Company Goes into Administration - Am I Entitled to Goods I Have Already Purchased Awaiting Delivery?

LMissBargains on 10/01/2025 - 10:42

Hi everybody, looking for some advice on the following situation:

  • I purchased a secondhand refurbished spa on the 10th of December 2024 from a local business. I paid the invoice via direct bank deposit.
  • The spa was due to be delivered on the 21st of December 2024.
  • On the 18th of December 2024 the company entered into administration and an accounting company were appointed 'Joint and Several Receivers and Managers'.

We've provided the accounting company the invoice and proof of payment, as requested, but have had zero confirmation that we'll be allowed to pick the spa up. We have been told that it is "owned by the company" and that they need to locate and identify the spa within the warehouse, based on the information on the invoice, before they can provide any further details.

We are (obviously) concerned that we'll be told we cannot pick the spa up as it's "company property", or even that they "can't find it", and don't know what rights we have.

  1. Do we have the right to visit the warehouse when it's opened to see if the spa is there ourselves?
  2. Given we've paid the invoice, and were awaiting delivery, is the spa owned by us or as we've been told, now owned by the administration company?
  3. If they can't locate the spa, are we entitled to receive a refund as the goods were never provided?
  4. If the outcome is that we cannot collect the spa, should we spend more money seeking legal aid or is this a fight we can't win?

Thanks for reading and any advice you might have :)

General Discussion

Comments

  • Protractor on 10/01/2025 - 10:50
    +4

    Into admin generally signals no cashflow. I'd day you have a slight chance of getting the spa if you negotiate with the accounting company direct.There might even be extra fees. You would need to prove the spa they have is the one you bought.I'd say you have less chance of a refund.The receivers get fed first
    This is all an opinion, not legal advise advice

    • HeWhoKnows on 11/01/2025 - 20:06
      -1

      If OP had simply asked Google the question, here is what OP would have the following general "legal advice":

      Consumer rights when a company goes bust

      Consumers will be affected by the appointment of an external administrator and may become an ‘unsecured creditor’ if they have paid in full for goods or services to be collected or delivered later.

      The Corporations Act 2001 (Cth) determines the order in which creditors are repaid money.
      Consumers will generally be considered to be ordinary unsecured creditors, which will mean they are at the bottom of a, usually, very long list of unsecured creditors.

      If the Company is still trading

      During a period of external administration, companies often continue trading for a time, under the control of the external administrator. If the external administrator has announced that the company will honour specific orders or transactions – for example, gift cards – you should follow the directions given by the administrator, as quickly as possible.

      If the Company is no longer trading

      If the company ceases trading, consumers will need to register with the external administrator as an ordinary unsecured creditor to recover their money. The insolvency process will determine whether consumers receive the goods paid for, a full or partial refund, or potentially nothing.

      In addition, consumers who have paid for goods that have not been received using a credit or debit card, may have chargeback rights that enables them to obtain a refund from their card issuer. The Australian Competition and Consumer Commission recommends that those consumers contact their card issuer straight away, as there are generally conditions and time limits on making a chargeback claim.

      Unfortunately OP paid via Direct bank deposit so the last course of action is not an option for OP, sadly.

      Source: https://bakerlove.com.au/consumer-rights-company-goes-bust/

    • MissBargains on 13/01/2025 - 09:17

      Yes, we have been attempting to negotiate with the accounting company directly but not getting anywhere at the moment - they have other priorities and its difficult to even get them on the phone to talk to.

      • Love a bargain on 13/01/2025 - 13:45

        The administrator will probably wants to take its time to do a stocktake of all inventory and outstanding sales/ delivery (and maybe also to match each of those with the physical item it is for) before deciding on what to do with them, instead of negotiating with each individual buyer.

    • Nucleus Acumbens on 13/01/2025 - 12:18
      +1

      Generally speaking, where an unconditional contract exists for the purchase of specified goods, ownership of the goods passes to the buyer when the contract is made and it is immaterial whether the time of payment and/or the time of delivery is postponed.

      NSW s23 sale of goods act = intention more sections from s21 onwards for different scenarios.

      => you will need to identify the specific spa your contract relates to.

  • jv on 10/01/2025 - 10:51
    +7

    Company Goes into Administration - Am I Entitled to Goods I Have Already Purchased Awaiting Delivery?

    Nope…

    You will have to join the list below all the creditors.

    This is all an opinion, not legal advise advice

  • mskeggs on 10/01/2025 - 10:52
    +6

    Unfortunately, you will join the queue of creditors. And as an unsecured creditors, not near the front.
    I would 100% go and see if I can convince someone to give it to me, you will likely find disgruntled employees who will happily screw over the boss who left them out of pocket, but I suspect you might have sat on it a bit too long.
    This will technically make you a target of the administrators as you have their spa, but possession is 9/10ths of the law, as the saying goes, and they will probably not chase too hard.

    • fantombloo on 10/01/2025 - 12:48

      I'd also go and try to collect. If the administrators find record of it they'd surely consider clawing it back but also considering its physical heft they might just not bother.

  • Dollar General on 10/01/2025 - 11:01
    +3

    Nope. You join the line as a creditor now

  • ThithLord on 10/01/2025 - 11:02

    Mate, that's bloody rough. Keep us updated!

  • wetsandwich on 10/01/2025 - 11:05
    +1

    Long story short, no.

    It's very unfortunate that you didn't pay with credit card.

    The money will be used to pay other businesses that they owe money to first, and employees/super will come before you as well.

    I would personally rock up and see what's going on at the location and see if someone will let you take the item, otherwise the administrators will basically just bleed dry what's left into their own pockets, that's the way it usually goes anyway. Everyone else gets cents on the dollars if anything. And even then it will probably take years to wind up so that they can charge as much as possible.

  • scrambledeggs on 10/01/2025 - 11:05

    Im not a lawyer but I think the administrators own it now. If the company goes into liquidation they will auction all assets, pay off their staff's wages first then reimburse you whatever % is left of original purchase. There's almost no point getting legal aid.

  • MS Paint on 10/01/2025 - 11:06
    +4

    There will be an opportunity to repurchase your spa when it goes to auction to recover costs.

  • prodrome on 10/01/2025 - 11:11

    They'd have been trading insolently at that point in time. I would go and collect it and Karen it if necessary.

  • pegaxs on 10/01/2025 - 11:23
    +1

    Nope… You go to the absolute bottom of the "they owe you something" list.

    It usually goes to employees first, then suppliers, then investors, then liquidators/administrators, and IF there is anything left in the kitty, you may get something like 5 to 10 cents on your dollar back… IF there is anything left over… (hint: after wages, suppliers and administrator fees, there is usually nothing.)

    • Dollar General on 10/01/2025 - 11:24
      +2

      First to be paid is secured creditors, which quite often is directors or related parties or banks

      • pegaxs on 10/01/2025 - 11:30
        -2

        Yeah, I was fixing that with an edit and you replied blocking me. But yes, I forgot… secured creditors comes before anyone and so does the "liquidators fees"…

        • secured creditors (things like banks, credit holders, mortgage holders)
        • costs and expenses of the liquidation, including liquidators’ fees (of course they get their nose in the trough first)
        • outstanding employee wages and superannuation
        • outstanding employee leave of absence (including annual leave and long service leave)
        • employee retrenchment pay
        • unsecured creditors (<—- OP, you are here)
        • Love a bargain on 10/01/2025 - 16:08

          Liquidation costs come before secured creditors

          • pandadude on 11/01/2025 - 13:09
            +1

            @Love a bargain: That's assuming there is money. Sometimes liquidation don't get paid and they will only do the legal minimum.

            It is a negotiation against the liquidation and secured creditors if there any value.

            Administration are more likely to be helpful as they will want the business to be restructure and sold. You can negotiate with them if you are a key unsecured creditor.

            • Love a bargain on 11/01/2025 - 21:04
              -1

              @pandadude: How much money the company still has does not change the order of payment. Liquidation costs still ranks ahead of secured creditors. If they don't get paid in full, no one else will receive a cent.

        • mikekiwimike on 11/01/2025 - 08:26
          +1

          Isn't ATO at the top of the list?

  • askbargain on 10/01/2025 - 11:28
    +1

    Go at night and collect. Do not pass go.

    • Porker on 10/01/2025 - 11:36
      +4

      Go directly to jail :p

      • JIMB0 on 10/01/2025 - 20:04
        +1

        Go during the day when they're open and take it. It's the property of the op as they have an invoice and proof of payment.

  • GordonD on 10/01/2025 - 11:51
    +2

    https://www.lavan.com.au/advice/restructuring_insolvency/buy…

    This was a case where goods had been paid for before the company went into administration, but hadn't been delivered. The administrators sold the company and all its assets, but question remained about those particular goods. The administrators were of the view that title in the Relevant Goods had passed to the Relevant Customers. Importantly, the secured creditors of Brosa shared this view.

  • Naigrabzo on 10/01/2025 - 12:27

    Why didn't you pay witha credit card????? Genuine question.

    • BLAIL on 10/01/2025 - 13:07

      how much is a 8 person spa nowadays? Even a refurb one? my credit card limit is 6k.

      • mskeggs on 10/01/2025 - 13:16
        +1

        You're probably not in the market for an 8 person spa with a $6k limit!

    • Duckie2hh on 10/01/2025 - 13:41

      save 1.5% surcharge

    • MissBargains on 13/01/2025 - 09:15

      Too much for the credit card - its a large swim spa, but hindsight we should have split the payment and put what we could on the credit card.

      • Naigrabzo on 13/01/2025 - 10:21

        understood. Something for all of us to learn from.

      • Love a bargain on 13/01/2025 - 13:42

        could have prepaid $ into the CC (i.e. making it goes into debit) before making the purchase

  • Love a bargain on 10/01/2025 - 16:43

    Q1. If the business is still trading and if the warehouse is still opened to public, can't see why you can't attend the premises. Whether you can find it or if you can do anything while you are there is another matter. Although the location of the spa and any "sold" sticker/ invoice that you might find on the spa might help with your argument that it is legally yours. Don't mention your conversation with the administrator and maybe just ask the staff there if you can arrange your own pick up since you've already paid for it. If they say "yes", happy days.

    Q2. There are precedents that go both ways.

    Did you go to their warehouse, inspect that particular spa, agree to purchase that particular unit and paid for it? If so, you probably stand a better chance in claiming that you already own that particular spa (not just a spa) and is merely waiting for it to be delivered. (As in you have purchased that unit and they are just holding it temporarily for you. Just like when you unexpectedly buy a bulky item while out shopping and have to go home to get the car to pick it up. The store would slap a "sold" sticker, etc on the item and put it aside for you.) However, you might have to write off the delivery charge you have already paid and either arrange your own transportation or pay the administrator again for that.

    Failing that, you will join the line of unsecured creditors and unlikely to see much of your $ back.

    Q3. The company entered administration because it's strap for cash, it'd be almost impossible for you to be offer a refund.

    Q4. No point. Take them to small claim if you want but no point in paying for legal advice.

    A couple of references for you:

    https://www.accc.gov.au/consumers/stay-protected/when-a-busi…

    Sometimes, businesses under administration continue trading.

    During this time they may:

    • deliver a product or service you have paid for, or
    • honour some offers or transactions, such as gift cards or lay-bys.

    The administrator may place specific conditions on honouring transactions. For example, only honouring gift cards if people spend an equivalent amount on products or services to the amount redeemed on the gift card transaction.

    Sometimes, an administration process may result in the sale of the business that has gone bust to a new business. Where this happens, the new business is generally able to choose what liabilities of the old business it will take on. For example, the new business may or may not agree to honour all outstanding credit notes.

    Check the administrator’s announcements, or the announcements of the new business that has purchased the business that went bust, and follow any instructions they give you.

    https://www.consumer.vic.gov.au/consumers-and-businesses/pro…

    In some instances, you may be able to claim your products if:
    - you have a contract to purchase them, and
    - you have paid for them in full, or you pay the liquidator the balance of what you owe, and
    - the contract is not a lay-by agreement.
    If the liquidator releases your products, you may have to collect them yourself or organise delivery even if your contract states that the company will deliver them to you.

  • joshash on 11/01/2025 - 08:46
    +1

    Corporate insolvencies are at near record levels, going to be a lot more of this going on.

  • Hector on 11/01/2025 - 09:58
    +3

    I once had a fence (mostly) built.

    Paid by credit card

    Builder did a runner and went into administration.

    I disputed the charge and got my money back. And I had a fence.

    I feel bad for the subbies…

    But sometimes the 1-2% surcharge can prevent loss

  • 82norm on 11/01/2025 - 10:42
    +1

    Slip the security guard and anyone left working there a $50 to let u in and collect your item. Crappy situation, been there before.

  • MissBargains on 13/01/2025 - 09:24
    +1

    Thanks to everyone that took the time to comment, unfortunately you've all confirmed our fears and our chances of getting the spa are looking slim.
    We're still holding onto hope but only because its depressing to think about otherwise!

    • Naigrabzo on 13/01/2025 - 10:21
      +1

      can you please update as you go along? thanks.

      • MissBargains on 17/01/2025 - 18:17

        Update from today:

        • The accounting company who are the appointed administrators have given us the opportunity to re-purchase the spa from them for an additional1/3 of what we already paid.
        • Naigrabzo on 19/01/2025 - 12:40

          Thanks for that update…. I didn't realise they can do that!

  • Nucleus Acumbens on 13/01/2025 - 12:27
    +1

    According to s21 - 23 of the sale of goods act, NsW, you become owner of the spa when you formed the contract to purchase it.

    (Similar laws will apply in other states).

    Thus, it seems ownership has passed to you, you own the spa and the administrators cannot retain it or consider it as possessions of the liquidating company as they no longer have legal ownership of the spa.

    *assuming there is some kind of proof which spa the contract relates to.

    Could well be legit that administrators are acting cautiously to ensure they don't incorrectly dispose of property that still belongs to the company. I'm going to assume they have to take some kind of inventory to establish who owns what before they start distributing goods in their possession.

  • Benana on 13/01/2025 - 21:40

    I work in the industry and you are an unsecured creditor. It is unlikely you will get your money back or the spa.

    The best way to get your goods back is to hassle as much as you can so you are more trouble that it is worth to deal with for the administrators.

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