Reference no: EM133211518

The liquidator of BBQ Brothers Pty Ltd (In Liq) (Company) is seeking directions from the NSW Supreme Court as to whether title to various items of stock held by the Company has passed to customers. The Company supplied barbeque equipment to customers who would pay upfront before delivery of the items. At the time the Company went into voluntary administration and subsequently liquidation there were several stock items held in the warehouse. When customers placed orders these were logged on the online system used by the company. Sometimes stock would be set aside and physically labelled with the customers details. Unfortunately, the liquidator has discovered that the online system does not provide an accurate record of the allocation of stock. There is some stock that is not registered on the online system as well as items that have multiple orders and not enough stock to fulfill all of them. It is the practice of the Company not to treat the order as closed (and not to deliver or make the goods available for collection) until the whole order was able to be fulfilled.

How would the Court direct the liquidator with respect to the following categories of stock:

1. Category A Stock: being stock for which a customer has paid in full, where there is sufficient stock held at the warehouse to fulfil the customer's entire order and the stock has been allocated by the Company to the customer's order by the location of the stock and the placement of a label recording an individual customer's details on that stock item;

2. Category B Stock: being stock for which a customer has paid in full and their details have been placed on the available stock, but where there is insufficient stock held in the warehouse to fulfil the entirety of the customer's order;

3. Category C Stock: being stock for which a customer has paid in full and there details have been placed on the stock, but where there are more open customer orders for that stock on the online system than there is stock available at the warehouse to fulfil the order.