In the matter of International Art Holdings Pty Ltd (admin apptd); International Art Holdings Pty Ltd (admin apptd) v Adams

3. Subject to further order, pursuant to ss 37AF and 37AF(1)(a) of the Federal Court of Australia Act 1976 (Cth), on the ground that the order is necessary to prevent prejudice to the proper administration of justice, the confidential affidavit be marked confidential on the Court file and not be made available for inspection without prior notice being provided to the plaintiffs and the Court, save that the name of the Buyer may be disclosed.

4. The first plaintiffs must on 22 December 2022 cause notice of these orders to be given to creditors of the second plaintiff by uploading a copy of the final orders, together with an explanation of these orders, to the creditor portal maintained by the Administrators at https://kordamentha.com/creditors/brosa-design-pty-ltd.
5. Any person who can demonstrate a sufficient interest has liberty to apply to vary or discharge any orders made pursuant to order 2 above, on three business days' notice being given to the plaintiffs and the Court.
6. The first plaintiffs' costs of and incidental to this application be costs in the administration of the second plaintiff.

7. The operation of order 2 of these orders is stayed until 4.30 pm AWST on 3 January 2023. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

BANKS-SMITH J: 1 Brosa Design Pty Ltd (administrators appointed) (Brosa) is a furniture retailing and service provider primarily located in New South Wales and Victoria. It has both an online and retail store presence. 2 It commenced business in 2014 but by 2021 was experiencing financial difficulties, said to be caused mainly by an increased inventory in response to uncertain delivery times in the COVID19 environment. There was a subsequent reduction of sales in 2022. 3 On 14 December 2022 Richard Tucker and Michael Korda were appointed administrators pursuant to s 436A of the Corporations Act 2001 (Cth) (Administrators). 4 On 19 December 2022 they entered into a sale agreement with a buyer (Buyer), whose identity may now be disclosed as Kogan Australia Pty Ltd (Sale Agreement). 5 This application was filed on 21 December 2022 and came before me today on an urgent basis. The Administrators ask that certain orders be made today. The first meeting of creditors is scheduled for tomorrow - Friday, 23 December 2022. 6 The urgency with which this application is sought to be determined is unfortunate, but not deliberate. The opportunity for creditors and other interested parties to become aware of this application was very limited. 7 In summary the Administrators seek orders to give effect to a regime for customers of Brosa who have paid for goods to arrange delivery of their goods, accept a store credit from the Buyer, or risk their goods being treated as abandoned after a specified time period. The Administrators do not have funds to continue to deal with the many understandably concerned customers and incur delivery costs up front. The Buyer has agreed to undertake those steps on certain terms. 8 At the end of the hearing I determined that the relief sought (modified during the course of the hearing) should be granted in the pressing circumstances faced by the Administrators, and indicated I would publish these reasons as soon as was practicable. 9 I consider that the implementation of the steps proposed by the Administrators is in the best interests of the creditors, based on the information before me. However, I determined that there should be a stay of the operation of the orders until 3 January 2023, so that the creditors have the opportunity to be better informed about the Sale Agreement and its effects at the first creditors meeting and may otherwise consider their position. That date is the first business day after the Christmas and New Year period.

Events and facts 10 Time does not permit a detailed exposition of all of the relevant facts. This application pertains mainly to the treatment of stock in the possession of Brosa or in the possession of third parties, having regard to the interests of the customers and the Buyer under the Sale Agreement. Accordingly, I will focus on these facts. 11 The key matters, extracted from the affidavit of Mr Tucker filed 21 December 2022, are as follows. 12 Since their appointment, the Administrators have continued to carry on the business of Brosa whilst commencing the usual tasks and inquiries expected of administrators upon appointment, such as ascertaining the position of secured creditors, liaising with employees and other creditors, and commencing the sale process. 13 The main assets of Brosa are its stock and inventory, including raw materials, work in progress and finished goods; store-front leases for stores in Victoria and New South Wales (with concomitant rental obligations); warehouse leases for properties in Victoria (again, with rental obligations); plant and equipment; online accounts and automated email systems; domain names; customer databases with purchase lists; and intellectual property including copyright, product lists and catalogues. 14 As to its financial position, Mr Tucker states that it has no funding to continue operations. It has secured creditors by way of a general security deed in favour of Partners for Growth VI, L.P., and a subordinated general security deed in favour of Partners for Growth V, L.P. (together the Secured Parties). Relevantly, other security is said not to affect inventory. No wages are due but there are outstanding employee entitlements. 15 As to stock, Mr Tucker's evidence was as follows: Each individual item of the Company's inventory in store is valued at less than $5,000.00. The Company holds inventory in the following categories: (a) Unallocated Stock which is all the Company's stock that is unpurchased or unallocated in trade, whether the Company is in physical possession of the stock at its warehouses, or the stock is paid for by the Company and yet to be delivered; (b) Allocated Stock which is all the Company's stock items for which customers have paid in full, and where, as at the Appointment Date, those items were allocated by description in the system maintained by the Company to purchase orders of those customers for that stock. Allocated Stock can be divided up into 2 different categories: (i) Allocated Stock in Possession: where the Company has sufficient stock of that item to meet all customer orders for that item and where the Company is in possession of that stock (i.e. that stock has not yet commenced its transit to the relevant customer); and (ii) Allocated Stock with Third Parties: where the Company is not in possession of that stock (e.g. that stock has commenced its transit to the relevant customer and now sits with third parties on its way to the relevant customer or in transit to the Company to be then shipped to the relevant customer). I believe that the Administrators' costs in dealing with any of the Allocated Stock will be considerable due to the cost of the Administrators time, the monies currently owed to transport and warehousing companies, the communications that would need to be sent to customers that have purchased the Allocated Stock, the costs of maintaining the Company's operations to manage the delivery of the Allocated Stock, where it should not be expected to extract those costs from creditors, given there is no benefit to creditors. To date, the Administrators have received in excess of 2,500 enquiries from customers relating to, amongst other things, the status of individual orders, rights as a customer, how to attend the First Meeting and timing to receive goods that are paid for in full. 16 I will adopt the Administrators' defined term Allocated Stock in Possession in these reasons. 17 It is significant that no issue arises with the Secured Parties as to title in allocated stock that has been paid for. They accept that ownership of items has passed to the relevant customer in those circumstances. 18 As to the Sale Agreement, Mr Tucker explained the urgent sale process that had been implemented, the negotiations with various parties and the acceptance of the Buyer's offer on 18 December 2022. He said that the offer was accepted because it was considered by the Administrators to be the best offer received; it related to all assets of the business; it included a solution to the issue of ensuring customers in respect of Allocated Stock in Possession received their goods; and the Administrators believed the Buyer to have the capacity to execute on an appropriately expeditious basis, having regard to the financial difficulties that Brosa was facing. 19 Mr Tucker's reference to the 'solution' for customers with respect to Allocated Stock in Possession is important. 20 The question of what should be done with stock in the possession of an insolvent company that has been paid for by customers, and where title has passed to the customers, is not new. Relevantly, in a number of well-known cases the court has made orders that address or give effect to regimes for the delivery or collection of stock, with or without the attachment of a levy or fee to be allocated to the administrator's costs of dealing with the stock: White, in the matter of Mossgreen Pty Ltd (Administrators Appointed) v Robertson [2018] FCAFC 63 (Allsop CJ, Banks-Smith and Colvin JJ); In the matter of Renovation Boys Pty Ltd (admins apptd) [2014] NSWSC 340 (Black J); In the matter of International Art Holdings Pty Ltd (admin apptd); International Art Holdings Pty Ltd (admin apptd) v Adams [2011] NSWSC 164 (Ward J); and In the matter of Plantation Outdoor Kitchens Pty Ltd (In Liq) [2019] NSWSC 925 (Ward CJ in Eq). 21 In this case, the terms of the Sale Agreement as explained by Mr Tucker are as follows: In summary, the Sale Agreement provides as follows: (a) from 21 December 2022, the Buyer is to commence the collection of both Unallocated and Allocated Stock in Possession from the Company's warehouses to transfer to the Buyer's warehouses: see clause 4.2(i) and 4.3(c) of the Sale Agreement; (b) the Buyer is then responsible for dealing with the Allocated Stock in Possession and the relevant customers, including arranging for the Allocated Stock in Possession to be delivered to the relevant customer or offering the customer a store credit available to be used at any e-commerce business owned by the Buyer (including the 'Brosa' business). In some situations, the Buyer may require the customer to pay a reasonable delivery fee where the delivery fee for that customer is excessive: see clause 8.1(b) and (c) of the Sale Agreement; (c) the Buyer and the Administrators are to jointly notify the relevant customers who purchased the Allocated Stock in Possession that, pursuant to the Sale Agreement, their purchases are now held by the Buyer and will be delivered, subject to any reasonable fee that may be charged by the Buyer in delivering the good, and unless the customer opts for a store credit available to be used at any the Buyer owned e-commerce business owned by the Buyer (including the 'Brosa' business) instead; (d) customers will have 30 days, or such other date specified by the Court, to make arrangements for their Allocated Stock in Possession: see clause 8.1(d) of the Sale Agreement; (e) where the customer fails to make arrangements for their Allocated Stock in Possession, that stock will be deemed to be abandoned by the customers and will be capable of legally transferring to the Buyer the right, title and interest in that stock (Abandoned Stock): see clause 8.1(d) of the Sale Agreement; (f) where the Buyer is in possession of Abandoned Stock, it will apply a credit in favour of the Company for 50% of the aggregate cost of the Abandoned Stock: see clause 8.2(f)(i) of the Sale Agreement; and (g) the Buyer is then permitted to charge to the Company its reasonable fees in dealing with the Allocated Stock in Possession, and the Company will in turn provide a credit in favour of the Buyer capped at the amount determined in (f) above: see clause 8.2(f)(ii) of the Sale Agreement. 22 It can be seen that the effect of these terms is to pass onto the Buyer the costs and obligation of delivery of stock to customers, in circumstance where Brosa is not funded. In limited circumstances a delivery fee might be imposed on the customer. A potential example relied upon by the Administrators is where an item needs to be transported over a long distances, such as from Melbourne to Broome, but that scenario is expected to be unusual. The regime ensures that a class of customers who have paid for their goods will receive them. There is an option for customers to take a store credit with the Buyer instead of taking delivery of the item they have paid for. 23 In contrast to other cases that have considered regimes of this nature (Renovation Boys and Plantation Outdoor Kitchens, for example), the customer is not expected to pay any levy in addition to the purchase price that they have already paid in order to secure possession of their item. 24 Rather, a large component of those costs (that is, the costs of dealing with and delivering the Allocated Stock in Possession) is incurred by the Buyer, then charged back by the Buyer to Brosa but to the limit of a capped amount and applied against the Buyer's obligation to credit Brosa in relation to the value of Abandoned Stock in the Buyer's possession. The charge back to Brosa of costs incurred by the Buyer is capped at a discounted amount of 50% of the aggregate price that the Buyer is willing to pay for Abandoned Stock.

Administrators say Sale Agreement is in the best interests of creditors 25 I was told that the sale process moved with considerable urgency because of the extent of liabilities being incurred in respect of Brosa's operations, in circumstances where it has limited assets other than stock and intellectual property. The extent of those ongoing liabilities was not disclosed, other than in relation to rent. However, the Administrators point to a number of important benefits to creditors. 26 The Administrators consider the mechanism for a credit to the Buyer capped by regard to the price of the Abandoned Goods is of considerable benefit to Brosa. Mr Tucker stated: On the basis of the Administrators' investigations to date, I believe that the Administrators' costs in dealing with the Allocated Stock in Possession would be considerably more than the credit it will be required to give to the Buyer under clause 8.1 (f)(ii) of the Sale Agreement. I am informed by Mr Korda, and believe, that he holds the same view. This is because I believe that the transport companies which are unsecured creditors of the Company will likely seek to charge the Administrators a premium for future deliveries in order to recover some of their losses. Further, the Administrators will have to continue paying rent on the Shop Fronts and Warehouses beyond 20 January 2023 whereas, under clause 4.2(i)(ii) of the Sale Agreement, the Buyer has agreed to cover the rental costs from that date, if the stock has not all been moved by then. Due to the considerable benefit that the Company would receive by not having to deal with the Allocated Stock in Possession, the Administrators made a commercial decision to cause the Company to enter into and execute the Sale Agreement. Additionally, based on my discussions with representatives of the Buyer, I understand and believe that the Buyer's estimate costs of dealing with the Allocated Stock will likely be considerably higher than the gross total they will be required to pay to the Administrators under clause 8.1(f)(i) of the Sale Agreement. In that respect, I do not believe that the mechanism contemplated in clause 8.1 (f) will result in a net amount owed by the Company to the Buyer. I am informed by Mr Korda, and believe, that he holds the same view. 27 Mr Tucker states that if the orders are not made as anticipated by the Sale Agreement, then the likely result will be liquidation, as the costs of dealing with the Allocated Stock in Possession would be substantial costs in the administration, and would exceed the likely benefit to the creditors. Under the Sale Agreement such costs are borne (in effect) by the creditors of Brosa as a whole, but in a discounted sum and in circumstances where Brosa otherwise does not have the capacity to cover such costs, and the prospect of Brosa otherwise abandoning or disclaiming goods in its leasehold premises is real. 28 Mr Tucker acknowledges the risk that some customers will do nothing with respect to the items they have paid for, and so those goods might be deemed to be abandoned. It must be noted that there is a significant incentive to customers to respond to the notice they receive about the process for taking possession. If they do not wish to take possession or incur any delivery fee to be imposed by the Buyer, they may choose to take a store credit. The risk of goods being treated as abandoned is likely to be limited to those customers who, for whatever reason, do not receive the notice or fail to act on it in the given time frame. The deadline proposed after some discussion at the hearing was 31 January 2023. I note that in both Renovation Boys and Plantation Outdoor Kitchens the time period before a customer was taken to have abandoned goods was 14 days from the date of notice given by email or text message. The deadline of 31 January 2023 in this case gives customers a greater period of time to act under the notice, having regard to the Administrators' intention to provide notice of the anticipated process forthwith. Clearly it is appropriate that the period be longer, having regard to the time of year in the present case and the competing obligations of many people at this time. There is a real prospect that some customers are on holiday or otherwise out of contact during some of January 2023. 29 However, the Administrators say that they say they will deal with customers as follows if the orders sought are made: If the Court is minded to make orders in the form of the Originating Process, I intend to work with the Buyer to notify all relevant customers who have paid in full for Allocated Stock in Possession using email addresses associated with their purchase order as soon as reasonably practicable, which will include words to the effect that: (a) the customers have 30 days from the date of the email notice to elect to have their purchase delivered by the Buyer for free or, where the Buyer requires a reasonable fee be paid by the customer for delivery, for a reasonable fee; (b) if the Buyer does not wish to pay a reasonable fee (or does not wish for the Buyer to deliver its goods for free), it may elect for a store credit available to be used at any the Buyer owned e-commerce business owned by the Buyer (including the 'Brosa' business), equal to the full price paid in respect of the Allocated Stock in Possession, available to be used at any of the Buyer's ecommerce businesses; and (c) the Allocated Stock in Possession will convert to Abandoned Stock if the customers do not make an election within 30 days of the date of this email notice. I intend to continue to engage in discussions with the Buyer as to how to deal with the Allocated Stock with Third Parties. Where we are unable to come to a commercial agreement with the Buyer (or the customer is not satisfied with our proposal) to allow the customer to obtain possession of their goods, I intend notify those customers who have paid in full for the Allocated Stock with Third Parties by email as soon as reasonably practicable that: (a) the customer's purchase is in transit and is being held by a third party; (b) the Company and the Administrators are not in a position to resolve the customer entitlements to that Allocated Stock with Third Parties; (c) the Administrators will provide in that notice the relevant contact details of the third party holding the Allocated Stock with Third Parties; (d) the customer is responsible for contacting the third parties with whom their Allocated Stock with Third Parties is allocated to negotiate the dispatch of their Allocated Stock with Third Parties.

No prejudice identified 30 The Administrators have received confirmation from the Secured Parties that they are content with the orders that were proposed before me today. There is also evidence of numerous communications with customers keen to take possession of goods they have paid for. But otherwise the interested parties have not been in a position to provide any feedback on the proposed orders. I acknowledge the Administrators' view that there is no apparent prejudice to parties by the making of the orders sought, but for reasons explained below, having regard to the limited of notice of this application I will order a short stay.

Principles 31 Relief is sought under s 447A of the Corporations Act and s 90-15(1) of the Insolvency Practice Schedule (Corporations) (IPS). 32 Section 90-15 of the IPS confers power to make orders modifying the operation of the IPS and the Insolvency Practice Rules (Corporations) 2016 (Cth) and, generally, to give directions to external administrators. 33 It is well established that the term of s 90-15 are broader than its partial predecessor provisions, being s 447D, s 479(3) and s 511(1)(a) of the Corporations Act. 34 Gleeson JA observed in In the matter of Hawden Property Group Pty Ltd (in liq) [2018] NSWSC 481, that 'The ambit of s 90-15 has not yet been fully considered in the authorities': at [7]. 35 His Honour went on to observe that the power granted to the Court under s 90-15 is wider than under s 479(3) and accommodates the determination of substantive rights, stating: [8] In Walley, in the matter of Poles & Underground Pty Ltd (Admins Apptd) [2017] FCA 486 at [41], Gleeson J remarked that the question of whether to exercise the power in s 90-15 was 'to be answered by reference to the principles applied to the exercise of the discretions previously contained in ss 479(3) and 511 of the Act'. That may be accepted insofar as the external administrator seeks the directions of the Court, but the power under s 90-15 to 'make such orders as it thinks fit in relation to the external administration of a company' (s 90-15(1)) including 'an order determining any question arising in the external administration of a company' (s 90-15(3)(a)), is wider and accommodates the determination of substantive rights. Of course, the Court would not do so without affording potentially affected parties an opportunity to be heard: Meadow Springs Fairway Resort Ltd (in liq) v Balanced Securities Ltd [2007] FCA 1443 at [49]-[51] (French J, referring to Australian Securities Commission v Melbourne Asset Management Nominees Pty Ltd (1994) 49 FCR 334 at 352 (Northrop J)); Re Willmott Forests Ltd (No 2) (2012) 88 ACSR 18; [2012] VSC 125 at [45]-[46] (Davies J); In the matter of ICS Real Estate Pty Ltd (in liq) [2014] NSWSC 479 at [25] (Brereton J). 36 Whilst a court generally refrains from making directions relating to a liquidator's or administrator's business or commercial decisions, it may give directions relating to issues such as a legal issue of substance or procedure, or an issue of power, propriety or reasonableness: In the matter of Ansett Australia Limited and Korda [2002] FCA 90; (2002) 115 FCR 409 at [65] (Goldberg J). 37 The principles are summarised in many other authorities: see for example Strawbridge, in the matter of Virgin Australia Holdings Ltd (administrators appointed) (No 7) [2020] FCA 1182 at [25]-[30] (Middleton J). For current purposes it is enough to say that, having regard to those authorities, I consider s 90-15 may be relied upon for the making of the directions sought in this matter. Of particular relevance to this application is the fact that the courts have permitted administrators to proceed on the basis that goods are abandoned, even where title has passed or has been deemed to have passed, but customers do not exercise their right to possession. In Renovation Boys, Black J observed that some customers of the bathroom and kitchen product retailer in that case might not collect their goods, leaving the Administrators in a position where they would be left to incur costs in preserving that stock and would be unable to recover their expenses from the proceeds of its realisation. His Honour said: [41] … The administrators seek a direction that they would be justified, if stock remains uncollected within two weeks of their giving notice to customers, in disposing of the abandoned stock and recovering their expenses in relation to that stock from the proceeds of its realisation. I accept that, to some extent, that course involves an element of commercial judgment, but it also seems to me to be a decision as to which the administrators could be exposed to allegations of acting unreasonably, which would be unjustified in the relevant circumstances. For that reason, I consider that that is properly a matter for a direction by the Court that they would be justified in taking those steps. 38 Black J's reference to the risk of 'allegations of acting unreasonably' that might attach to an administrator's decision is consistent with the statement of Goldberg J in In the matter of Ansett Australia Limited extracted above, and to my mind supports the use of the s 90-15 power in this case.

Consideration - just and beneficial that orders be made 39 The determination of this application is not without difficulty and I have proceeded despite some reservations. 40 Initially, my principal reservation was the absence of any real notice to interested parties. The business has been sold and steps have been proposed with respect to property owned by (relevantly) third party customers before creditors have any real information about the administration or their likely position. 41 In both Renovation Boys and Plantation Outdoor Kitchens, the Court ensured that notice of the application was given to interested parties, reserved judgment for a small number of days, and stayed the operation of the orders for a short period. I appreciate the peculiar urgency in the present case, resulting from the time of year, the lack of funds available to the Administrators and the numerous communications from customers inquiring as to whether they can receive the goods they have paid for. I also take into account that the Buyer is (seemingly) ready, willing and able to step in and ameliorate these practical concerns of the Administrators and Brosa's customers as soon as possible. However, even with notice by way of publication of the (unamended) originating process on the Administrators' website yesterday, I do not consider that many interested parties had any prior knowledge of the effect of the orders sought today. And with all due respect to the Administrators and their legal representatives, the effect of the orders is somewhat hard to understand without the benefit of access to the Sale Agreement or the Steps Plan prepared by King & Wood Mallesons and annexed to Mr Tucker's affidavit, or without further explanation. 42 During the course of the hearing I suggested to the Administrators' counsel that a stay might be ordered that would have the effect of permitting the Administrators to address the orders (assuming they were to be made) at the first creditors meeting and allow interested parties to take advice or consider their position. The intention was that the stay be for only a short period having regard to the need for the Buyer to deliver paid-for goods at least during January 2023 and as soon as possible, and to reduce rent overheads and other liabilities. 43 The Administrators did not oppose this course and accepted that the imposition of a short stay was fair in the circumstances. As discussed during the hearing, the stay order is not intended to have the effect of limiting the Buyer's conduct. The Buyer remains free to continue with taking delivery of items into its own warehouse and dealing with customers as it considers appropriate and at its own risk. My understanding is that the Buyer has already commenced moving items from the Brosa warehouses in anticipation of facilitating deliveries to customers. 44 Another reservation is that the responsibility for dealing with and distributing the Allocated Stock in Possession will fall on the Buyer going forward. If there are issues with that process, customers will need to deal with the Buyer and not the Administrators. The Buyer will not have the ease of access to the Court for directions that is extended to the Administrators under the Corporations Act. However, as counsel for the Administrators confirmed, the Buyer is a well-known entity in the online sales environment, with considerable experience and it can be assumed to have in place resources for customer service. 45 In any event I must weigh these reservations against the benefits to creditors and the certainty extended to customers that the Sale Agreement provides. Absent orders of the nature sought and the obligations on the part of the Buyer, there is a very real risk that goods will be disclaimed or abandoned and Brosa will be wound up. 46 The regime under the Sale Agreement provides the customers who have already paid for goods with a clear and efficient pathway to taking delivery of their goods. This is a significant benefit. 47 Further, the regime under the Sale Agreement, together with the limited lien and indemnity sought (see below) avoids the difficulty of requiring customers who have paid for goods to also pay a levy, and the associated task of assessing and allocating a suitable levy: see the task undertaken by Ward CJ in Eq in Plantation Outdoor Kitchens at [147]-[159]. 48 The regime provides certainty as to who is to deal with abandoned goods. It requires the Buyer to take over leasehold commitments from 20 January 2023, a course which in turn should encourage the Buyer to act quickly to retrieve and deliver customer stock. 49 It alleviates the ongoing burden on the Administrators to deal with customers and the market with respect to inventory in circumstances where the Administrators' costs for such work will be passed onto the creditors. 50 The fact that the Secured Parties have conceded ownership of items in favour of paying customers has removed the need for the Court to consider that issue, and any associated uncertainty: see Renovation Boys and the task undertaken by Black J at [7]-[21]. 51 Although the sale process has been truncated, the Administrators received some 46 expressions of interest, received eight offers for discrete parts or all of the business, and took forward three offers for close consideration. There has therefore been some considerable testing of the market in the time available to the Administrators. 52 The handover of responsibility under the Sale Agreement for dealing with customers who have paid for goods to the Buyer might superficially appear to be a risk, but I do not consider it to be a significant issue, having regard to the identity of the Buyer, the identified upper value of $5,000 per item and the fact that it appears that Brosa has sales records for all purchases and other relevant records available to the Buyer. In fact, the willingness of the Buyer to incur the immediate costs of communications and delivery is a significant benefit to the customers and the creditors generally. 53 The risk of loss of possession of goods that follows inaction on the part of a customer is not to be ignored, but in all of the circumstances of this case the customers should have ample knowledge of the options available to them and should be in a position to implement one of the choices available to them in order to avoid the risk that their particular item is abandoned. 54 In all of these circumstances, I considered it appropriate to make the order numbered 2 of the orders made today, together with the stay order reflected in order 7. I consider it just and beneficial to make the orders sought.

Lien and indemnity 55 The potential for an administrator to have the benefit of a lien and indemnity from property that they have identified, preserved or realised is also now recognised, albeit that whether or not a lien should attach in a particular case will depend upon the circumstances. How the amount protected by a lien and indemnity might be quantified is a separate question, and does not arise for present purposes. In support of the power to make orders as sought by the Administrators in this case I refer to the discussion in Mossgreen at [22]-[23]; International Art Holdings at [81]; and Plantation Outdoor Kitchens at [150]-[156]. 56 In particular I note that in the present case the lien and indemnity are limited to sale proceeds in the hands of the Administrator, and so fall on the general creditors - the Administrators do not seek to attach any levy in that regard to the customers who have paid for goods, in contrast to the position in Plantation Outdoor Kitchens, as noted above.

Confidentiality orders 57 The Administrators seeks suppression orders with respect to Mr Tucker's second affidavit under s 37AF of the Federal Court of Australia Act 1976 (Cth) on the ground set out in s 37AG(1)(a) to the effect that the order is necessary to prevent prejudice to the proper administration of justice that may occur by the disclosure of confidential material. The affidavit annexes the Sale Agreement. I accept that it is appropriate for the terms of that agreement to remain confidential at present. Initially the Administrators sought to suppress the name of the Buyer, but that information is now in the public domain and it is no longer confidential. 58 I consider it is in the interests of the proper administration of justice that the confidentiality orders be made, subject to further order.

Ancillary orders 59 There will be orders addressing notice of these orders and preserving liberty to apply to interested parties. I certify that the preceding fifty-nine (59) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Banks-Smith.