Mossgreen

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After another spray from the Federal Court, the Mossgreen administrators have thrown in the towel, telling the no-pushover owners of $5 million worth of art and antiques that their insurance coverage had lapsed.
The letter sent by the BDO administrators on Anzac Eve stunned clients, already angered at the way the administration had been undertaken ever since their appointment just prior to Christmas. 
BDO have advised the auction house clients to help themselves to their stored contents, though not to come through the besieged accountancy firm which had expended a $1 million stocktake that the Federal Court described as "intermeddling".
BDO sent an update today to consignors of Mossgreen. The second creditors' meeting has been decided as May 4. Secured creditors have been advised their payment is likely to be 2 cents in the dollar.
"The voluntary administrators are without funds to meet the ongoing expenses of preserving and facilitating the return of goods," James White, the admonished BDO administrator advised all Mossgreen clients by email on Thursday.
"Consequently, the voluntary administrators are no longer in a position to retain the company’s remaining two leasehold premises and have no alternative but to arrange for possession of those premises to be returned to their respective landlords, as of close of business, Monday, 23 April 2018.
Click here <a href="https://www.propertyobserver.com.au/images/2018/4/24/MOSS_LETTER.jpg" target="_blank">to enlarge.</a>
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"It will now be up to the landlords of those premises to co-ordinate the return of your consigned goods.
"Please contact the relevant landlord," the long suffering Mossgreen clients were told.
At the time of issuing the correspondence, the landlord for the Clayton warehouse indicated that he will seek to contact consignors directly in relation to the return of their consigned items.
BDO offered no indication of the return process of the former High Street headquarters.
"We remain in discussions with the landlords regarding how we might be able to assist them with the goods collection process, and to make available the work we have done to date to bring order to that process."
"However, you will appreciate that as we are without funds, we can no longer maintain insurance in respect of the consigned goods.
"We strongly recommend that you immediately ensure that you have your own insurance in place," White said.
One client indicated the "BDO's bloody-mindedness will tip the scales to ensuring state government's move to ensure in future that auction houses are covered by trust fund style regulations."
Mossgreen clients hope both landlords are disposed to readily assist in the return of the goods and chatels. Property Observer anticipated the landlords would become key stakeholders <a href="https://www.urban.com.au/news/82714-stored-mossgreen-art-and-antique-rental-liability-issue-flares" target="_blank">in our reportage last week</a>.
BDO never provided "any satisfactory explanation" as to why they did not adopt a "common-sense approach" on an earlier quick return of the $5 million in art and antiques caught in the Mossgreen administration, the Federal Court of Appeal noted earlier this week.
The now published judgement that admonished BDO came after BDO was thrawted in its attempt to impose a hefty fee on all clients of the collapsed auction house, as they sought to recoup the $1 million in expenses undertaken without reference to the courts.
The fee often was more than the content's value.
The initial judgement by Federal Court judge Nye Perram ruled the BDO administrators were <a href="https://www.urban.com.au/news/82407-bdo-told-to-stop-intermeddling-in-mossgreen-client-goods" target="_blank">"in</a><a href="https://www.urban.com.au/news/82407-bdo-told-to-stop-intermeddling-in-mossgreen-client-goods" target="_blank">termeddling" in other people's goods in circumstances</a> "where they had not been invited to do so, were not performing their statuatory functions and had not been appointed receivers."
While not agreeing to the entirety of Justice Perram's ruling, the judgement, signed off by the Honourable Chief Justice Allsop and Justices Banks-Smith and Colvin, reiterated the error in BDO's administration.
The judges noted given that the BDO administrators only sought directions after the event, in effect to approve the course that they had already undertaken.
It was initially estimated that Mossgreen held in excess of 10,000 items on consignment, held across three premises in Victoria, their High Street, Armidale premises, a site in NSW on Queen Street, Woollahra and a third party warehouse in Clayton, Victoria.
The goods were classified into the following categories:
1.    Items sold at auction prior to our appointment and not yet collected by purchasers;
2.    Unsold items of recent auctions held on consignment on behalf of vendors;
3.    Items held on consignment for future auctions;
4.    Items abandoned by purchasers and vendors;
5.    Items stored at the Company’s warehouse awaiting collection by vendors; and
6.    Artwork consigned to the Company to hang in the gallery.
The stocktake identified that Mossgreen retained 6,935 lots (or 4,663 lots excluding stamps and coins) on behalf of in excess of 800 consignors (or in excess 600 consignors excluding stamps and coins).
After including abandoned items, and allowing for the prospect that owners of such items were unlikely to make claims, the judges noted it could be seen that the extent of claims by individual owners to the return of individual items was not as overwhelming a task as BDO advised.
The total cost of the stocktaking exercise was $1,048,072. It comprised the following: wages of $240,747 as of the company’s 36 employees, after 19 were terminated in January 2018, the remainder were kept on.
An amount of $180,075 had been included for rent. An amount of $54,000 was included for insurance and $45,849 was included for security.
There was $122,605 allocated for the costs of engaging the Tiger stocktake company to undertake a complete stocktake of all consigned goods. 
Some $72,500 had been included for legal costs for obtaining advice as to consignor Tasks and seeking directions from the court.
Fes for the administrators were put at $126,551 and disbursements of $11,033 to 31 January 2018.
Actual administrator’s costs from 1 February 2018 to 16 March 2018 have been $200,715.
All of the above were based on estimates to 31 March 2018. 
The names of the art and antique creditors are a who's who from across Australia, ranging from passionate collectors, socialites, low key business tycoons to deceased estates.
<a href="https://www.urban.com.au/news/79466-caterer-peter-rowland-ranks-among-the-mossgreen-auction-house-administration-creditors" target="_blank">Caught amid the clients</a>, were Sydney's society Coppleson family listed as owed $465,000, the third highest-owed creditor.
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BDO says Mossgreen contents are now uninsured after copping a Federal Court shellacking 

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Paul Sumner's Mossgreen art auction house has debts of $12 million, its administrators BDO told the first creditors' meeting.
There were 400 creditors owed money, with 50 turning up to yesterday's meeting.
Toorak businessman Jack Gringlas​ confirmed to Fairfax Media that his family company was the biggest creditor, being owed $6 million. 
It is understood that Mossgreen owes its vendors $5.8 million, with the remainder owed to unsecured trade creditors.
A recent auction vendor is owed $400,000 from sold art and furniture, with another owed $250,000.
Creditors will vote at a second meeting whether to liquidate Mossgreen or be restructured so it can continue.
Property Observer understands the second creditors' meeting will be held around February 7 or 8 where Paul Sumner will have provided the administrator and creditors with his proposed scheme of arrangement offer.
The meeting was advised the company assets were $3 million.
Auctions scheduled for its Armadale premises will reportedly proceed in February, but Sydney's Woollahra will close indefinitely. 
Mossgreen's Auckland office will re-open.
Gringlas, a Mossgreen director for four years until June 2017 when he sold his shares to Paul Sumner and his wife Amanda Swanson, said he was upset and frustrated. 
Asked the about creditors' chances of getting their money back, Mr Gringlas noted Sumner had "written to every vendor and told them they're going to get 100 cents in the dollar ... that he is putting in place arrangements to ensure that they all get paid".
"So he must believe it. I don't know where that money is coming from because there isn't the money in the company, so I can only assume he's planning to bring more money into the company."
Gringlas <a href="https://www.urban.com.au/expert-insights/investing/72946-former-armadale-theatre-building-sold" target="_blank">sold the leased High Street, Melbourne premises</a> mid-last year for around $10 million to John Karkar.
The administration came late last month.
<a href="https://www.urban.com.au/news/79268-mossgreen-under-administration" target="_blank">The move came December 21</a> with the appointment of three administrators from accountants BDO, James White, Nicholas Martin and Andrew Sallway. 
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It followed failed fundraising attempts in early December. 
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<div>One of the recent major contents auction was for the contents in the Macleay Regis penthouse, home of the late esteemed gynaecologist Professor Malcolm Coppleson and his late wife, Patricia, who was Vogue Living’s editor-at-large.</div>
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The 172 lots (pictured onsite) included the sale of a $192,200 Ian Fairweather work which had an $80,000 to $120,000 price guidance. A Tim Maguire fetched $117,800.
Its most recent auction on December 7 was contents of Dr John Sheehy and Jean Sheehy with just 274 of the 438 lots being sold.
Sumner blamed the current circumstance on growing "a little bit fast."
In 2013, Mossgreen acquired coin, stamp and memorabilia experts Charles Leski Auctions and in 2015 acquired New Zealand auction house Webb's.
It was a capital injection from wealthy former engineer Jack Gringlas that effected the merger with stamps and collectibles firm Charles Leski, followed by the Gringlas purchase of Sotheby’s former long-time saleroom in Melbourne’s upmarket Armadale with Mossgreen relocating from Toorak Road, South Yarra.
In September last year Gringlas, a self-described passionate stamp collector, advised the stampboards website that "both Charles Leski and I have sold our shares to Paul Sumner."
"There is nothing unusual about this, just part of my transition to retirement planning, whereby I am reducing the number of active boards that I sit at.  "I am mainly focused on my finance business, working with my son to grow a significant mortgage investment business for commercial loans, together with managing a number of other business investments."
In an Australian Financial Review profile in 2016, Sumner said Mossgreen's turnover grew from about $10 million before the Leski merger to $39.6 million in 2015, with staff numbers jumping from eight to 55. 
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Auction house Mossgreen owes $5.8 million to antique vendors

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Auction houses are understandably fielding inquiries as to whether they keep client money in an audited trust account ever since the collapse last December of Mossgreen.
Sotheby’s, Bonhams, Menzies and Deutscher and Hackett say they do – although there is no industry standard.
“Trust accounts should absolutely be a requirement,” Chris Deutscher of Deutscher and Hackett has told The Australian Financial Review.
“The law should be changed, we’ve just seen the reason why.”
The Australian Financial Review Magazine has revealed that Paul Sumner's Mossgreen lost money for five years before it went under last December.
Its client account, where funds from auctions were held before being disbursed to vendors, had a shortfall back to December 2013, it reported this week, having previously reported, in a 2016 Australian Financial Review profile, that Mossgreen's turnover had impressively grown from about $10 million in 2013 to $39.6 million in 2015. 
But the paper now reports Mossgreen’s competitors – Sotheby’s, Deutscher and Hackett, Menzies, Bonhams – had for years "wondered how the company was staying afloat and keeping on the lights in its sumptuous Melbourne and Sydney showrooms."
At its peak in early 2017, Mossgreen had 55 staff, almost double Sotheby’s which auctioned three times as much.
The paper suggested Mossgreen had some blockbuster auctions, that "raised only a few hundred thousand dollars, well below the $1 million that industry veterans say is needed for an auction to make money."
“It can cost you as much to auction off a $600 piece of Royal Doulton as it does to sell a $10,000 painting,” noted Mark Fraser, who suggested Mossgreen had spent too much on its premises.
“If you’ve got good stuff to sell, you can sell it in a tin shed, you don’t need fabulous auction rooms,” the former chairman of auction house Bonhams, Fraser, and now an independent art consultant said.
Sumner started Mossgreen in 2004 by briefly selling artworks from the walls of his rented Macleay Regis, Potts Point apartment, the same building as the Sydney society family, the Copplesons’ who were among his final auction content vendors.
Mossgreen contractually paid clients after 60 days, double the standard 30 days.
It used money in its client account as a spare line of credit with the shortfall, according to two of the AFR sources, growing.
An ownership change inside Mossgreen’s business in July meant the shortfall became a big problem, it noted.
It was when Jack Gringlas sought to stop funding its losses. By 2017 he had lent $6 million to Mossgreen.
In 2013 he invested $1.6 million into Mossgreen in return for 40 per cent equity. Charles Leski bought 20 per cent, leaving Sumner with the rest.
Last July Gringlas and Leski sold their combined 60 per cent to Sumner for $2.4 million, the same price they had paid.
Gringlas agreed he could pay in four years’ time and reportedly also gave Sumner two years to find new backers so Mossgreen could pay back the $6 million.
Documents obtained by Property Observer indicated Paul Sumner's auction house owes its auction vendors $6.8 million, which is $1 million more than administrators calculated ahead of the first creditors' meeting last month.
Toorak businessman Jack Gringlas​ remains the biggest secured creditor, being owed $6 million. 
The administration <a href="https://www.urban.com.au/news/79268-mossgreen-under-administration" target="_blank">came December 21</a> following failed fundraising attempts.
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Sumner, who did not attend the first meeting, blamed the current circumstance on growing "a little bit fast."
There were 330 creditors initially identified <a href="https://www.urban.com.au/news/79328-auction-house-mossgreen-owes-5-8-million-to-antique-vendors" target="_blank">at the meeting</a> who were <a href="https://www.urban.com.au/news/79467-creditors-told-no-law-required-trust-accounts-before-mossgreen-administration" target="_blank">told no law required trust accounts for the auction proceeds</a>.
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The names of the creditors are a who's who from across Australia, ranging from passionate collectors, socialites, low key business tycoons to deceased estates.
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The biggest unsecured creditor stemmed from the auction of a book collection.
Some $1.75 million is owed to the family of <a href="http://www.mossgreen.com.au/content/event/the-collection-of-martin-copley-am/" target="_blank">the late wealthy insurance underwriter Martin Copley</a> who auctioned off the books in October.
His auction items included John Gould's monumental The Birds of Australia, a large folio in eight volumes with 681 hand-coloured lithographed plates, bound in dark green morocco by Riviere, an original subscriber's set, which sold at $446,400 including premium.
The second biggest client was another deceased estate, that of the late South Australian building industry icon Alan Hickinbotham and his late wife Margaret. 
It was billed as the highest value collection ever to be sold in Adelaide when auctioned in May by Mossgreen's chief, Paul Sumner.
Sydney's society Coppleson family were listed as owed $465,000, the third highest-owed creditor.
It followed the sale of the contents of the Macleay Regis penthouse, home of the late esteemed gynaecologist Professor Malcolm Coppleson and his late wife, Patricia, who was Vogue Living’s editor-at-large.
The 172 <a href="http://www.mossgreen.com.au/content/event/the-malcolm-and-patricia-coppleson-collection/" target="_blank">lots included </a>the sale of a $192,200 Ian Fairweather work which had an $80,000 to $120,000 price guidance. A Tim Maguire fetched $117,800.
Mossgreen's last auction on December 7 last year was the contents of the Sheehy family with just 274 of the 438 lots being sold. The family, who are owed $45,000, inquired at the meeting whether Sumner's passport would be surrendered.
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Mossgreen was losing money for five years before collapse

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Peter Rowland, the Melbourne society catering company ranks among the top six unsecured creditors, after the auction house Mossgreen fell into voluntary external administration last month.
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Mossgreen, known for its Armadale tea rooms at 926-930 High Street, and single-owner house content sales, owes $5.8 million to auction clients, plus $6 million to its secured creditor, the former part-owner, Jack Gringlas.
The assets have been advised as $1.6 million in the bank and $1.2 million owed by auction lot buyers.
Around $166,000 is owed to the catering company who sent its executive director Steven Abela to the first creditors' meeting. There were 330 creditors identified <a href="https://www.urban.com.au/news/79328-auction-house-mossgreen-owes-5-8-million-to-antique-vendors" target="_blank">at the meeting last week</a> who were <a href="https://www.urban.com.au/news/79467-creditors-told-no-law-required-trust-accounts-before-mossgreen-administration" target="_blank">told no law required trust accounts for the auction proceeds</a>.
The names of the creditors are a who's who from across Australia, ranging from passionate collectors, socialites, low key business tycoons to deceased estates.
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The biggest unsecured creditor stemmed from the auction of a book collection.
Some $1.75 million is owed to the family of <a href="http://www.mossgreen.com.au/content/event/the-collection-of-martin-copley-am/" target="_blank">the late wealthy insurance underwriter Martin Copley</a> who auctioned off the books in October.
The British-born Copley, but Perth-based businessman, remembered for founding the Australian Wildlife Conservancy (AWC), died in 2014.
His auction items included John Gould's monumental The Birds of Australia, a large folio in eight volumes with 681 hand-coloured lithographed plates, bound in dark green morocco by Riviere, an original subscriber's set, which sold at $446,400 including premium.
Martin's daughter, Sophie Chamberlain sits on the board of AWC.
The second biggest client was another deceased estate, that of the late South Australian building industry icon Alan Hickinbotham and his late wife Margaret. 
It was billed as the highest value collection ever to be sold in Adelaide when auctioned in May by Mossgreen's chief, Paul Sumner.
The family are still owned somewhere between $960,000 and $1.2 million. The sold works included a Russell Drysdale, Grandma’s Sunday Walk, which had an estimated value of $1.8 million to $2.2 million. It was one of the last masterpieces painted by acclaimed Australian artist just before he lost his eyesight — selling for $2.97 million, the fifth-highest price for any Australian artwork at auction.
The total collection in <a href="http://www.mossgreen.com.au/content/event/hickinbotham-collection/" target="_blank">the Unley Park home</a> sold for $4.35 million.
Sydney's society Coppleson family were listed as owed $465,000, the third highest-owed creditor.
It followed the sale of the contents of the Macleay Regis penthouse, home of the late esteemed gynaecologist Professor Malcolm Coppleson and his late wife, Patricia, who was Vogue Living’s editor-at-large.
The 172 lots (<a href="http://www.mossgreen.com.au/content/event/the-malcolm-and-patricia-coppleson-collection/" target="_blank">pictured above onsite</a>) included the sale of a $192,200 Ian Fairweather work which had an $80,000 to $120,000 price guidance. A Tim Maguire fetched $117,800.
Trevor Chappell, the Sydney-based property developer, is owed $130,000, having developed a strong appreciation of Aboriginal art with wife, Carole before they then diversified into modern Western art. The works were initially displayed at the couple's Sydney home but as the collection grew it went on show at the company's offices and then toured community groups across Australia.
The collection was offered following a review of the Chappell family's estate planning.
Mossgreen's most recent auction on December 7 last year was the contents of the Sheehy family with just 274 of the 438 lots being sold. The family, who are owed $45,000, inquired at the meeting whether Sumner's passport would be surrendered.
<a href="https://www.mossgreen.com.au/content/event/the-ralph-drexel-collection-online-part-6/" target="_blank">Ralph Drexel</a> was listed as being owed $43,000.
<a href="https://www.propertyobserver.com.au/https://www.mossgreen.com.au/m/view-auctions/catalog/id/472?page=2&amp;cat=1056" target="_blank">The Jelbart family</a> were owed $50,000 after the sale of the contents of the trophy Eltham home, Kinloch.
Torbjorn Von Strokirch is owned $225,000.
Perth socialite Rhonda Wyllie is owed $145,000. Ruth Rosalion owed $43,000.
Leonie Weldon ranks among the creditors owned $32,000. 
Tom Frommer is owed $17,000. <a href="http://www.mossgreen.com.au/content/event/tom-frommers-airmails-part-ii-famous-pilots-famous-flights-international-australia-new-guinea-papua/" target="_blank">Frommer's collection of pioneer Australian air mails</a> was billed as one of the more important events in the philatelic calendar.
Deeta McGeogh, Michele Asprey, Patsy Kentwell, Vernia Bullivant, Bill Curry, and Ellen Kronen (the Waterhouse family collection) were owned between $1000 and $10,000.
Likewise Rex Dupain after the sale of <a href="http://www.mossgreen.com.au/content/event/the-max-dupain-collection-2/" target="_blank">Max Dupain works</a>.
Sam Gazal, Judy Roach, Michael Greenhalgh and Manuela Bennett are among the creditors owed $1000 or less. There was also Garry Hounsell.
John Gould was owed $862. 
Paul Sumner, who opted not to attend the meeting, and his fellow director, and wife, Amanda Swanson were listed as being entitled to $470.
<a href="https://www.urban.com.au/news/79268-mossgreen-under-administration" target="_blank">Sumner, the son of art and antique dealers</a>, took his first auction at age 17.
Judi Hausmann appears on the creditors list without any amount showing, as did Antony Loneragan.
Businesses owed money include Grace Worldwide owed $43,000, Courtney Colour catalogues $62,000 plus, Talisman Art owed $176,000, Exhibitions &amp; Trade Fairs owed $90,000 and the ad agency Spinach owed $50,000.
Brooklands Classic Cars owed $48,000 has asked the BDO administrators to seek out the motor car trader guarantee fund.
After attracting financial backing from Melbourne developer Mohan Du, Peter Rowland Catering, Melbourne’s longest running hospitality group, was acquired by investment firm Capital Alliance last September, allowing it to continue trading after personal circumstances and poor management had resulted in it posting financial losses.
The Age reported Peter Rowland Catering had been quietly placed into administration last August.
Rowland <a href="https://www.urban.com.au/news/68452-veteran-melbourne-caterer-peter-rowland-sells-grand-toorak-mansion" target="_blank">sold his $8.6 million Toorak mansion </a>he and his wife had built – "the business paid for the house, so I thought it was right that the house should support the business," he said – and used the money to bail out the beleaguered business.
The catering company employs more than 100 full-time staff and 2000 part-timers throughout the year and Rowland said only about half a dozen jobs had been lost as a result of the acquisition.
After all the catering company turmoil, most of all, Rowland, who remains chairman, but without equity, indicated he wanted to be able look people in the eye.
"I am part of Melbourne. Melbourne is my town," he said.
"I don't want to walk away from it."
 
 
 
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Peter Rowland Catering caught amid the Mossgreen auction house administration creditors

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The besieged administrator of collapsed auction house Mossgreen is seeking court orders to justify its controversial $353 collection levy.
Mossgreen clients and buyers were advised it would continue to hold onto the artwork and collectibles subject to court orders.
BDO has also extended the time for payment of the levy and collection of items from March 10 to March 29.  
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The Australian Financial Review reported ASIC made initial inquiries to BDO about the imposition of the levy after complaints from clients.
<h2>A BDO spokeswoman confirmed BDO was "in dialogue with ASIC".</h2>
<h2>"ASIC has not raised any concerns in relation to the administrators' conduct," she said.</h2>
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"The court will be asked to make directions and orders in relation to the rights and entitlements of creditors and other stakeholders in goods and funds held by Mossgreen.
"Directions will also be sought in respect of the levy that the administrators have charged," she said.
There were 4322 lots remaining, with the levy set to raise a total of $1.5 million.
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<div>If the court decides the levy is excessive, BDO will refund any difference between the levy and the administrators' reasonable costs, the spokeswoman said.</div>
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BDO administrator James White said the amount of the levy was "not negotiable" as "shortfalls risk further losses to the company and its creditors".
He said the costs include wages, rent, security, insurance, legal fees and administrators' time costs and disbursements.
Clients are frustrated about the levy as it is often more than the value of the item.
Creditors have been concerned at the likely costs in seeking various legal judgements too.
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<div>The Victorian Minister for Consumer Affairs Marlene Kairouz said would be consulting with the Commonwealth about whether regulations need tightening.</div>
<div>Clients who consigned multiple items are being billed thousands of dollars.</div>
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"I think it's highway robbery," Tom Lowenstein, the high-profile accountant who helps manage the affairs of artist Charles Blackman told the AFR.
Blackman handed 25 drawings to Mossgreen last year for an auction that was due to occur this month.
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<div>Some 4000 Mossgreen clients whose goods were auctioned are owed $6.8 million.</div>
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Mossgreen administration costs rise as court judgements sought

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BDO has lost another judgement in the ongoing saga of its Mossgreen voluntary administration.
The Federal Court of Appeal knocked out it case this morning, with the reasons yet to be issued.
The return of art and antiques to their vendors/buyers is no sure thing, as the possibility of any unpaid rent could see the High Street, Armadale and Clayton landlords lock up the premises and hold the goods in the worst case scenario.
Click here <a href="https://www.propertyobserver.com.au/images/2018/4/19/courtorder.jpg" target="_blank">to enlarge. </a>
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The matter related to BDO's administration of the Mossgreen goods and chattels, especially costs relating to their storage and insurance.
BDO had been seeking to charge clients of the collapsed auction house for the return of their goods.
Clients were furious at BDO's attempts to charge a fee – levied at $353 per lot – to have their own property returned, especially as some lots were going to cost more for their return that their actual value.
The initial judgement savaged the accountancy firm.
Federal Court judge Nye Perram ruled the administrators were "intermeddling" in other people's goods in circumstances "where they had not been invited to do so, were not performing their statuatory functions and had not been appointed receivers."
"Accordingly, they are not justified in requiring the consignors to pay a levy for the return of their goods," he ruled.
"In reaching this conclusion I have not disregarded what is sometimes referred to as the 'salvage' nature of the work done by external administrators or the concomitant need to ensure that persons are not deterred from doing such work in the future.
"But that well-founded policy consideration cannot provide cover for external administrators who decide to deal in assets of other persons for no reason relating to the administration of which they are seized," the judgement said.
"I conclude, therefore, that the alleged equitable lien does not arise.
"On the other hand, they are entitled to a lien for disposing of goods which ultimately turn out to be unclaimed and they should be entitled to realise those goods and, subject to any claim, apply the proceeds for the purposes of the administration."
The judge has noted the issue of the ongoing storage costs at the Armadale (pictured) and Clayton premises had become the centre of the unravelling legal embroglio.
His honour noted the issue was one of "spot fires' that had arisen during the voluntary administration.
BDO's James White urgently sought by way of interlocutory application a series of directions to protect the besieged accountancy firm in terms of storage rental and insurance costs going forward.
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"The effect of my decision is that the administrators, to the extent that they have been conducting the process of looking after and attempting to return by means of orderly stocktake the consigned goods to the consignors, have acted outside the functions which are conferred on an administrator and, accordingly, they are not entitled to indemnity or remuneration in respect of that," Federal Court judge Nye Perram noted in another judgement.
"The consequence of that conclusion, so far as rent which has been paid in the past is concerned, is that the rent is the administrators’ cost," he noted.
There was a stocktake that cost more than $1 million which Federal Court judge Nye Perram noted could have been court approved if permission had been sought by BDO prior to its undertaking.
The auction house held 1000s of goods belonging to other people, consisting of:
(a)  goods delivered to it to be auctioned but which had not yet been auctioned at the time the administrators were appointed;
(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 yet been collected by the successful bidder.
The initial case judge noted a number of persons whose goods were successfully sold at auction by Mossgreen now claim that the money received by it from their respective purchasers is held on trust for them and is not, therefore, available for general creditors.
The three-cornered contest between the administrators, the trust-asserting consignors and the secured creditor is to be determined by the court later this year.
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</div>
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The besieged administrator of collapsed auction house has yet to advise, today Thursday, when clients and buyers can collect the artwork and collectibles.
<div>
BDO administrator James White had previously said the levy was "not negotiable". 
ASIC has reportedly not yet raised any concerns in relation to the administrators' conduct, but is expected to once the legalities are all done.
The administrators meet quick initial resistance when they told the first meeting of creditors in January that were exploring court judgements on whether a constructive trust arrangement existed.
Minter Ellison lawyer Lindsay Powers, <a href="https://www.urban.com.au/news/79466-caterer-peter-rowland-ranks-among-the-mossgreen-auction-house-administration-creditors" target="_blank">on behalf of art collector Michele Asprey</a>, suggested "this was the clearest case of a trust relationship he has encountered." 
Michelle Asprey was among those who presented their argument regarding the $353 levy in the recent court case over the proposed BDO fee.
The administration <a href="https://www.urban.com.au/news/79268-mossgreen-under-administration" target="_blank">came December 21</a> following failed fundraising attempts.
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Sumner, who did not attend the first meeting, blamed the current circumstance on growing "a little bit fast."
There were 330 creditors initially identified <a href="https://www.urban.com.au/news/79328-auction-house-mossgreen-owes-5-8-million-to-antique-vendors" target="_blank">at the meeting</a> who were <a href="https://www.urban.com.au/news/79467-creditors-told-no-law-required-trust-accounts-before-mossgreen-administration" target="_blank">told no law required trust accounts for the auction proceeds</a>.
There has yet been a second creditors meeting, given a court extension has been granted.
<div title="Page 5">
The names of the creditors are a who's who from across Australia, ranging from passionate collectors, socialites, low key business tycoons to deceased estates.The biggest unsecured creditor stemmed from the auction of a book collection.
Some $1.75 million is owed to the family of the late wealthy insurance underwriter Martin Copley who auctioned off the books in October.
His auction items included John Gould's monumental The Birds of Australia, a large folio in eight volumes with 681 hand-coloured lithographed plates, bound in dark green morocco by Riviere, an original subscriber's set, which sold at $446,400 including premium.
The second biggest client was another deceased estate, that of the late South Australian building industry icon Alan Hickinbotham and his late wife Margaret.
It was billed as the highest value collection ever to be sold in Adelaide when auctioned in May by Mossgreen's chief, Paul Sumner.
Sydney's society Coppleson family were listed as owed $465,000, the third highest-owed creditor.
It followed the sale of the contents of the Macleay Regis penthouse, home (pictured top) of the late esteemed gynaecologist Professor Malcolm Coppleson and his late wife, Patricia, who was Vogue Living’s editor-at-large.
The 172 lots included the sale of a $192,200 Ian Fairweather work which had an $80,000 to $120,000 price guidance. A Tim Maguire fetched $117,800.
Mossgreen's last auction on December 7 last year was the contents of the Sheehy family with just 274 of the 438 lots being sold. The family, who are owed $45,000, inquired at the meeting whether Sumner's passport would be surrendered.
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BDO lose another Mossgreen administration Federal Court judgement

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The anticipated rescue of auction house Mossgreen is not happening.
Its 330 plus creditors were advised Mossgreen founder Paul Sumner had indicated his proposed deed of arrangement was not proceeding.
Instead Sumner will do everything in his power "to help creditors, to maximise what they receive,’’ he told Fairfax Media.
<div class="cq-article-content-paras section">
Some $5.8 million is owed to clients who sold paintings, books, cars and other collectibles through the company over recent months.
Around 30 of the firm's 40 plus staff were made redundant by administrators on Wednesday.
The remaining staff will do a stocktake of items still being held on premises.
The items are not considered Mossgreen assets having been consigned goods, although their return will be delayed until a full stocktake is complete, a statement said.
</div>
<div class="cq-article-content-paras section">
The former backer Jack Gringlas's Jadig Investments is the major secured creditor.
The secured loan facility from Jadig was provided to fund its expansion with interest being charged at $40,000 a month
The auction house fell into voluntary external administration last month.
</div>
<div class="cq-article-content-paras section">
<div title="Page 5">
Mossgreen, known for its Armadale tea rooms at 926-930 High Street, and single-owner house content sales, owes $5.8 million to auction clients, plus $6 million to its former part-owner, Jack Gringlas.
There were 330 creditors identified <a href="https://www.urban.com.au/news/79328-auction-house-mossgreen-owes-5-8-million-to-antique-vendors" target="_blank">at the meeting last week</a> who were <a href="https://www.urban.com.au/news/79467-creditors-told-no-law-required-trust-accounts-before-mossgreen-administration" target="_blank">told no law required trust accounts for the auction proceeds</a>.
The names of the creditors are a who's who from across Australia, ranging from passionate collectors, socialites, low key business tycoons to deceased estates.
</div>
The biggest unsecured creditor stemmed from the auction of a book collection.
Some $1.75 million is owed to the family of <a href="http://www.mossgreen.com.au/content/event/the-collection-of-martin-copley-am/" target="_blank">the late wealthy insurance underwriter Martin Copley</a> who auctioned off the books in October.
The second biggest client was another deceased estate, that of the late South Australian building industry icon Alan Hickinbotham and his late wife Margaret. 
It was billed as the highest value collection ever to be sold in Adelaide when auctioned in May by Mossgreen's chief, Paul Sumner.
Mossgreen's most recent auction on December 7 last year was the contents of the Sheehy family with just 274 of the 438 lots being sold. The family, who are owed $45,000, inquired at the meeting whether Sumner's passport would be surrendered.<a href="https://www.mossgreen.com.au/content/event/the-ralph-drexel-collection-online-part-6/" target="_blank"> </a>
The collapse of the much heralded restructuring plan means that an earlier hope of the gallery's co-founder to return all vendor money is now uncertain, according to Fairfax Media.
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"When I said that vendor creditors would be paid 100 cents in the dollar and staff would keep their jobs, it was based on a witnessed agreement with the secured creditor," Sumner told The Australian Financial Review on Wednesday.
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<div class="cq-article-content-paras section">
But when previously asked the about creditors' chances of getting their money back, Gringlas had officially noted Sumner had "written to every vendor and told them they're going to get 100 cents in the dollar ... that he is putting in place arrangements to ensure that they all get paid. So he must believe it. I don't know where that money is coming from because there isn't the money in the company, so I can only assume he's planning to bring more money into the company."
Gringlas <a href="https://www.urban.com.au/expert-insights/investing/72946-former-armadale-theatre-building-sold" target="_blank">sold the leased High Street, Melbourne premises</a> mid-last year for around $10 million to John Karkar.
The collapse of this supposed agreement with Jadig Investments, which Sumner declined to detail to The Australian Financial Review, means the distribution of funds is in the hands of administrators.
The inside suggestion is 20 cents in the dollar.
In a statement, the administrators said they would now "begin the process of an orderly wind down of the business. Notwithstanding this, a sale will be considered and expressions of interest shall be sought."
Mossgreen was founded in 2004 by Sumner and wife Amanda Swanson.
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Mossgreen administration gathers no white knight

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BDO, the besieged administrators for Mossgreen, have lost their expensive court case seeking to charge clients of the collapsed auction house for the return of their goods.
Clients were furious at BDO's attempts to charge a fee – levied at $353 per lot – to have their own property returned.
Some lots were going to cost more for their return that their actual value.
The judgement this morning savaged the accountancy firm.
Federal Court judge Nye Perram ruled the administrators were "intermeddling" in other people's goods in circumstances "where they had not been invited to do so, were not performing their statuatory functions and had not been appointed receivers."
"Accordingly, they are not justified in requiring the consignors to pay a levy for the return of their goods," he ruled.
"In reaching this conclusion I have not disregarded what is sometimes referred to as the 'salvage' nature of the work done by external administrators or the concomitant need to ensure that persons are not deterred from doing such work in the future.
"But that well-founded policy consideration cannot provide cover for external administrators who decide to deal in assets of other persons for no reason relating to the administration of which they are seized," the judgement said.
"I conclude, therefore, that the alleged equitable lien does not arise.
"On the other hand, they are entitled to a lien for disposing of goods which ultimately turn out to be unclaimed and they should be entitled to realise those goods and, subject to any claim, apply the proceeds for the purposes of the administration."
The plantiffs are to present short minutes of order giving effect to these reasons within seven days.
As part of the hearing, BDO Australia has asked the Federal Court to rule that all its court costs be paid out of Mossgreen's limited estate.
BDO's administration has previously been embarrassed in February when incomplete official documents were lodged with ASIC, requiring the lodgement of replacement paperwork after Property Observer pointed out the need for the accountancy firm to lodge the full Report as to Affairs from Administrator document.
ASIC was given a 21 page Report as to Affairs from Administrator to upload for public disclosure, not the full 45 page report.
"We lodge what the director provides us with. It is the director’s RATA, not BDO’s," BDO spokeswoman Rosey McGrath advised.
"A RATA with all attachments was subsequently received and lodged yesterday afternoon," she subsequently advised.
The besieged administrator of collapsed auction house Mossgreen had told clients and buyers it would continue to hold onto the artwork and collectibles until payment of the fee was made subject to court orders.
<div>
BDO administrator James White had previously said the amount of the levy was "not negotiable". ASIC has reportedly not yet raised any concerns in relation to the administrators' conduct.
Clients were also furious that the Sydney administrators took the issue to the Sydney Federal Court, and inconvenienced the mostly Melbourne clients.
The administrators meet quick initial resistance when they told the first meeting of creditors in January that were exploring court judgements on whether a constructive trust arrangement existed.
They indicated BDO would likely approach the courts to rule on the matter.
However this course was challenged by Minter Ellison lawyer Lindsay Powers, <a href="https://www.urban.com.au/news/79466-caterer-peter-rowland-ranks-among-the-mossgreen-auction-house-administration-creditors" target="_blank">on behalf of art collector Michele Asprey</a>, who suggested "this was the clearest case of a trust relationship he has encountered." 
The chairman advised that initial legal advice had been obtained and it was considered necessary to obtain directions from the court "due to the various classes of creditors, the estimated shortfall to creditors and the overall complexity of the matter."
The chairman, James White from BDO, however indicated his personal view was that unsold goods held on consignment remained the property of the vendors. 
Michelle Asprey was among those who presented their argument regarding the $353 levy in the actioned court case over the desired BDO fee.
The Australian Financial Review recently revealed that Paul Sumner's Mossgreen lost money for five years before it went under last December.
At its peak in early 2017, Mossgreen had 55 staff.
Sumner started Mossgreen in 2004 by briefly selling artworks from the walls of his rented Macleay Regis, Potts Point apartment, the same building as the Sydney society family, the Copplesons’ who were among his final auction content vendors. The Coppleson family also made representations to Judge Perram.
Documents obtained by Property Observer indicated Paul Sumner's auction house owes its auction vendors $6.8 million, which is $1 million more than administrators calculated ahead of the first creditors' meeting.
There has not been a second creditors meeting yet held, which is another source of bewilderment by the many auction house vendors.
Toorak businessman Jack Gringlas​ remains the biggest secured creditor, being owed $6 million. 
The administration <a href="https://www.urban.com.au/news/79268-mossgreen-under-administration" target="_blank">came December 21</a> following failed fundraising attempts.
<div title="Page 5">
Sumner, who did not attend the first meeting, blamed the current circumstance on growing "a little bit fast."
There were 330 creditors initially identified <a href="https://www.urban.com.au/news/79328-auction-house-mossgreen-owes-5-8-million-to-antique-vendors" target="_blank">at the meeting</a> who were <a href="https://www.urban.com.au/news/79467-creditors-told-no-law-required-trust-accounts-before-mossgreen-administration" target="_blank">told no law required trust accounts for the auction proceeds</a>.
<div title="Page 5">
The names of the creditors are a who's who from across Australia, ranging from passionate collectors, socialites, low key business tycoons to deceased estates.The biggest unsecured creditor stemmed from the auction of a book collection.
</div>
Some $1.75 million is owed to the family of the late wealthy insurance underwriter Martin Copley who auctioned off the books in October.
His auction items included John Gould's monumental The Birds of Australia, a large folio in eight volumes with 681 hand-coloured lithographed plates, bound in dark green morocco by Riviere, an original subscriber's set, which sold at $446,400 including premium.
The second biggest client was another deceased estate, that of the late South Australian building industry icon Alan Hickinbotham and his late wife Margaret. 
It was billed as the highest value collection ever to be sold in Adelaide when auctioned in May by Mossgreen's chief, Paul Sumner.
Sydney's society Coppleson family were listed as owed $465,000, the third highest-owed creditor.
It followed the sale of the contents of the Macleay Regis penthouse, home of the late esteemed gynaecologist Professor Malcolm Coppleson and his late wife, Patricia, who was Vogue Living’s editor-at-large.
The 172 lots included the sale of a $192,200 Ian Fairweather work which had an $80,000 to $120,000 price guidance. A Tim Maguire fetched $117,800.
Mossgreen's last auction on December 7 last year was the contents of the Sheehy family with just 274 of the 438 lots being sold. The family, who are owed $45,000, inquired at the meeting whether Sumner's passport would be surrendered.
</div>
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BDO told to stop intermeddling in Mossgreen client goods

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The creditors who attended the first Mossgreen creditors' meeting last week have been advised no law required trust accounts for the auction proceeds.
The auction house Mossgreen fell into voluntary external administration last month, and its creditors anxiously await a rescue package with the promised full repayment from its founder, Paul Sumner.
Sumner told media outlets - ahead of the 1.30 hour meeting which he did not attend - that no creditor would be out of pocket. 
Inside the meeting there was a sense of forbode.
"Looking at the present figures, it appears that the best case scenario for creditors is no return," one of the despondent 330 creditors represented <a href="https://www.urban.com.au/news/79328-auction-house-mossgreen-owes-5-8-million-to-antique-vendors" target="_blank">at the meeting</a> suggested.
Sumner<a href="https://www.urban.com.au/news/79268-mossgreen-under-administration" target="_blank">, the son of art and antique dealers</a>, said the administration was due to debts following the company's rapid expansion and the withdrawal of its key investor, Jack Gringlas, who is the major secured creditor.
In July last year, Sumner and his wife, Amanda Swanson bought back Gringlas' share of the business.
"Since then, we've been advised to take the [voluntary administration] course, as the best way to clear historical debt – associated with previous investors – out of the business, and restructure the company and move forward," Mr Sumner told his local paper, The Age.
"Not one vendor or one buyer will lose one dollar in this process," he said.
"Mossgreen is a business that relies on trust, so when you do something like this, your reputation will be affected, by how you deal with your vendors and buyers."
“It is the best was to clear historical debt, accrued through previous investors,” Sumner also told the rival Herald Sun.
He even told the Sydney Morning Herald Private Sydney gossip columnist Andrew Hornery: "I want to assure every vendor that they will get their money ... every cent of it."
Mossgreen, known for its Armadale tea rooms at 926-930 High Street, and single-owner house content sales, owes $5.8 million to auction clients, plus $6 million to the former part-owner, Jack Gringlas with interest being charged at $40,000 a month.
<div title="Page 5">
The first creditors' meeting was told the assets were $1.6 million cash in the bank along with $1.2 million owed by auction lot buyers, who have a legal binding contract that can not be terminated by the administrators.
The staff are owed possibly around $1 million. The company's superannuation and tax obligations were indicated as "relatively" up to date.
College Capital came forward at the creditors' meeting asking to be noted as a secured creditor. The secured Westpac amount was a $12,000 credit card facility.
The biggest unsecured creditor stemmed from the auction of a book collection.
</div>
Some $1.75 million is owed to the family of the late wealthy insurance underwriter Martin Copley who auctioned off the books in October.
The first question at the creditors' meeting asked on the status of any auction sale proceeds.
The meeting chairman advised "that the company was not required by law to operate a trust account."
The administrators were exploring whether a constructive trust arrangement existed.
It was likely they would approach the courts to rule on the matter.
This course was challenged by Minter Ellison lawyer Lindsay Powers, <a href="https://www.urban.com.au/news/79466-caterer-peter-rowland-ranks-among-the-mossgreen-auction-house-administration-creditors" target="_blank">on behalf of art collector Michele Asprey</a>, who suggested "this was the clearest case of a trust relationship he has encountered." 
The chairman advised that initial legal advice had been obtained and it was considered necessary to obtain directions from the court "due to the various classes of creditors, the estimated shortfall to creditors and the overall complexity of the matter."
The chairman, James White from BDO, indicated his personal view was that unsold goods held on consignment remained the property of the vendors. 
The chairman indicated the administrators were not planning to hold any auctions. The Queen Street, Woollahra premises were to be vacated. It was the intention of the administrators to advertise the business for sale/retructure. Unsold consignment items will be available for collection from January 15 in an orderly way.
In August The Australian Financial Review reported Mossgreen was shedding more than a dozen staff, adding Sumner advised it is business as usual at the Melbourne-based auction house, "which continues to line up sales at a frenetic pace."
Sumner said the staff restructure reflected the firm's increasing focus on single-owner collections and higher value lots following its expansion in recent years - including the merger with the Charles Leski stamp auction group in 2013 and the takeover of New Zealand's Webb's in 2016.
"We've probably grown a little bit fast considering that the market plateaued," Sumner told the mainstream media late December after the news emerged pre-Christmas on Property Observer of the administrators being called in.
"I'll be the first to say that that's the case," he advised.
"What we're doing now is the opposite. We're restructuring, taking out some of the costs of our business, so that we are a much leaner, healthier business starting from the first of February." 
The media also reported Sumner said Mossgreen did not plan to close any outlets.
The creditors' meeting chairman noted the current situation was that "the company had a high cost base with substantial rent costs, a large number of employees and was funding the losses of the New Zealand business."
The NZ business was indebted to the company for inexcess of $1 million.
"Auction monies were essentially used to fund the working capital and trading losses of the business," the creditors were told by the chairman as he closed the meeting.
Asked by a creditor on the 100% repayment advisory from Sumner, the chairman replied: "This was the view of Mr Sumner and did not reflect the administrators' position."
Creditors departed, concerned that the limited known available proceeds will be reduced by administration fees and court costs.
 
 
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Creditors told no law required auction trust accounts before Mossgreen administration

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BDO never provided "any satisfactory explanation" as to why they did not adopt a "common-sense approach" on the issue of the return of $5 million in art and antiques caught in the Mossgreen administration, the Federal Court of Appeal has noted.
The now published judgement that admonished BDO came after BDO was thrawted in its attempt to impose a hefty fee on clients of the collapsed auction house, as they sought to recoup the $1 million in expenses undertaken without reference to the courts.
The initial judgement by Federal Court judge Nye Perram ruled the BDO administrators were <a href="https://www.urban.com.au/news/82407-bdo-told-to-stop-intermeddling-in-mossgreen-client-goods" target="_blank">"in</a><a href="https://www.urban.com.au/news/82407-bdo-told-to-stop-intermeddling-in-mossgreen-client-goods" target="_blank">termeddling" in other people's goods in circumstances</a> "where they had not been invited to do so, were not performing their statuatory functions and had not been appointed receivers."
The <a href="https://propertyobserver.com.au/forward-planning/investment-strategy/property-news-and-insights/82443-meddling-bdo-appeal-federal-court-mossgreen-loss" target="_blank">BDO appeal indicated</a> that shortly after the appointment of the administrators to Mossgreen, BDO started to receive requests for the return of consigned items.
But instead of seeking directions at that point from the Federal Court about how the employees could be put to work using their specialist knowledge to deal with those requests and return the items to which Mossgreen made no claim, the administrators instead took alternate steps.
These included pursuing a costly stocktake of all consigned items irrespective of their value and whether they had been abandoned. BDO also sought a deed of arrangement or outright sale.
"There seems to be no reason why such requests for returns could not have been dealt with even while those other options were pursued by the administrators," the Federal Court of Appeal noted in today's published judgment.
While not agreeing to the entirety of Justice Perram's ruling, the judgement, signed off by the Honourable Chief Justice Allsop and Justices Banks-Smith and Colvin, reiterated the error in BDO's administration.
"A different course would have been to allow consignors to immediately make claims. 
"Directions could have been sought as to the process to be followed. 
"It may have involved the presentation by owners of statutory declarations, receipts, references to catalogues, descriptions of the items claimed (many of which, due to the nature of Mossgreen’s business, were unique in character and were amenable to ready description by identifying features) and release of items in accordance with usual processes followed by Mossgreen employees.
"Other steps could be taken to deal with items that were identified as having little value or had not been the subject of any claim for an extended period. 
"These steps, if presented to the court, could have been approved by way of directions or as part of a supervised process by which the administrators were appointed as receivers to the goods and many items could have been promptly released at much less cost," the judges ruled.
"No satisfactory explanation was provided as to why such a common-sense approach was not followed, or why it was not possible or not desirable or practicable," the judges noted.
The judges noted detailed affidavits provided by BDO administrator James White provided "no evidence" that he turned his mind to the extent to which the stocktake was needed in order to return most items to their owners (as distinct from providing the administrators with a complete list of all of the items held).
"There is no evidence of any thought process by which he considered the significance of the extent to which the items held were legacy items of little value, the extent to which the stocktake was necessary in order to deal with claims by owners, the extent to which the costs involved were proportional to the value of goods involved, and the likely cost to individual owners if the stocktake was undertaken."
"It is one thing to investigate the inventory management systems. 
"It is a different thing to consider how most efficiently to return the property of third parties to them. 
"The administrators were dealing with property to which the company had no claim," the judges adding the question was not whether Mossgreen had good inventory management systems but whether its existing systems could be used to promptly and cost-effectively return the consigned items to their owners."
The judges noted given that the BDO administrators sought directions after the event, in effect to approve the course that they have already undertaken, so then they must be able to demonstrate that they were justified in what they did.
It was initially estimated that Mossgreen held in excess of 10,000 items on consignment, held across three premises in Victoria, their High Street, Armidale premises, a site in NSW on Queen Street, Woollahra and a third party warehouse in Clayton, Victoria.
The goods were classified into the following categories:
1.    Items sold at auction prior to our appointment and not yet collected by purchasers;
2.    Unsold items of recent auctions held on consignment on behalf of vendors;
3.    Items held on consignment for future auctions;
4.    Items abandoned by purchasers and vendors;
5.    Items stored at the Company’s warehouse awaiting collection by vendors; and
6.    Artwork consigned to the Company to hang in the gallery.
The stocktake identified that Mossgreen retained 6,935 lots (or 4,663 lots excluding stamps and coins) on behalf of in excess of 800 consignors (or in excess 600 consignors excluding stamps and coins).
After including abandoned items, and allowing for the prospect that owners of such items were unlikely to make claims, the judges noted it could be seen that the extent of claims by individual owners to the return of individual items was not as overwhelming a task as BDO advised.
The total cost of the stocktaking exercise was $1,048,072. It comprised the following: wages of $240,747 as of the company’s 36 employees, after 19 were terminated in January 2018, the remainder were kept on.
An amount of $180,075 had been included for rent. An amount of $54,000 was included for insurance and $45,849 was included for security.
There was $122,605 allocated for the costs of engaging the Tiger stocktake company to undertake a complete stocktake of all consigned goods. 
Some $72,500 had been included for legal costs for obtaining advice as to consignor Tasks and seeking directions from the court.
Fes for the administrators were put at $126,551 and disbursements of $11,033 to 31 January 2018.
Actual administrator’s costs from 1 February 2018 to 16 March 2018 have been $200,715.
All of the above were based on estimates to 31 March 2018. 
James White noted that the ongoing cost of following the process that the administrators have adopted is $109,532 per week.
The judges noted that "to put the above estimates in context, Mr White says that he has estimated that Mossgreen held Consignor Property (being all of the property listed after the stocktake) in excess of $5 million in value.
"So, the steps that have been taken by the administrators have resulted in costs, which if charged to consignors, will substantially deplete the value of property to which the administrators lay no claim to at all."
Tye judges considered that there was potentially an entitlement to an equitable lien with respect to work properly done and expenses properly incurred that benefit a consignor by securing and protecting their property that is deposited at the company’s premises until it is returned under an efficient process proportional to the nature of the goods in question. 
"Whether equity would grant such lien and its extent may depend upon the value of the statutory lien and the particular circumstances of the administrators’conduct.
"We do not consider the administrators established a right to a lie as claimed and accordingly the grounds are dismissed
"The administrators have not demonstrated that they are entitled to a lien covering the type of costs and in the amount that they have asserted in their dealings with owners of the consigned items.
"There may be a lien in some amount that might arise in the circumstances of this case.
"However, the Court is now faced with an application for directions blessing conduct of a kind that is not justified on the basis of the nature and extent of the lien advanced to support the judicial directions sought. 
"Further, by reason of the conduct of the administrators in not seeking directions at an early stage when consideration might be given to all options, including issues of proportionality, the extent of any actual difficulties in dealing with the consigned items that might be redressed by the stocktake, the possibility of an appointment as receiver to the goods to implement a plan approved by the Court and an assessment of the likely costs before they are incurred, the Court is not now in a position to make that determination on the evidence presented to support the present application. 
"Owners have been held out of their consigned items for a considerable period and we question whether the administrators would be justified in delaying further the release of consigned items while there is some form of retrospective assessment of the amount of a lien that may be required to be paid as a condition of release of property to the owners."
The appeal should be dismissed, the judges ruled, with further aspects of the administration yet to be decided.
DB Studdy SC with RM Foreman, briefed by King &amp; Wood Mallesons represented BDO. Dr O Bigos, briefed by Piper Alderman, represented the aggrieved Mossgreen clients who have yet to be advised just when they will be able to retrieve what is rightfully theirs.
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The names of the creditors are a who's who from across Australia, ranging from passionate collectors, socialites, low key business tycoons to deceased estates.
Melbourne veteran caterer Peter Rowland was <a href="https://www.urban.com.au/news/79466-caterer-peter-rowland-ranks-among-the-mossgreen-auction-house-administration-creditors" target="_blank">caught amid the clients</a>, with around $166,000 owed to the catering company.
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Sydney's society Coppleson family were listed as owed $465,000, the third highest-owed creditor. Their <a href="https://www.urban.com.au/news/75117-macleay-regis-potts-point-penthouse-for-sale-for-third-time" target="_blank">Potts Point penthouse</a> sold to Gretel Packer for $8.75 million.
</div>
 
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New townhouses

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Developments

New apartments

New townhouses

News