A repeat of Dick Smith’s December sale is on the cards thanks to a Federal Court ruling.
THOUSANDS of cut-price television sets are bound for Dick Smith shelves, just in time for the mother of all fire sales.
Administrator Ferrier Hodgson has won the right to sell the TVs, which have a wholesale value of $1.8 million, after the Federal Court yesterday ruled on a shipping dispute that held them in legal limbo.
It all started when the Chinese manufacturer, Shenzhen MTC, got wind of Dick Smith’s collapse on January 4.
The following day, the court heard, the company scrambled to recall 17 containers filled with televisions that it had shipped to Australia.
Three of the containers had already been released by shipping company Toll, but the remaining 14 would end up gathering dust in warehouses while a legal dispute played out between Dick Smith, Toll and Shenzhen MTC.
Understandably, Shenzhen was concerned it might never be paid for the goods, with Dick Smith having been placed in voluntary administration owing $390 million to creditors.
The court heard that Shenzhen sent Toll an email on January 5, which read: “DSE: please urgently hold cargo, and recall. Urgent Case!”
Two days later, Toll let Dick Smith’s contractor pick up the TVs. But they ended up locked in bonded warehouses after Toll refused to pay $1164 worth of outstanding customs duties.
Receivers Ferrier Hodgson has six weeks to sell the TVs. Picture: Annette DewSource:News Limited
Dick Smith’s direct debit arrangement with Customs had been cancelled on January 4, and Toll refused to pay the bill, Federal Court Justice Steven Rares said in his written decision.
“There is no intelligible basis before me as to why Dick Smith could not either re-establish such an arrangement if it chose or just pay the six outstanding $194 fees to secure release of the cargoes,” Justice Rares wrote.
“The customs payment deed did not prevent Dick Smith from making such a payment [and] Dick Smith was under no contractual or other constraint from making a payment to Customs to release the cargoes from being in bond.”
Justice Rares found that Dick Smith was entitled to take possession of the TVs, with Toll to be liable for damage to Shenzhen MTC for having wrongly released them, with the amount to be assessed.
“The receivers are conducting closing down sales of Dick Smith’s business over about the next six weeks,” Justice Rares wrote.
“They hope to sell the disputed cargoes to engorge the receipts of that process while leaving MTC in the position of being an unsecured creditor.”
And that’s what is about to happen — as soon as someone pays the storage bill for the disputed containers, which now exceeds $100,000.
A spokesman for Dick Smith’s receivers, Ferrier Hodgson, confirmed that the TVs would be sold “through the stock realisation sale process currently underway as part of the controlled store closure program”.
The firm has previously said it would close its 301 Australian and 62 New Zealand stores by the end of April, meaning it has six weeks to offload the TVs.
Online retailer Ruslan Kogan announced yesterday that he would take over the Dick Smith brand and run its digital store.
Kogan buys Dick Smith online0:15
Dick Smith will become an online only retailer after its e-commerce business was purchased by Kogan.com.
