Tucker (Administrator), in the matter of Brosa Design Pty Ltd (Administrators Appointed) (No 2) [2023] FCA 11 - FCA 2023 case summary — Zoe

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Tucker (Administrator), in the matter of Brosa Design Pty Ltd (Administrators Appointed) (No 2) [2023] FCA 11

[2023] FCA 11

Federal Court of Australia|2023-01-16|Before: Smith J

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At a glance

Source facts

Court

Federal Court of Australia

Decision date

2023-01-16

Before

Smith J

Catchwords

CORPORATIONS - administration - extension of time for compliance with orders made to facilitate transit and delivery of customers' goods - extension in interest of creditors - extension granted

Source

Original judgment source is linked above.

Catchwords

CORPORATIONS - administration - extension of time for compliance with orders made to facilitate transit and delivery of customers' goods - extension in interest of creditors - extension granted

Judgment (2 paragraphs)

[1]

The interlocutory process filed on 10 January 2023 be made returnable at 10.15 am on 16 January 2023.
Order 2(c) of the orders made on 22 December 2022 be varied so the date for any relevant customers in respect of Allocated Stock in Possession to make appropriate arrangements to collect or have delivered that Allocated Stock in Possession, before the first plaintiffs are justified in causing the second plaintiff to treat such stock as abandoned by the customer and, thereafter, transferring the right, title and interest in such Abandoned Stock to the Buyer in accordance with the Sale Agreement, is extended to 17 February 2023.
Any person who can demonstrate a sufficient interest has liberty to apply to vary or discharge order 2 above, on three business days' notice being given to the plaintiffs and the Court.
The first plaintiffs' costs of and incidental to this application be costs in the administration of the second plaintiff. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

[2]

BANKS-SMITH J: 1 On 22 December 2022 I made orders facilitating the collection and delivery of items paid for by customers of Brosa Design Pty Ltd, now in administration, by the Buyer of Brosa's business, being Kogan Australia Pty Ltd: Tucker (Administrator), in the matter of Brosa Design Pty Ltd (Administrators Appointed) [2022] FCA 1588 (Reasons). 2 Relevantly, the orders provided for the treatment of 'Allocated Stock in Possession', being stock sold by Brosa that had been paid for in full by a customer and where Brosa had sufficient stock to meet that order, but the item not as yet commenced its transit to the relevant customer. As to such stock, I made the following order (utilising definitions set out in the Reasons): 2 … (c) if any relevant customers in respect of the Allocated Stock in Possession, as defined in the Tucker Affidavit, fail to make appropriate arrangements to collect or have delivered that Allocated Stock in Possession, including accepting a Buyer store credit in lieu of that Allocated Stock in Possession, by 31 January 2023, the first plaintiffs are justified in causing the second plaintiff to treat such stock as abandoned by the customer and, thereafter, transferring the right, title and interest in such Abandoned Stock (as defined in the Sale Agreement) to the Buyer in accordance with the Sale Agreement; 3 On 10 January 2023 the Administrators filed an application seeking an extension of the date of 31 January 2023 referred to in that order to 17 February 2023. 4 The application was supported by affidavits of Michael Korda (one of the Administrators) and Stacie Starcevich, a solicitor employed by the Administrators' lawyers, King & Wood Mallesons. 5 Mr Korda explained that the Buyer has commenced undertaking the steps to collect stock including the Allocated Stock in Possession and receipting it into the Buyer's system, although the Buyer has not yet determined which customers may need to be charged a reasonable delivery fee and how much that reasonable delivery fee may be, likely determined by reference to distance of the delivery and the size and quantity of stock to be delivered. In addition, the Buyer is concerned that it will be unable to complete this process and contact all customers to make arrangements to collect or have delivered their Allocated Stock in Possession (including the option of accepting a Buyer store credit in lieu of that Allocated Stock in Possession) with sufficient time ahead of the 31 January 2023 deadline. 6 Accordingly, the Buyer asked the Administrators to seek an extension to the deadline otherwise imposed by order 2(c) of the 22 December 2022 orders so that the Buyer can give each customer a reasonable timeframe to respond to the Buyer's proposed arrangements. 7 Mr Korda said that the Administrators consider the extension is in the interests of the customers of the Allocated Stock in Possession and also in the interest of Brosa's creditors more generally. The Administrators are not aware of any prejudice to any party that might flow from the extension being granted. 8 Mr Korda and Ms Starcevich provided evidence that the Secured Parties (defined in the Reasons) have been informed of this application. Neither indicated opposition. Ms Starcevich explained that copies of this application and supporting affidavit had been uploaded to the portal maintained by the Administrators and, as at 6.30 am this morning, the Administrators had not received notice of any objection from any person to this application. 9 For completeness Mr Korda gave evidence that those parts of the 22 December 2022 orders that were aimed at keeping creditors (including customers) informed of the purpose and outcome of the court application had been complied with. 10 In particular, Mr Korda explained that the Administrators uploaded on the portal a notice explaining the effect of the Sale Agreement and the 22 December 2022 orders, along with copies of the supporting affidavit and Reasons, and read out a copy of the notice for the benefit of those creditors attending the first meeting of creditors. 11 Mr Korda also explained that at the date of this interlocutory process, the Administrators have not received any objections or submissions from any creditors in relation to the orders made on 22 December 2022. 12 Having considered the affidavits of Mr Korda and Ms Starcevich, I am satisfied that it is appropriate to grant the extension sought by the Buyer. The extension is entirely in the interests of the relevant customers, as it provides a greater period of time to arrange for transit and delivery before there is any deemed abandonment of goods. The successful implementation of a transfer of goods that have been paid for by customers is also in the interests of the creditors generally, limiting the need for the Administrators to deal with abandoned goods generally and any claims that might follow. 13 Accordingly, I granted the extension on the application of the Administrators. I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Banks-Smith.