The administrators of failed auction house Mossgreen have failed in a bid to charge antiques and collectibles owners more than $1 million to reclaim thousands of items still held by the business.
On Monday the Federal Court ruled that administrators BDO acted outside their responsibilities in conducting a $1.05 million stocktake of artworks and other collectible pieces held by Mossgreen and were not entitled to reclaim the money from the owners of the items.
BDO had sought a court order to support its plan to charge owners of some 3,500 antiques, artworks and other valuables $353 per lot to reclaim their items from Mossgreen as a way of recouping the expense of the stocktake.
Mossgreen went into voluntary administration in December owing creditors $14.8 million and leaving administrators to sift through a huge inventory described by Federal Court Justice Nye Perram as not having been controlled “competently”.
While the inventory system suggested there were up to 34,000 lots held by Mossgreen, staff thought there were just 8,000 to 12,000.
The Federal Court found BDO acted outside their responsibilities in conducting the $1.05 million stocktake and were not justified in levying the reimbursement charge on property owners.
One Mossgreen client, in order to reclaim a consignment of drawings, prints, antiques and pottery worth between $52,000 and $89,000, would have been forced to hand over more than $104,000, the court said.
Justice Nye Perram, in his ruling, said that the administrators were “intermeddling in other people’s goods” when they had not been invited to and so were not performing their proper role.