large number of cases, the fees being charged far exceed the value of the goods concerned.

Many vendors reacted angrily at the imposition of the fees, while BDO argued that the charges are “to meet the reasonable and properly incurred costs of identifying, preserving, maintaining and facilitating the return of the consigned goods”.

In BDO’s filed submission, the administrators point to the complexity of dealing with the stock and “inadequate labelling” of the items in the company’s possession”.

“The company’s stock management systems were not up to date and could not be relied on to determine stock holdings… There were also lots not recorded in those systems.”

Both consigners and sources with knowledge of Mossgreen operations have told ATG that they dispute this assertion, saying that the company’s records and labelling were actually in good order.

The situation in Australia has been markedly different to the way the administration of Mossgreen-Webb’s in New Zealand has been handled. In this case BDO advised consignors to collect their property with no fees charged, and the assets of the business have now been sold to new owners.