In the matter of Plantation Outdoor Kitchens Pty Ltd (In Liq) [2019] NSWSC 925

Supreme Court New South Wales

Medium Neutral Citation: In the matter of Plantation Outdoor Kitchens Pty Ltd (In Liq) [2019] NSWSC 925 Hearing dates: 12 July 2019 Date of orders: 19 July 2019 Decision date: 19 July 2019 Before: Ward CJ in Eq Decision: (1) Direct, pursuant to 90-15(1) of the Insolvency Practice Schedule (Corporations), being Schedule 2 to the Corporations Act 2001 (Cth), that the plaintiff is justified in acting on the basis that, in respect of the Category A Stock items described at [47(a)] of the liquidator's affidavit, title has passed to a customer who has paid for a stock order in full and to whom items had been allocated/appropriated to the customer within the physical stock inventory located at the Company's warehouse at the date of the appointment of the administrator; subject to the orders below in respect of the payment of a levy. (2) Direct, pursuant to 90-15(1) of the Insolvency Practice Schedule (Corporations), being Schedule 2 to the Corporations Act 2001 (Cth) or ss 63 and 81 of the Trustee Act 1925 (NSW), that the plaintiff is justified in acting on the basis that, in respect of the Category B Stock items described at [47(b)] of the liquidator's affidavit, that title has passed to each customer who has paid for a stock order in full (notwithstanding that there are insufficient items in stock to satisfy the stock order in full) in respect of any item(s) that had been allocated/appropriated to the customer within the physical stock inventory located at the Company's warehouse at the date of the appointment of the administrator; subject to the orders below in respect of the payment of a levy. (3) Direct, pursuant to 90-15(1) of the Insolvency Practice Schedule (Corporations), being Schedule 2 to the Corporations Act 2001 (Cth) or ss 63 and 81 of the Trustee Act 1925 (NSW), that the plaintiff is justified in acting on the basis that, in respect of the Category C Stock items described at [47(c)] of the liquidator's affidavit, that title has passed to each customer who has paid for a stock order in full and to whom items had been allocated/appropriated to the customer within the physical stock inventory located at the Company's warehouse at the date of the appointment of the administrator, on the basis of a first in time allocation of that stock; subject to the orders below in respect of the payment of a levy; and that in respect of any Category C Stock in which there has been no allocation/appropriation to an individual customer, that title has passed to a group of customers who have paid for a stock order including that item in full (but in respect of which there are insufficient items in stock to satisfy the stock order in full) and in selling those items in stock and making a distribution of the proceeds pari passu to those customers, subject to any other orders in respect of the payment of a levy. (4) Direct, pursuant to 90-15(1) of the Insolvency Practice Schedule (Corporations), being Schedule 2 to the Corporations Act 2001 (Cth), that the plaintiff is justified in acting on the basis that, in respect of the stock items in categories A, B and C described in the above orders, title has passed to a customer, in the circumstances of the above orders, notwithstanding that security interests over those stock items have been registered under the Personal Property Securities Act 2009 (Cth) (PPSA). (5) Further to Order 4 above and pursuant to s 442C(2)(c) of the Corporations Act 2001 (Cth), grant leave to dispose of such property of the Company that is subject to a security interest under the PPSA. (6) Direct, pursuant to 90-15(1) of the Insolvency Practice Schedule (Corporations), being Schedule 2 to the Corporations Act 2001 (Cth) or ss 63 and 81 of the Trustee Act 1925 (NSW), that the plaintiff is justified in acting on the basis that, in respect of any stock item, the stock item has been allocated/appropriated to a customer if the stock item bears a label placed on it by the Company identifying the customer. (7) Direct, pursuant to 90-15(1) of the Insolvency Practice Schedule (Corporations), being Schedule 2 to the Corporations Act 2001 (Cth) or ss 63 and 81 of the Trustee Act 1925 (NSW) that: (a) the plaintiff is justified in acting on the basis that he is entitled to a lien for expenses incurred in the identification, preservation and distribution of stock items; (b) the plaintiff is justified in acting on the basis that he has an entitlement to an indemnity in equity out of stock items for reasonable expenses incurred in the identification, preservation and distribution of stock items; (c) the plaintiff is justified in requiring payment of a levy by customers to whom title in stock items has passed, payable prior to the release of such stock to those customers, representing the plaintiff's reasonable expenses incurred in the identification, preservation and distribution of those stock items as specified, and in the proportions as set out, in these reasons; (d) the plaintiff is justified in distributing stock items to a customer where; (i) title has passed to that customer; (ii) the stock items are collected within 14 days from the date of these directions; and (iii) the customer has paid to the plaintiff a sum of money or levy representing the reasonable expenses incurred by him in the identification, preservation and distribution of the stock items in accordance with Order 7(c). (e) the plaintiff is justified in: (i) selling any stock items, within Category C where; a. the stock item has not been physically allocated to a particular customer order and the item is one in a stock item category in respect of which more than one customer has paid for such an item; and b. there are insufficient (unallocated) stock items on hand to satisfy all of the orders placed by the customers. (ii) deducting from the sale proceeds a levy in the proportions as set out in these reasons; and (iii) making a distribution of the balance of the sale proceeds pari passu to those customers; (f) the plaintiff is justified in disposing of any stock not collected in accordance with Order 7(d) within 14 days of the plaintiff providing written notice to the customer of his intention to do so, in accordance with the orders of the Court and to recover the expense incurred by the plaintiff in the identification, preservation, distribution and disposal of that stock from the proceeds of sale in accordance with Order 7(c); (g) the plaintiff is justified in requiring payment of a levy by secured creditors to whom title in stock items has remained, being the stock items in Category E (described at [47(e)] of the liquidator's affidavit), payable prior to the release of such stock to those secured creditors, representing the plaintiff's reasonable expenses incurred in the identification, preservation and distribution of those stock items as specified, and in the proportions as set out in these reasons. (8) Order that notice of Order 7(e) be given by text message to mobile phone or landline numbers or by email. (9) Direct that the plaintiff notify affected parties of the final orders, by: (a) uploading a copy of the final orders to www.worrells.net.au/plantationoutdoorkitchens; (b) with respect to customers for whom the plaintiff has mobile numbers, by sending the following text message: "Plantation Outdoor Kitchens P/L (in Liq): The Supreme Court has made final orders in relation to the Liquidator's application. Customers are directed to the following website www.worrells.net.au/plantationoutdoorkitchens to obtain a copy of the orders"; (c) with respect to customers for whom the plaintiff has landline numbers, by a computer generated message (text to voice message) to the landline number, in the same terms as the message set out in Order 8(b) above; (d) with respect to suppliers with retention of title claims that are registered on the Personal Property Securities Register, by sending a letter attaching the orders, by email, to those suppliers; and (e) with respect to customers for whom the plaintiff has email addresses, by sending a letter attaching the orders, by email, to those customers. (10) Grant liberty to any interested person including those claiming an interest in a stock item to apply within 7 days on 48 hours' notice. (11) Stay the operation of the above orders for 7 days. (12) Order that the plaintiff be indemnified from the Company's assets for the costs of these proceedings. (13) These orders be entered forthwith. Catchwords: CIVIL PROCEDURE — Originating process — Liquidated claim – where a retail business supplying barbeque equipment and outdoor appliances went into liquidation – whether title to stock held by the company had passed to customers – whether the liquidator was justified in charging a levy to customers and suppliers for the expenses incurred in identifying, preserving and distributing the stock Legislation Cited: Corporations Act 2001 (Cth), ss 9, 436A, 439A, 600K, Sch 2 Insolvency Law Reform Act 2016 (Cth) Personal Property Securities Act 2009 (Cth), ss 46 and 47 Sale of Goods Act 1923 (NSW), ss 5, 21, 22, 23, 28 Storage Liens Act 1935 (NSW), s 4 Trustee Act 1925 (NSW), ss 63, 81 Warehouse Liens and Storage Act 1990 (SA) Cases Cited: Albemarle Supply Co Ltd v Hind & Co [1927] All ER Rep 401 at 406; [1928] 1 KB 307 Bob Jane Corp Pty Ltd v Barrot FT Pty Ltd [2010] SASC 220; (2010) 271 LSJS 211 Commonwealth Bank of Australia v Butterell (1994) 35 NSWLR 64 Crouch v Abell; Application of Crouch [2005] NSWSC 1308 Crouch v Adams [2006] NSWSC 1029 Falcke v Scottish Imperial Insurance Co (1886) 34 Ch D 234 In the matter of Renovation Boys Pty Ltd (admins apptd) [2014] NSWSC 340 International Art Holdings Pty Ltd (admin apptd) v Adams [2011] NSWSC 164; (2011) 85 ACSR 1 Re Universal Distributing Co Limited (in liquidation) (1933) 48 CLR 171; [1933] HCA 2 Shirlaw v Taylor (1991) 31 FCR 222 Stewart v Atco Controls Pty Ltd (In Liquidation) (2014) 252 CLR 307; [2014] HCA 15 White, in the matter of Mossgreen Pty Ltd (Administrators Appointed) [2018] FCA 471; (2018) 125 ACSR 163 White, in the matter of Mossgreen Pty Ltd (Administrators Appointed) v Robertson [2018] FCAFC 63 Texts Cited: Michael Bridge (ed), Benjamin's Sale of Goods, (8th ed 2010, Sweet & Maxwell/Thomson Reuters) Category: Principal judgment Parties: Christopher Damien Darin in his capacity as liquidator of Plantation Outdoor Kitchens Pty Ltd (In Liquidation) (Plaintiff) Carolyn Burgemeister (Interested Party) Representation: Counsel: GD McDonald (Plaintiff) C Burgemeister (Interested Party) (Self-represented)