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<a href="https://www.apartments.com.au/developers/doma-group">DOMA Group</a> has unveiled plans for Newcastle Quay, a major waterfront precinct set to reshape Newcastle’s harbourfront and further cement the city’s evolution into one of Australia’s fastest-growing urban destinations.

Positioned on a prominent site within the Honeysuckle Precinct, Newcastle Quay will span both sides of Honeysuckle Drive, connecting directly to the Foreshore Promenade and sitting within walking distance of Newcastle Interchange.

The mixed-use precinct is planned to include around 1,000 apartments, more than 28,000 sqm of commercial office space, 6,000 sqm of retail, and a 180-room hotel anchored by a 500-seat conference and exhibition centre, a move expected to significantly lift Newcastle’s ability to attract major business and tourism events.
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<img alt="DOMA Group unveil Newcastle’s future with transformative Newcastle Quay Precinct" data-entity-type="file" data-entity-uuid="0642ca09-67cc-4920-8a7e-d18df9729b4e" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/%3D.png?VersionId=CnDmZxQnOV5LN0ePu7jaFBXC9tPGTrWm" />

The proposal builds on DOMA’s growing Newcastle pipeline, where the developer has already delivered 866 apartments and more than 19,000 sqm of commercial and retail space since entering the market in 2013. A further $2 billion pipeline is also in the works across the city.

The masterplan and executive architecture are led by <a href="https://www.apartments.com.au/architects/sjb-architects">SJB</a>, with building concepts developed alongside Stewart Architecture, Architecture AND and Curious Practice, and landscape design by <a href="https://www.apartments.com.au/landscape-architect/turf-design">Turf Design Studio</a>. More than 11,000 sqm of open space is planned, including a new waterfront park known as Honeysuckle Green, upgrades to Tree of Knowledge Park, and new pedestrian and cycling links throughout the precinct.

At the centre of the development will be the heritage-listed Wickham School of Arts, which DOMA plans to reposition as the civic and cultural heart of the precinct through restaurants, bars, events and public gathering spaces.

The broader vision is to create a genuine day-to-night precinct, blending residential, hospitality, retail, commercial and cultural uses in a way Newcastle has yet to experience at this scale.

DOMA Group Managing Director Jure Domazet said the aim was to create a precinct that becomes synonymous with Newcastle itself.

“Our vision is to create a precinct that not only delivers high-quality commercial, residential, and cultural spaces, but also defines Newcastle’s waterfront for generations to come,” Domazet said.

DOMA’s Chris Farrington said the project would fundamentally change how Newcastle is perceived nationally.

“Newcastle Quay is more than a waterfront precinct, it is a national announcement for this city,” Farrington said.

“A world-class Conference and Exhibition Centre will open Newcastle and the Hunter Region to a national and international audience for the first time, delivering something this city has long deserved.”

The project is expected to generate more than 4,000 full-time equivalent jobs and act as a major economic driver for the Hunter region through tourism, business events, hospitality and commercial investment.

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Minister for Planning and Public Spaces Paul Scully said the final parcel of harbourfront land will be a "true mixed-use precinct destination that includes housing, hospitality and entertainment, commercial spaces, retail, economic and social outcomes."

Joel Robinson

DOMA Group unveils 1,000-apartment Newcastle Quay precinct

ASX-listed developer Stockland is continuing to ramp up its return to the apartment market.

In late 2024, <a href="https://www.apartments.com.au/developers/stockland">Stockland</a> announced it would resume apartment development after a 13-year absence, launching with Stanton Place in Rosebery, a 144-apartment project now under construction.

Last week, the developer unveiled plans alongside the NSW Government for a <a href="https://www.apartments.com.au/news/nsw/first-look-stockland-nsw-gov-unveils-plans-for-3-300-home-waterloo-south-renewal">3,300-home precinct in Waterloo</a>.

Now, Stockland has shifted its focus in St Leonards, lodging a State Significant Development Application (SSDA) to replace an approved 42-storey office tower with a 52-storey residential development comprising more than 500 apartments.

<img alt="Stockland" data-entity-type="file" data-entity-uuid="8979095e-9072-432b-a7da-58b180cf994d" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-20%20at%204.27.36%E2%80%AFPM.png?VersionId=_jbRXYOafCSHjwsz.yQCNIymMyCj8zkF" />

An existing 14-storey commercial office building would make way for a 264.5-metre tower designed by <a href="https://www.apartments.com.au/architects/bates-smart">Bates Smart</a>. The project would deliver 538 apartments, including 30 affordable housing units, alongside retail and commercial uses at the podium and ground plane.

It will rise from&nbsp;<a href="https://www.apartments.com.au/new-apartments/601-pacific-highway-st-leonards-nsw-2065">601 Pacific Highway</a>, a prominent 2,844 sqm triangular site adjoining Mitchell Plaza and fronting Pacific Highway.

The development is being pursued under the Housing Delivery Authority pathway after Stockland’s proposal was declared State Significant Development earlier this year.

<img alt="First look: Stockland plans 52-storey mixed-use tower with 538 apartments in St Leonards" data-entity-type="file" data-entity-uuid="67f40f35-0458-47ab-80c0-a4e98a31838a" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/stockland%201.png?VersionId=rxXe3njr.auuGDuiR0k42uI8Zr4K.gZA" />

The apartment mix includes 217 one-bedroom apartments, 191 two-bedroom apartments, 122 three-bedroom apartments, and eight four-bedroom residences. Six basement levels would accommodate 300 car spaces, bicycle parking, loading areas, and building services.

Bates Smart said the project has been shaped around a series of urban design principles intended to improve the pedestrian experience and respond to the evolving character of St Leonards.

“With a boundary length of almost 75m along Pacific Highway and 70m along Atchison Street to the north, complying simply with the LEP envelope and required setbacks would result in a very wide tower form on the skyline,” the architects noted in the Design Report.

“We propose breaking the tower form into two defined volumes rather than a singular form.”

The podium has similarly been articulated into separate forms to reduce perceived bulk and create a finer-grain response to Mitchell Plaza and Atchison Street. Retail tenancies would activate the lower levels, while commercial space is proposed across the podium floors.

<img alt="First look: Stockland plans 52-storey mixed-use tower with 538 apartments in St Leonards" data-entity-type="file" data-entity-uuid="90149990-0551-40d2-bd48-14b69a015d12" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/stockland%202.png?VersionId=MJC2KIIWFvU9FPGr3IVq09gkRN_gX3m8" />

The design also places a significant emphasis on communal amenity and environmental performance. Residents would have access to landscaped terraces, wellness areas, flexible workspaces, and rooftop communal facilities, while the all-electric building is targeting an average 7-star NatHERS rating. Bates Smart said the project incorporates passive design measures including natural ventilation, integrated shading, and lightweight façade systems.

Planning documents note the site is around 350 metres from St Leonards Station and 400 metres from the metro entrance, placing it within one of Sydney’s most connected emerging residential precincts.

The project arrives amid a wave of large-scale redevelopment proposals reshaping the St Leonards and Crows Nest skyline. Several nearby sites have recently been approved, lodged, or declared under the Housing Delivery Authority pathway as the precinct absorbs significant residential density uplift tied to transit-oriented development policies.

<img alt="Stockland" data-entity-type="file" data-entity-uuid="7805bd7c-dfd7-4b35-8e15-ec4a8bf8e61b" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-20%20at%204.27.26%E2%80%AFPM.png?VersionId=iY12K2m2bQ6EeDnshqfZC9rbLx_oEugP" />

Bates Smart’s report describes St Leonards as transitioning away from its historical commercial identity toward a more mixed-use urban environment.

“In recent years, the character of St Leonards has started to evolve, driven by new development trends along the Pacific Highway corridor,” the report said.

“These projects have increasingly focused on residential accommodation, marking a shift from its purely commercial roots.”

Sekisui House Australia is currently selling Waterstone down near Newlands Park, in a pocket being branded "St Leonards South." Hyecorp recently completed Audrey in the same pocket.

First look: Stockland plans 52-storey, 538-apartment St Leonards tower

ANZ believes the Reserve Bank is in no rush to move again.

Following the release of the May Monetary Policy Board Minutes, ANZ has taken the view that the RBA is now firmly in a holding pattern, with the cumulative impact of previous rate hikes giving the Board scope to assess how the economy evolves from here.

That positioning, in ANZ’s view, makes a June rate hike unlikely.

The bank continues to expect the cash rate to remain unchanged at 4.35 per cent for an extended period, with the RBA adopting what is effectively a wait-and-see approach.

The Minutes point to a Board that sees financial conditions as already restrictive, but without a clear read on just how restrictive they are. That uncertainty has shifted the focus away from immediate policy action and toward monitoring both domestic conditions and global developments, particularly the conflict in the Middle East.

As ANZ interprets it, the Board is deliberately avoiding strong forward guidance.

Instead, it is allowing itself flexibility, acknowledging that monetary policy has limited ability to influence the near-term trajectory of inflation, while also recognising that economic growth is likely to remain below potential for some time.

Despite that pause in momentum, ANZ notes that the Board still carries a tightening bias.

The Minutes reveal that, in weighing up its decision, the Board seriously considered another 25 basis point increase. The key debate centred on the trade-off between inflation and activity, particularly in the context of global uncertainty.

Ultimately, most members leaned toward the inflation side of that equation.

Underlying inflation is still expected to remain above target for an extended period, regardless of how external risks evolve. That has led to a view within the Board that the risks to its inflation objective have increased, and that the current cash rate may not be sufficiently restrictive to fully contain those pressures.

That’s important.

While the decision, for now, is to hold, the underlying tone of the Minutes suggests the door to further tightening has not been closed.

ANZ also points to commentary from Assistant Governor (Economic) Sarah Hunter, who highlighted the risk that inflation could pass through the economy more quickly and broadly than in previous cycles. Both Hunter and a majority of the Board expressed concern that inflation expectations could become less anchored after such a prolonged period above target.

That combination, persistent inflation and the risk of expectations shifting, is what continues to underpin the RBA’s cautious stance.

However, where ANZ diverges from the RBA is on the outlook for activity.

The Board appears relatively comfortable with current spending patterns, effectively downplaying recent declines in business and consumer sentiment. It notes that sentiment has historically been only weakly correlated with actual spending, and that feedback from its liaison program has not yet pointed to a meaningful slowdown in consumption.

ANZ is less convinced.

The bank believes the link between household disposable income, sentiment and spending is more direct than the RBA is currently acknowledging. With inflation continuing to erode real incomes, ANZ expects household spending to soften more materially than the central bank is forecasting.

That divergence matters because it shifts the balance of risk.

If activity weakens more than expected, the trade-off between inflation and growth changes. In ANZ’s view, that would reduce the need for further tightening and reinforce the case for the RBA to remain on hold.

It also suggests that the current policy setting may already be doing more work than the Board fully appreciates.

The broader takeaway from ANZ’s interpretation is that the RBA is walking a narrow path.

On one side sits the risk of inflation remaining elevated for longer than expected. On the other is the growing pressure on households and the potential for a sharper slowdown in activity.

For now, the Board is choosing to wait.

But it is a pause that still carries an underlying tightening bias, rather than a clear pivot toward easing.

In practical terms, that leaves the cash rate anchored at 4.35 per cent for the foreseeable future, with the next move still uncertain.

For borrowers, it reinforces the reality that relief is not imminent.

And for the broader economy, it highlights the delicate balance the RBA is trying to strike, between bringing inflation back to target and avoiding an unnecessarily sharp slowdown in growth.

According to ANZ, it is a balance that is becoming increasingly difficult to maintain.

RBA to hold rates for "prolonged period" rather than hikes: ANZ

<a href="https://www.apartments.com.au/developers/venturecrowd-property-projects">VentureCrowd</a> is down to the final Canopy Villa release at Cumulus Grand Villas in Carrara, as construction continues on the 59-residence gated community positioned above 100 hectares of natural savanna on the Gold Coast.

The remaining Canopy Villa forms part of one of four collections within the <a href="https://www.apartments.com.au/architects/bda-architecture">BDA Architecture</a>-designed community and has attracted interest from buyers seeking larger-format homes that combine privacy, security and low-maintenance living. Positioned within a private cul-de-sac and facing a protected black she oak forest, the four-bedroom villa includes a large private outdoor area suited to pet owners and families wanting more flexible space.

<a href="https://www.apartments.com.au/new-townhouses/cumulus-grand-villas-carrara-17-baltimore-court-carrara-qld-4211">Cumulus Grand Villas</a>, located at 17 Baltimore Court, comprises a mix of three and four-bedroom villas across the Skyline, Canopy, Savanna and Broadview collections. Prices currently range from $1.455 million to $1.895 million, with the final Canopy Villa priced from $1.825 million.

[smartcode_project:default project_id=135663 project_image_fid=360477]

The Canopy Collection villas offer four bedrooms, 2.5 bathrooms and approximately 245 sqm of internal space, alongside double garages and landscaped private areas. Expansive glazing, open-plan living spaces and private balconies have been designed to maximise natural light and outlooks toward the surrounding savanna landscape.

Construction is now underway across the fully funded development, which VentureCrowd says has become an increasingly important consideration for buyers assessing off-the-plan opportunities on the Gold Coast. The project is being delivered by <a href="https://www.apartments.com.au/builders/devcon">Devcon Property Group</a>, which has operated in South East Queensland since 1993 and delivered more than 1,000 homes across the region.

VentureCrowd Director of Property David Whitting previously said the project responds to changing buyer priorities in the prestige Gold Coast market.

“Flexible floorplans have proven particularly relevant for purchasers aged between 40 and 65, including next home buyers, downsizers and investors,” Whitting said.

[smartcode_project:default project_id=135663 project_image_fid=360505]

The buyer profile at Cumulus has reflected that shift toward owner-occupier-driven demand. Stuart Towns and Tracey Loynes recently purchased a Canopy Villa, drawn to both the lifestyle offering and the flexibility the home provided for their next stage of living together.

The couple, who met three years ago, sold their Robina home earlier this year after identifying what they saw as strong long-term investment potential at Cumulus while remaining within the same Gold Coast market. The villa’s private backyard was a major drawcard for their dog Luna, while proximity to golf courses including Emerald Lakes also aligned with their lifestyle interests.

Beyond the residences themselves, the community has been planned around shared lifestyle and recreation amenities. The Infinity Terrace will include a 20-metre heated pool, barbecue facilities, alfresco dining spaces and elevated retreat areas overlooking the surrounding landscape. Walking trails, a private nature reserve, orchard and herb garden are also integrated into the masterplan.

[smartcode_project:default project_id=135663 project_image_fid=360473]

BDA Architecture Director Darren Greenaway said the design approach was heavily influenced by the site’s outlook and secluded setting.

The practice sought to create what Greenaway described as a “little piece of paradise,” drawing inspiration from the elevated views, surrounding greenery and quiet location.

<a href="https://www.apartments.com.au/developments/carrara-qld-4211">Carrara</a> continues to attract buyers seeking larger homes within proximity to the coast but without direct beachfront pricing. Cumulus sits within easy reach of Broadbeach, Pacific Fair, Robina Town Centre and the M1, providing connections north to Brisbane and south toward the Gold Coast Airport and northern New South Wales.

The first stage of Cumulus Grand Villas is targeting completion in 2026.

[smartcode_project_cta:default project_id=135663]

VentureCrowd nears sell-out of Canopy Collection at Cumulus Grand Villas in Carrara

Waverley Council has made a call that many councils have been reluctant to make publicly. Growth is coming, regardless of who controls it.

The release of the Bondi Junction Vision and Master Plan is less about whether the Eastern Suburbs’ primary centre will change, and more about how that change is shaped, funded, and ultimately experienced on the ground. Waverley Council has released a 100-page plan which is effectively the first comprehensive blueprint for Bondi Junction in over two decades, and in doing so, signals a clear shift in how councils are positioning themselves in the current planning environment.

For the past 18 months, the conversation across New South Wales has been dominated by the State Government’s Low and Mid-Rise Housing reforms and the emergence of the Housing Delivery Authority pathway. Both have created faster, more centralised avenues for development approvals, particularly in well-located, infrastructure-rich areas like Bondi Junction.

Waverley Council’s response has been to move early, and decisively.

Rather than react to individual proposals as they come through the HDA or broader State-led reforms, Council has sought to establish a clear, place-based framework that sets the terms for how Bondi Junction evolves. The underlying position is relatively straightforward: if densification is inevitable, it should be tied to infrastructure, public domain improvements, and a cohesive vision for the centre, not delivered piecemeal through ad hoc applications.

<img alt="bondi junction" data-entity-type="file" data-entity-uuid="7f1f729c-ed99-4c6c-bf87-ffbce6991941" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-19%20at%209.58.16%E2%80%AFAM.png?VersionId=ULX4OlXKjeJ5BvNCNGL86evgXCjCfMih" />

At its core, the document is attempting to reposition Bondi Junction from what it largely functions as today, a transport interchange anchored by a major retail centre, into something far more layered. The ambition is to transform it into what the plan describes as the “civic and cultural heart of Sydney’s East,” a place that is active beyond commuting hours and capable of supporting a broader mix of uses, experiences and communities.

That repositioning is built around four key ambitions.

The first is to create a true destination. Bondi Junction already attracts significant foot traffic, with more than 86,000 daily transport users and millions of annual retail visits, but much of that activity is transient. People pass through, rather than stay.

The Master Plan seeks to change that dynamic. It leans heavily into the idea of an “18-hour economy,” extending activity well beyond traditional retail hours through dining, cultural programming, events, and a more active night-time offering. This is not just about adding more hospitality venues, but about fundamentally shifting how the centre operates, from a daytime shopping destination to a place that functions across the full span of the day and into the evening.

Oxford Street Mall sits at the centre of that shift.

Long seen as underperforming relative to its potential, the Mall is identified as one of the key catalyst projects in the plan. It is to be reimagined as a day-to-night spine, combining retail, dining, wellness and cultural uses in a way that creates a continuous flow of activity. Outdoor dining, rooftop venues, laneway activation and a curated events program are all part of the strategy, alongside significant public domain upgrades that aim to improve comfort, safety and usability.

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The second ambition is to transform Bondi Junction into a world-class interchange.

Despite being one of the most heavily used transport nodes in Sydney, the current experience is fragmented. Connections between the station, Westfield, Oxford Street Mall and surrounding streets are often unclear, and major roads create physical barriers that disrupt pedestrian movement.

The Master Plan proposes a more seamless, people-focused network. That includes clearer pedestrian links, improved wayfinding, better integration between transport modes, and a rethinking of how arrival into the centre is experienced. The aim is to shift the perception of Bondi Junction from a place people move through, to a place they arrive in.

The third ambition focuses on greening and open space.

One of the more consistent pieces of community feedback throughout the Vision phase was the need for more greenery, better public spaces, and a more comfortable urban environment. Despite being surrounded by major parks, Bondi Junction itself has relatively limited accessible open space, with much of the public realm dominated by hard surfaces and traffic infrastructure.

The plan responds with a network of new and upgraded public spaces, increased tree canopy, and what it terms the “Parkline,” a green link connecting Waverley Park through to Centennial Park. This is not just about aesthetics. It is about addressing heat, improving liveability, and ensuring that increased density is matched by access to high-quality outdoor space.

The fourth ambition is perhaps the most important from a development perspective: growth that gives back.

Bondi Junction is already the primary location for new housing supply in the Waverley LGA, and that is expected to continue. The area carries a target of 2,400 new dwellings by 2029, with further growth projected beyond that as demand for well-located housing continues to rise. The Master Plan does not seek to limit that growth. Instead, it attempts to shape it.

New housing is to be concentrated around transport, with stepped building heights designed to protect the character of surrounding neighbourhoods. At the same time, the plan introduces a more explicit link between development uplift and public benefit. This is where value capture becomes central.

The document outlines a framework where increased development potential is tied to contributions that fund public domain improvements, community infrastructure, open space, and affordable housing. It is an approach that recognises that much of the transformation of Bondi Junction will be delivered by the private sector, but seeks to ensure that the benefits of that growth are shared more broadly. The Civic Precinct is a key part of that equation.

Leveraging Council-owned land, the plan proposes a consolidated civic and cultural hub centred around Ebley Street. This would include new community facilities, cultural spaces, and potentially a new Council Chambers, creating a focal point for civic life that currently does not exist in Bondi Junction at scale.

It is one of several catalyst projects identified in the Master Plan, alongside the Oxford Street Mall transformation. These projects are intended to anchor change, acting as early interventions that unlock broader investment across the precinct.

Importantly, the Master Plan is not just a design document. It includes a delivery framework that sets out how these ambitions are intended to be realised.

Council is explicit in acknowledging that it cannot deliver the transformation alone. Implementation will require coordination between State agencies, private developers, landowners and the community, with a mix of planning agreements, infrastructure contributions and direct delivery mechanisms used to fund and stage improvements over time.

The plan outlines a mix of short-term, medium-term and long-term actions, from immediate public domain upgrades and planning controls, through to larger-scale projects that will unfold over the next decade or more. In practical terms, the next 12 to 24 months will be the most important.

This is when the Master Plan will move through exhibition, refinement and eventual adoption. It is also the period in which Council will seek to embed the framework into its planning controls, giving it weight in the assessment of future development applications.

Council officers have indicated that once the Master Plan is in place, it could be used as a benchmark when assessing Housing Delivery Authority proposals, and potentially reduce the need for further HDA declarations within Bondi Junction. In effect, it is an attempt to bring planning control back to the local level, while still aligning with State housing targets.

That tension between State-led reform and local planning control is not unique to Waverley. It is playing out across Sydney.

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If delivered as intended, Bondi Junction will become denser, more active, and more complex. It will support more residents, more workers, and a wider range of uses, extending beyond its current retail core into a more layered urban environment.

“The civic and cultural heart of Sydney’s East”: Bondi Junction masterplan revealed

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>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/4/24/MOSS_LETTER.jpg" alt="">
"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 in our reportage last week.
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 "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."
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.
Caught amid the clients, were Sydney's society Coppleson family listed as owed $465,000, the third highest-owed creditor.
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jchancellor-FAypfDUnLy

BDO says Mossgreen contents are now uninsured after copping a Federal Court shellacking 

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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 "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."
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 caught amid the clients, 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 Potts Point penthouse sold to Gretel Packer for $8.75 million.
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BDO failed the "common sense" approach to Mossgreen inventory administration

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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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The besieged administrator of collapsed auction house has yet to advise, today Thursday, when clients and buyers can collect the artwork and collectibles.
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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, on behalf of art collector Michele Asprey, 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 came December 21 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 at the meeting who were told no law required trust accounts for the auction proceeds.
There has yet been a second creditors meeting, given a court extension has been granted.
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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.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 judge in the ongoing Mossgreen court hearings has made an order that the BDO administrators are justified in not returning the auction goods before the Full Court rules on the appeal of an earlier judgement on the fate of the valuable art and antiques currently caught up in the collapse of the auction house.
"I will make an order to that effect," Justice Perram said yesterday.
But the issue of the ongoing storage costs at the Armadale (pictured) and Clayton premises has become the centre of an unravelling legal embroglio.
His honour noted the issue was one of "spot fires' that had arisen during the voluntary administration.
BDO's James White had 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 yesterday.
"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.
BDO are appealing an earlier judgement that ruled the fee-seeking 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" when BDO sought to require the consignors to pay a levy for the return of their goods.
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.
"If the Full Court reverses my decision, then the administrators will be entitled to recover that rental and insurance cost by means of the equitable lien which will, by that time, have been reinstated," Federal Court judge Nye Perram noted.
"If they are unsuccessful in the appeal to the Full Court, then they will have no equitable lien and they will have no entitlement to be reimbursed in respect of the rent.
"The difficulty with the proposed interlocutory orders which are being sought is that, although couched, as Mr Foreman of counsel put it, as if it were an interim stay, they are not actually interim in effect.
"If I now make an order, as is sought, that the administrators are justified in causing the company to retain and to continue to pay the rent, then, even if the Full Court upholds my decision, at least for the period covered by that direction, the administrators will have been acting within their statutory remit.
"This is because I will have so held this afternoon, even though, on this hypothesis, I will have held in a final order that the administrators are not entitled and the Full Court will have upheld that.
"That is not a situation which seems to me to be possible.
"I doubt whether I have the power to make the orders which are sought in relation to trying to put the administrators in a position where they can pay the rent and be sure that it has got to their account. 
"Even if I do have the power, I would not, as a matter of discretion, exercise it for the reasons which I have given.
"I therefore refuse that aspect of the interlocutory application.
"On the other hand, the administrators are also concerned that, if consignors begin turning up at the premises in the next day or so before the Full Court appeal and demand their goods and the goods are returned to them, and if thereafter the administrators are successful in their Full Court appeal, they will have lost their lien because the goods will have been gone.
"This seems to me to be an unanswerable submission.
"I therefore accede to the suggestion that I should make an order that the administrators in substance would be justified in not returning the goods before the disposition of the Full Court appeal and I will make an order to that effect."
The auction house held a large quantity 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 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.
The judge noted the administrators have in the meantime two alternate interests in recovering the cost of the stocktake and related expenses from the consignors.
"On the one hand, if the secured creditor’s claim for $6 million and the trust claims are unsuccessful then the administrators will be entitled to recover the stocktake expense under their indemnity out of the company’s assets conferred by s 443D of the Act.
"However, this will significantly dilute the return to unsecured creditors as Mr White acknowledged.
"On the other hand, if the secured creditor is successful in asserting his security (or the trust claims succeed), then the administrators will bear the costs themselves since there will be no company property available from which their indemnity may be acquitted.
"In either case, the administrators have a motive to seek to have the consignors meet the cost of the stocktake."
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Stored Mossgreen art and antique rental and insurance liability issue flares

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BDO, the besieged administrators for Mossgreen, are to appeal their recent Federal Court defeat, further delaying the return of art to clients of the collapsed auction house.
The accountancy firm lost their expensive court case last week seeking to charge clients for the return of their goods.
Weekly holding costs are ticking over at $44,000.
Clients, already furious at BDO's attempts to charge a $353 per lot to have their own property returned, are in the dark as to just when they will be able to collect their unsold or purchased lots.
But BDO claims to have incurred about $1,150,000 (including GST) of costs including the stocktaking and storing of auction lots. 
BDO’s application argued a complete stocktake of vendor lots was required by the specialist firm, Tiger Asset Group.
"I am concerned about the risk the administrators will be personally liable for these costs and expenses," James advised the court in a hasty affidavit lodged after the recent court loss.
The court judgement savaged the accountancy firm when Federal Court judge Nye Perram ruled the fee-seeking 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.
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 which, if agreed, will reduce the available funds for even secured creditors.
There has also been no ruling on allocating costs of the stocktaking.
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BDO administrator James White had previously said the amount of the levy was "not negotiable".
"It is still a nightmare," the art collecting accountant Tom Lowenstein told Ross Greenwood's 2GB last week.
He said it was devastating for some of his art world clients yet to get their own property back.
BDO had not responded to a request for public comments, Ross Greenwood told his listeners. 
There has still not been a second creditors meeting yet held, which is another source of bewilderment by the many auction house vendors.
"There's been deafening silence as to when the second creditors meeting will be held," one aggrieved collector noted.
It has been mooted BDO could potentially face a motion to be replaced at the meeting.
Toorak businessman Jack Gringlas​ remains the biggest secured creditor, being owed $6 million. 
The administration came December 21 with the initially identified 330 creditors told no law required trust accounts for the auction proceeds.
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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.
The appointment of administrators has revealed that Mossgreen was insolvent to a significant extent.
One of its administrators, James White, gave evidence that as at March his investigations had revealed that it had $2.8 million of assets and $14.8 million of creditors including the secured creditor to the value of $6 million.
There is also the additional issue where 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 later this year.
Justice Perram noted if the outcome of that contest is that the secured creditor is entitled to rely upon his security, the return to general creditors will be nil.
Justice Perram noted "even if it is not, the return to them will be no more than 18.9 cents in the dollar (i.e. $2.8 million divided by $14.8 million) and even that is on the assumption that the trust claims fail.
Some of the present difficulty arises because Mossgreen did not conduct its inventory control systems competently despite the holding of other people’s goods being a central part of its business.
When the administrators were appointed there was uncertainty as to the status of some of the stock which was on hand, although Paul Sumner offered to work for free to assist the process.
The inventory system suggested that there were as many as 34,000 lots being held, but the limited staff (who were kept on for this purpose) thought there were between 8,000 and 12,000 lots.
"The Administrators have carefully considered Justice Perram’s judgment, as well as the options available to the Administrators to achieve an orderly resolution of the Company’s affairs," creditors were told today.
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"The Administrators have decided to appeal Justice Perram’s decision to the Full Federal Court," White advised.
A notice of appeal was filed by the adminstrators on 12 April 2018, with accompanying submissions regarding the urgency of the appeal.
The Federal Court has confirmed that the appeal is due to be heard on an urgent basis on Tuesday, 17 April 2018 not before 12.00pm before a bench of three Judges.
The Administrators applied separately for orders preserving the status quo pending the urgent appeal.
At a case management hearing held on 13 April 2018, the Federal Court made the order that the administrators are justified in causing the company to retain possession of the consignor property until the determination of the notice of appeal.
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Meddling BDO to appeal Federal Court Mossgreen loss

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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.
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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, on behalf of art collector Michele Asprey, 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 came December 21 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 at the meeting who were told no law required trust accounts for the auction proceeds.
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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.The biggest unsecured creditor stemmed from the auction of a book collection.
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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.
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BDO told to stop intermeddling in Mossgreen client goods

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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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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 came December 21 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 at the meeting who were told no law required trust accounts for the auction proceeds.
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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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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.
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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.
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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.
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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 former part-owner, Jack Gringlas.
There were 330 creditors identified at the meeting last week who were told no law required trust accounts for the auction proceeds.
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 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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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 sold the leased High Street, Melbourne premises 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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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 at the meeting suggested.
Sumner, the son of art and antique dealers, 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.
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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.
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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, on behalf of art collector Michele Asprey, 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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