DIGIORGIO FAMILY WINES PTY LTD [2026] SASC 80

Applicant: DIGIORGIO FAMILY WINES PTY LTD Counsel: MR M DOUGLAS WITH MR G HALLAHAN - Solicitor: O'HALLORAN LAW First and Second Respondents: RESCHKE PTY LTD (RECEIVERS AND MANAGERS APPOINTED) (IN LIQUIDATION) AND SIMON RICHARD MILLER AS LIQUIDATOR OF RESCHKE PTY LTD (RECEIVERS AND MANAGERS APPOINTED) (IN LIQUIDATION) Director of Company: MR S MILLER Third to Fifth Respondents: RICHARD ALBARRAN, BRENT TREVOR-ALEX KIJURINA, AND DAVID ALLAN INGRAM AS RECEIVERS AND MANAGERS OF RESCHKE PTY LTD (RECEIVERS AND MANAGERS APPOINTED) (IN LIQUIDATION) Counsel: MR H HEUZENROEDER WITH MR D KELLY - Solicitor: MCKINNON LAWYERS Sixth to Ninth Respondents: RESCHKE VINEYARDS PTY LTD, BURKE ROBERT STANLEY RESCHKE, PETER WESTLEY PTY LTD, AND MELLOR OLSSON No Attendance Hearing Date/s: 19/05/2025 to 23/05/2025, 29/05/2025, 02/06/2025, 04/08/2025, 21/08/2025 to 22/08/2025, 01/10/2025 to 02/10/2025, 13/11/2025 File No/s: SCCIV-20-003024 B SUPREME COURT OF SOUTH AUSTRALIA (Civil) DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment. The onus remains on any person using material in the judgment to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court in which it was generated. DIGIORGIO FAMILY WINES PTY LTD v RESCHKE PTY LTD (RECEIVERS & MANAGERS APPTD) (IN LIQ) & ORS [2026] SASC 80 Judgment of the Honourable Chief Justice Kourakis 29 May 2026 CORPORATIONS - RECEIVERS, CONTROLLERS AND MANAGERS - DUTIES AND LIABILITIES - LIABILITIES - PERSONAL LIABILITY EQUITY - GENERAL PRINCIPLES - EQUITABLE CHARGES AND LIENS - GENERALLY This is an application by DiGiorgio Family Wines Ltd (DFW) brought against Hall Chadwick, the receivers of Reschke Pty Ltd (in liquidation) (Reschke) for the payment of their contractual fees and charges, levied for storage of Reschke’s bulk wine and some barrels and other items stored in DFW’s winery during the course of Hall Chadwick’s receivership. The primary controversy concerns whether the fees claimed by DFW for storage of the wine during the prolonged storage period, for which Hall Chadwick were liable pursuant to s 419A of the Corporations Act 2001 (Cth), were reasonably incurred for exclusive purposes of raising the fund. Hall Chadwick refused for a protracted period of time to consent to DFW selling the wines itself in order to recover its pre-existing fees and charges, secured by liens. When Hall Chadwick finally consented to the sale, the proceeds were insufficient to meet DFW’s charges for warehousing the wine in periods preceding Hall Chadwick’s receivership. -- 1 of 85 -- Held, dismissing Hall Chadwick’s equitable lien claim and determining that Hall Chadwick remained liable for the storage fees incurred during the receivership: 1. Hall Chadwick’s sale strategy was unreasonably conducted in a way which disadvantaged the interests of DFW. 2. Hall Chadwick unreasonably pursued the Reschke/AustAgri transaction, neglecting to seek advice and directions, or seeking alternative resolutions of the competing claims to priority of its appointor and DFW, and the resulting delays increased storage liabilities and caused devaluation of the wine. 3. It is inequitable to allow Hall Chadwick’s claim against the proceeds of sale effected by DFW when it could not itself have sold the wine without first discharging DFW’s lien, which exceeded the sale proceeds which Hall Chadwick could possibly have realised. Corporations Act 2001 (Cth) ss 419, 420; Warehouse Liens and Storage Act 1990 (SA); Personal Property Securities Act 2009 (Cth), referred to. In re Universal Distributing Co Ltd (In Liquidation) (1933) 48 CLR 171; Stewart & Anor v Atco Controls Pty Ltd (In Liq) (2014) 252 CLR 307; Primary Securities Ltd v Willmot Forests Pty Ltd (In Liq) (2016) 50 VR 572; Batten v Wedgwood Coal and Iron Co (1884) 28 Ch D 317; In re Regent’s Canal Ironworks Co; Ex parte Grissell (1875) 3 Ch D 411; Dean-Willcocks v Nothintoohard Pty Ltd (in liq) [2006] NSWCA 311; Volkswagen Financial Services Australia Pty Ltd v Atlas CTL Pty Ltd (receivers and managers appointed) (in liquidation) [2022] NSWSC 573; Thackray v Gunns Plantations Ltd (2011) 85 ACSR 144; Re S & D International Pty Ltd (In Liq) Managers & Receivers Appointed [2009] VSC 225; 13 Coromandel Place Pty Ltd v CL Custodians Pty Ltd (1999) 30 ACSR 377, considered. -- 2 of 85 -- DIGIORGIO FAMILY WINES PTY LTD v RESCHKE PTY LTD (RECEIVERS & MANAGERS APPTD) (IN LIQ) & ORS [2026] SASC 80 Civil KOURAKIS CJ. Introduction 1 This is an application by DiGiorgio Family Wines Pty Ltd (DFW) brought against Hall Chadwick, the receivers of Reschke Pty Ltd (in liquidation) (Reschke), for the payment of their contractual fees and charges, levied for storage of Reschke’s bulk wine and some barrels and other items stored in DFW’s winery during the course of the Hall Chadwick receivership from May 2019 to November 2020 (the prolonged storage period). The warehousing of the wines during the prolonged storage period was necessitated by Hall Chadwick’s refusal to consent to DFW selling the wine itself in order to recover its pre-existing fees and charges which were secured by liens. 2 Hall Chadwick were appointed as receivers and managers by Reschke Vineyards Pty Ltd (Reschke Vineyards) and its principal, Mr Burke Reschke (Burke), who had taken an assignment of certain National Australia Bank (NAB) charges connected to its lending to Reschke. 3 DFW secured an order for the winding-up of Reschke in 2018 but it never took any steps to appoint a liquidator. Mr Simon Miller of Clifton Hall was appointed the liquidator of Reschke on 22 June 2018. On 30 July 2018, NAB appointed the principals of the firm Ferrier Hodgson to be receivers of Reschke’s assets. On their appointment, Ferrier Hodgson proceeded to sell some of Reschke’s assets, including wine stock and vineyards. Their appointment in respect of the assets held by DFW was terminated in 2018 and the receivership came to an end on 9 May 2019. 4 Ferrier Hodgson paid DFW’s fees for the storage of the Reschke bulk wine warehoused there from general funds realised in the course of their receivership. The only direct deduction made by Ferrier Hodgson from the proceeds of the sale of wine held by DFW were the sale costs, commission, and dispatch fees. In his evidence, Mr DiGiorgio attributed Ferrier Hodgson’s payment of DFW’s fees to its entitlements under his grape processing agreement with Reschke whereby DFW was contracted to crush the Reschke’s grapes and store and care for the wine it produced (the GPA). The GPA was a registered security interest. Hall Chadwick contest that assertion. An agreement struck between DFW and Ferrier Hodgson provided for the deduction of only those costs reasonably invoiced by DFW for providing samples, releasing the wine, and reporting on the remaining wine. The balance of the sale proceeds was paid into a security account with NAB. Ferrier Hodgson reserved the right to bring an interpleader action in respect of that account. Be that as it may, neither Mr DiGiorgio’s nor Ferrier Hodgson’s -- 3 of 85 -- [2026] SASC 80 Kourakis CJ 2 subjective opinions on the basis for those payments has any legal significance in respect of this controversy between DFW and Hall Chadwick. 5 What is important is that by paying the fees, Ferrier Hodgson discharged its personal liability to DFW pursuant to s 419 of the Corporations Act 2001 (Cth) (the Act) during the course of their receivership from the general proceeds of their receivership. How that might have affected the interests of other creditors need not be considered here. Importantly, the agreement established a mechanism for the judicial resolution of any dispute. Ferrier Hodgson did not seek to deny DFW its fees by asserting the priority of the NAB security under which it was appointed. Hall Chadwick on the other hand, as I found in the judgment referred to immediately below, wrongly, chose to withhold those payments and disputed the foundation for, and quantum of, DFW’s lien. 6 In a judgment delivered in the course of these proceedings on 2 June 2025, I determined the following preliminary issues.1 7 I found that DFW held a worker’s and warehouse storage lien over the Reschke wine. I dismissed the contention of Hall Chadwick that the wine was never deposited, and that only the grapes were, because it was overly formalistic. I held that by depositing the grapes with DFW, both the grapes, and the product, which it was anticipated would result from the processing DFW was contracted to undertake, were ‘deposited’ with DFW. 8 I found that DFW had not lost its lien by demanding from Hall Chadwick, as a condition of the release of the wine, more than was due to it. The email exchange between DFW and Hall Chadwick in 2019 shows that there was never a demand by Hall Chadwick for release of the entirety, or any part, of the wine stored at DFW’s premises. Had there been such a demand for the whole, or a particular parcel of wine, Hall Chadwick were entitled to know precisely what payment they had to tender to exercise their power to take control of it, but that did not happen. 9 I also found that the GPA did not abrogate DFW’s worker’s lien and warehouse lien even on the premise that the word ‘customer’ first appearing should have read ‘processor’. I did not accept Hall Chadwick’s contention that, if additional security is given over goods which are the subject of a lien, that, and to the extent to which the same goods covered by both, abrogates the pre-existing lien. Rather, the authorities establish that a lien is only abrogated when additional security is given in exchange for the release of the goods. 10 In respect of s 420 of the Act, I held that it empowered receivers to exercise property rights over the subject property but did not override any pre-existing right to retain the property which a lienholder might have. 11 Next, I held that Reschke was liable for the storage of the wine whilst it remained in the DFW winery. I found that, on assuming control of that property 1 FDN 211. -- 4 of 85 -- [2026] SASC 80 Kourakis CJ 3 as receivers for the purpose of enforcing the security interest then held by Reschke Vineyards, Hall Chadwick did not ask that the Reschke wine be handed over to it. Rather, Hall Chadwick proceeded on the tacit understanding that the wine would remain there whilst it attempted to sell it. In those premises, Hall Chadwick incurred a liability for DFW’s fees and charges over the period of its receivership pursuant to s 419 of the Act. 12 Finally, I held that the liability imposed by s 419 is not a liability in negligence, default, breach of trust or breach of duty and, therefore, is not a liability which can be excused pursuant to s 1318 of the Act. 13 By reason of my determination that DFW’s security had priority over the security of NAB charges to which Hall Chadwick had been appointed, and that there was no reason to excuse Hall Chadwick from the liability imposed by s 419 of the Act, Hall Chadwick has fallen back on an equitable claim, of the kind commonly referred to as a Universal Distributing lien,2 against the proceeds of the sale of the wine, held by DFW. It claims to be entitled to recover from those proceeds to the extent of its liability to DFW for the storage charges pursuant to s 419 of the Act. 14 The principle now referred to as the Universal Distributing principle was articulated by Dixon J in In re Universal Distributing Co Ltd (In Liquidation) (Universal Distributing) as follows:3 If a creditor whose debt is secured over the assets of the company come in and have his rights decided in the winding up, he is entitled to be paid principal and interest out of the fund produced by the assets encumbered by his debt after the deduction of the costs, charges and expenses incidental to the realization of such assets (In re Marine Mansions Co.). The security is paramount to the general costs and expenses of the liquidation, but the expenses attendant upon the realization of the fund affected by the security must be borne by it (In re Oriental Hotels Co.; Perry v. Oriental Hotels Co.). The debenture-holders are creditors who have a specific right to the property for the purpose of paying their debts. But if it is realized in the winding up, a proceeding to which they are thus parties, the proceeds must bear the cost of the realization just as if they had begun a suit for its realization or had themselves realized it without suit (cf. In re Regent’s Canal Ironworks Co.; Ex parte Grissell; and see Batten v. Wedgwood Coal and Iron Co.). In applying this principle, only those expenses appear to have been thrown against the fund belonging to the debenture-holders which have been reasonably incurred in the care, preservation and realization of the property. In the present case the liquidator has employed a material part of his time and energies in recovering moneys, both uncalled capital and debts, which enure for the debenture-holder, and in so far as these services increase the remuneration which he receives, I see no reason why the burden should not be thrown upon the proceeds. The question is not whether moneys available for unsecured creditors should be relieved at the expense of the security. In such a case it may be said that the service of collecting enough to discharge the debenture must in any event be performed in order that a surplus may then arise in which the unsecured creditors may participate. The question in the present case is whether the liquidator can charge against the fund passing through his 2 In re Universal Distributing Co Ltd (In Liquidation) (1933) 48 CLR 171. 3 (1933) 48 CLR 171 at 174-175. -- 5 of 85 -- [2026] SASC 80 Kourakis CJ 4 hands as between himself and the person to whom it is payable, so much of the remuneration fixed for work done in the winding up as is referable to the calling in and conversion of the assets producing the fund. I see no reason why remuneration for work done for the exclusive purpose of raising the fund should not be charged upon it. (Footnotes omitted, underlining added) 15 The primary controversy in this case is therefore whether the fees claimed by DFW for storage of the wine during the prolonged storage period, for which I have found Hall Chadwick were liable pursuant to s 419A of the Act, were reasonably incurred for the exclusive purpose of raising the fund and enured for DFW’s benefit. DFW denies that there was a sufficient nexus between the prolonged storage period and the fund obtained, when after inordinate delay, Hall Chadwick agreed to allow DFW to proceed with its sale of the wine. DFW contends that Hall Chadwick’s sales campaign was not calculated to advance the interests of DFW and that the wine lost value during the prolonged storage period. The conduct of the receivership therefore did not enure for its benefit. 16 For much of its receivership, Hall Chadwick refused DFW’s requests that it consent to DFW selling the Reschke wine on its premises. Instead, Hall Chadwick pursued a sale of all the assets as a single lot, or the Reschke business as a going concern. Hall Chadwick did so because it was attempting to serve two masters. First, during the prolonged storage period, Hall Chadwick was working to achieve a sale of all the remaining assets to a yet to be established company, which was to be a joint venture between Burke and AustAgri Pty Ltd (AustAgri), through which Burke was dreaming of a resurrection of the Reschke wine business (the Reschke/AustAgri joint venture). Indeed, Hall Chadwick’s attempts to effect that sale was the primary reason for the prolongation of the storage period. The second master was the duty Hall Chadwick owed DFW as lienors not to sacrifice the proceeds DFW might receive on a separate sale of the wine it held. The path Hall Chadwick chose to take in their service was to conduct a narrowly pitched in-house expression of interest sales campaign to establish a market floor price for the sale of the assets to the Reschke/AustAgri joint venture. 17 The strategy failed because the Reschke/AustAgri joint venture could never complete the purchase. The wine stored by DFW was eventually sold by it in November 2020, with the consent of the liquidator, DFW, and Hall Chadwick through a public wine auction house. 18 Initially, Hall Chadwick’s Universal Distributing claim also included its costs and charges for work done. That claim would have required a consideration of the extent to which its charges could properly be attributed to work performed for the purpose of safekeeping, maintaining, securing, and selling the DFW wines as distinct from work done in respect of other assets. However, Hall Chadwick later confined its claim to the extent of its liability pursuant to s 419 of the Act. 19 It should be noted at the outset that Hall Chadwick took no steps itself to secure or maintain the wine and other assets stored by DFW. There was no need -- 6 of 85 -- [2026] SASC 80 Kourakis CJ 5 to. DFW had maintained and kept it secure for many years prior to Hall Chadwick’s appointment. Indeed, such value as the wine had at the commencement of the Hall Chadwick receivership was due to DFW’s safekeeping. True it is that DFW did so because, following the liquidation of Reschke, the proceeds which might be received from wine sales was its only prospect of recouping its charges. The only services provided by Hall Chadwick which might have contributed to the proceeds ultimately realised from the wine DFW stored was its marketing of the wine. Its claim is now for the reimbursement of the warehousing charges it incurred while it marketed the wine. That was work which DFW was happy to undertake for itself, and to do so more quickly than Hall Chadwick but, for all practical purposes, was denied its right to do so by Hall Chadwick exercising its powers as receivers. Nonetheless, by leaving the wine with DFW whilst it worked on the realisation of those assets, Hall Chadwick incurred the liability for DFW’s storage fees pursuant to s 419 of the Act. It chose to do so rather than pay the outstanding charges claimed by DFW in order to release the wine from its lien, and to avoid the relocation and alternative storage costs. Of course, had Hall Chadwick wished to move the wine from DFW’s premises before, or after, any sale, it would first be required to discharge DFW’s liens for the charges incurred before its receivership. The evidence shows that the proceeds of the sale of the wine which Hall Chadwick hoped to realise pursuant to a contract with the Reschke/AustAgri joint venture would have been insufficient to recoup the cost of discharging DFW’s liens in order to release the wine. The proceeds eventually realised by DFW in a public auction, which were diminished, in part, by reason of the delay, were also insufficient to pay the fees and charges it was owed for the period preceding the Hall Chadwick receivership. If Hall Chadwick’s claim against the proceeds of the sale conducted by DFW were allowed, it would leave DFW out of pocket for the historical charges and with a much reduced claim against Hall Chadwick for the charges incurred during the prolonged storage period, even though Hall Chadwick’s vain attempt to effect a sale to the Reschke/AustAgri joint venture both increased the charges and devalued the wine. 20 The evidence shows that alternative marketing avenues were available to Hall Chadwick to realise the Reschke assets. Some were more likely to serve the interests of its appointors, and entities connected to them, who wished to purchase the assets as a whole at a price which would allow them to resurrect the Reschke business. Others would be more adapted to optimise the proceeds from the sale of wine held by DFW but would have scuttled Burke’s plans to resurrect the Reschke business. In those circumstances, the reasons for selecting one course over another, may affect the characterisation of the conduct itself. In particular, Hall Chadwick’s equity would be defeated for unreasonable partiality, and unreasonably sacrificing DFW’s interest, if it chose one marketing avenue over another in order to advance the interest of its appointors if it appreciated, or ought to have realised, that that option was likely to disadvantage DFW, but nonetheless persisted in that course regardless, and without seeking judicial directions or an alternative resolution of their competing claims. Hall Chadwick’s conduct would -- 7 of 85 -- [2026] SASC 80 Kourakis CJ 6 also be unreasonable if it unnecessarily prolonged the storage period to satisfy Burke’s dream of resurrecting the Reschke business. Claim for lien not established 21 I would dismiss Hall Chadwick’s claim that it is entitled to recover the liability it incurred pursuant to s 419 of the Act created from the proceeds of the sale of the wine held by DFW because: 1. The prolonged storage period was the result of Hall Chadwick’s unreasonable conduct in attempting to obtain a commercial solution to the conflicting interest of its appointors, on the one hand, and DFW on the other, instead of: • selling the wine warehoused by DFW separately from the other Reschke assets in accordance with independent expert advice and submitting any controversy over the proceeds to be determined by litigation between DFW and Hall Chadwick; or • seeking judicial advice and directions. 2. Relatedly, the prolonged storage period was the result of Hall Chadwick unreasonably: • embarking upon a sales campaign which was designed to attract interest from persons who wished to buy all the Reschke assets and did not facilitate the sale of parcels of the wine warehoused by DFW; • extending the time the Reschke/AustAgri joint venture could complete its offer to purchase the remaining assets for an inordinate period; • refusing to consent to DFW selling the wine it warehoused on the condition that the proceeds were quarantined. 3. The warehousing of the wine for the prolonged storage period did not enure to the benefit of DFW because the quality and value of the wine deteriorated significantly over that time, and any benefit to DFW of the marketing of the wine by Hall Chadwick in July 2019 had completely dissipated by November 2020. 4. It is inequitable to allow Hall Chadwick’s claim against a fund which is insufficient to meet DFW’s pre-existing fees and charges when Hall Chadwick could only have effected the sale of the wine, and created a fund, by discharging DFW’s lien, resulting in a fund depleted by DFW’s fees and charges which would have been a direct cost of the sale. 22 I elaborate on my reasons below. -- 8 of 85 -- [2026] SASC 80 Kourakis CJ 7 Prelude to the appointment of Hall Chadwick 23 To properly evaluate the choices made by Hall Chadwick and the purposes they were pursuing, it is necessary to first consider the circumstances of their engagement by Burke. 24 In May 2019, NAB assigned the fixed and floating charges it held over the assets of a company in the Reschke group of companies to Reschke Vineyards Pty Ltd. Burke became a guarantor of the outstanding debt to NAB. However, it appears from the correspondence to which I refer below that the assignment of the NAB charge was anticipated some months before its execution. 25 Prior to the appointment of Hall Chadwick, Burke had engaged a solicitor, Mr Luke Rowley, to urge Clifton Hall and Ferrier Hodgson to negotiate the release of the Reschke wine held by DFW. He sought an indicative price for the sale of all the Reschke wine and other assets subject to Ferrier Hodgson’s receivership. That request manifested Burke’s deep commitment to acquire all the Reschke assets to resurrect the Reschke wine business. I will refer to his purpose as the ‘Reschke phoenix strategy’. 26 On 5 February 2019, Ferrier Hodgson responded to Burke, copying in his solicitor, Mr Rowley. They noted that their appointment as receivers and managers in respect of the bulk wine held by DFW was revoked on 20 December 2018, but informed Burke that an offer of $3.5 million inclusive of GST, for all the Reschke assets, would be considered favourably by them. They intimated that they could delay the sale of the assets, but that Burke should deliver his offer in writing by 11 February 2019 with a settlement date of no later than 28 February 2019. I note here Ferrier Hodgson’s tight timeline for the sale to Burke. Burke failed to make any offer in response. 27 On 18 February 2019, Fisher Jeffries informed Ferrier Hodgson and Clifton Hall that Mr Rowley had conveyed to them Burke’s instructions that he would not give up the right of subrogation under the NAB security which had been assigned to him. Accordingly, he had factored into his offers the prospect of clawing back a proportion of the purchase price by enforcing his priority to the proceeds of sale over DFW liens. On the same day, Mr Miller of Clifton Hall responded to that email noting that even though Burke’s position was not entirely unexpected, it: … flies in the face of his commentary to me last week that Frank DiGiorgio should take the $1 m (based on Burke’s apportionment of the value of Reschke’s assets) at the top end and then put his hand out for a dividend with the rest of the creditors. Mr Miller rightly observed that there would be no dividend for unsecured creditors if Burke enforced his rights over the proceeds of sale as a secured creditor. The observation of Mr Miller starkly outlines the conflicting interests of Burke as the assignee of the NAB charges, and a prospective purchaser of the assets, and DFW as the holder of liens over the wine. -- 9 of 85 -- [2026] SASC 80 Kourakis CJ 8 28 An email from Mr DiGiorgio to Clifton Hall and others on 21 February 2019 asserted that, as at the end of January 2019, Reschke owed DFW more than $4.2 million in fees. On 28 February 2019, Clifton Hall’s solicitors, Fisher Jeffries, wrote to Mr Rowley informing him of DFW’s claim but noted that the sum of the invoices provided to Clifton Hall was $3,624,972.36 (inclusive of GST). 29 Between 28 February 2019 and 18 March 2019, Mr Rowley corresponded with Fisher Jeffries on the possible purchase by Burke of all the Reschke wine assets. On 28 February 2019, Fisher Jeffries emailed Mr Rowley. The email first set out the following background facts: 1. Clifton Hall and Ferrier Hodgson are considering an offer from your client or an associated entity for the purchase of all the wine owned by Reschke if clear title were provided; 2. DFW is in possession of a substantial portion of the wine asset and claims $4.5 million in storage fees even though the DFW invoices charging fees from December 2015 to 1 June 2018 totalled only $3,624,972.36 including GST; 3. Clifton Hall will not enter into any agreement to sell the wine without the co-operation of DFW (or an order of the Court compelling DFW to release the wine); 4. DFW had indicated that it would not consider any proposal unless it knew exactly how much of the proceeds of sale it would receive; 5. Clifton Hall proposed on a ‘without prejudice’ basis that DFW be paid a priority amount of $1,550,290.69 plus GST if it released the wine to allow for its sale; 6. For the proposal to be workable, Burke would need to agree to refrain from asserting any priority over that portion of the sale proceeds by way of subrogation to NAB’s charges, but Mr Rowley had indicated that Burke would not agree to defer any rights of subrogation to allow the priority payment; 7. Burke had indicated that he may be prepared to agree to a lesser sum as a priority payment but had not provided any precise quantification of the amounts in dispute. The letter concluded by requesting that Mr Rowley: (a) confirm whether Burke is prepared to reach an agreement that sees DFW being paid a priority amount from the proceeds of any sale; (b) advise whether Burke would accept the priority payment of $1,550,290.69; -- 10 of 85 -- [2026] SASC 80 Kourakis CJ 9 (c) if not that amount, state the amount he would accept, indicating the specific invoices in the attached schedule to which those payments would relate. 30 It should be noted that the mention of an ‘associated entity’ is the first reference to what was to become the Reschke/AustAgri joint venture entity. 31 Mr Rowley’s response on 6 March was dismissive of Fisher Jeffries’ position. He asserted that: (a) the offer was not acceptable; (b) any process that has regard to DFW’s claims gave it unnecessary leverage; (c) Burke would not give up any right of subrogation; (d) DFW should be told ‘in no uncertain terms’ that once the receivers and managers and liquidator commit to a sale it must give clear title. If DFW failed to agree, Burke would be the first to make an application to the Court for delivery up of the wine stocks; (e) the sale proceeds should be quarantined pending resolution of priorities, and that delivery up by DFW would be without prejudice to its claims; (f) Burke maintained the view that his offer was the best value for the wines; (g) Burke reserved his rights as against the liquidator if the liquidator did not accept the offer because of DFW’s position; (h) Burke was anxious to ‘go to documents’, and lock in the sale and settlement date. The contracts may need to acknowledge DFW’s position and the fact that it cannot give clear title. Those documents would form the evidentiary basis for the application for delivery up. 32 It may be observed that, for all the bluster, the proposal in (e) above, subject to agreement on price, did have regard to DFW’s claim by providing for resolution, by adjudication or agreement, the competing claims of Burke and DFW over the proceeds of sale. Fisher Jeffries replied on the same day as follows: (a) It was self-evident that the liquidator could not enter into a contract to deliver clear title and possession, that is subject to DFW’s possessory lien which DFW refuses to release; (b) Burke’s assertions to the effect that any process that has regard to DFW gives DFW unnecessary leverage, and that DFW’s views are largely irrelevant, are misconceived and so is the suggestion that DFW should be told that once the receiver, manager and liquidator commit to a sale he must give clear title; (c) Absent Burke signing a contract to purchase the wine on the basis that he bears the risk of obtaining possession and title clear of DFW’s lien, it is not -- 11 of 85 -- [2026] SASC 80 Kourakis CJ 10 apparent on what basis he would have any standing to apply to the Court for delivery up of the DFW wines; (d) It was noted that Burke would not give up any right of subrogation and not agree to a priority payment. DFW’s solicitors had been informed. 33 Mr Rowley replied again on the same day doing little more than reasserting his position. 34 On 15 March, Fisher Jeffries wrote to Mr Rowley referring to recent discussions and noted the following potential resolutions:4 1. Even though the original proposal was to pay DFW a priority of approximately $1.5 million, Burke was invited to submit a lower offer. 2. Quarantine an amount which Burke proposed to claim pursuant to his right of subrogation pending an application for directions by Clifton Hall to determine who is entitled to priority. 3. A contract might be signed without a warranty as to title and possession. 4. DFW to keep the wine in its possession and Burke receive the balance of funds, likely to be $750,000. 5. DFW to keep the wine in its possession. Burke to keep the label, the wine held by the receiver and pay Ferrier Hodgson’s outstanding fees of $600,000. The letter asked Mr Rowley to inform Fisher Jeffries if any of the alternatives were acceptable. It concluded by saying that Mr DiGiorgio was asking to know who the proposed purchaser was and was concerned that it might be a ‘stooge for Burke’. Mr Rowley was asked whether Burke’s identity as the purchaser might be disclosed. 35 I pause here to observe again that the position conveyed by Clifton Hall and the Ferrier Hodgson was calculated to resolve, either by consent, or by judicial adjudication, the dispute between Burke and Reschke Vineyards as assignees of the NAB charge on the one hand and DFW on the other, and thereby also resolve the conflict between them. As we shall see, the subsequent conduct of Hall Chadwick was to dispute the priority and quantum of DFW’s claim in a way which might keep the Reschke phoenix strategy alive. 36 Secondly, I infer from the position Burke took, against the advice of Clifton Hall and Ferrier Hodgson, that in his commercial judgment the viability of the Reschke phoenix strategy depended on heavily discounting DFW’s claim. As we shall see, the emails of 28 February and 15 March were sent to Hall Chadwick within about a fortnight of their appointment. On receipt of those emails, 4 Exhibit A25. -- 12 of 85 -- [2026] SASC 80 Kourakis CJ 11 Hall Chadwick, too, ought to have been alerted to the risk that Burke, and/or the Reschke/AustAgri joint venture, might not have the financial resources, or the will, to complete a purchase of the assets. 37 Finally, I observe that Burke’s rejection of the proposal to offer DFW about $1.5 million as a priority payment aligns with the offer of about $2 million which the company AustAgri, later made for all the Reschke assets. It aligns also with the apportionment suggested by Hall Chadwick to DFW of AustAgri’s offer as between the wine held by DFW and the remainder of the assets. 38 On 18 March 2019, Mr Rowley forwarded the letter to Burke asking whether ‘any of this interests you’. 39 I rely on Mr Rowley’s communications as evidence of Burke’s strong antipathy to DFW’s claims, his firm intention to pursue his rights of subrogation and to procure the wine stored there for much less than the fees claimed by DFW. So strong does Burke’s commitment to the Reschke phoenix strategy appear to be, and so strident his opposition to DFW’s claims, that I would draw the inference that he strenuously urged the principals and staff of Hall Chadwick with whom he communicated to dispute DFW’s fees. He expressed that opinion in emails to which I refer below, but I infer that he repeated that view whenever he had an opportunity to do so. 40 Fisher Jeffries replied to Mr Rowley’s email by saying that his position was misconceived and making the obvious point that the liquidator could not enter into a contract to deliver clear title and possession to the wine that remained the subject of DFW’s possessory lien. Burke’s position was communicated to Mellor Ollson, DFW’s lawyers, by letter dated 9 March 2019 in which they put a proposal for the release of the wine that would result in: • the payment of some of DFW’s storage charges and some of the liquidator’s costs; • an amount of just over $1 million being quarantined pending the resolution of the priority dispute between DFW and Burke. 41 However, an internal Clifton Hall email dated 18 March records that Mr Rowley had informed Wendy Jones of Fisher Jeffries that Burke’s ability to close the deal, even on any of those more favourable terms, was uncertain. 42 I infer from the course of those negotiations that Burke did not have the financial resources to the purchase the wine held by DFW at a price which would substantially satisfy DFW’s claimed fees. 43 On 3 April 2019, Mr Delano Lean of Fisher Jeffries wrote to Mr Rowley about the possible sale of assets to Burke’s offer. He noted that Ferrier Hodgson were no longer appointed over the wine in the possession of DFW and that that wine was subject to the competing claims of Burke, through the NAB charges, and -- 13 of 85 -- [2026] SASC 80 Kourakis CJ 12 DFW’s asserted security interest. It attached a draft contract. It asked Mr Rowley to insert the name of the proposed purchaser so that his offer could be presented by 8 April 2019. It warned that Clifton Hall would deal with the wine in the ordinary course of the liquidation process if the contract was not executed, or if settlement did not take place. The Clifton Hall timeline had been extended by about two months. 44 It is in the context of that standoff between DFW, who were demanding payment of all their charges, and Burke, who did not have the financial resources to meet DFW’s demand, that the latter sought to break the impasse by appointing Hall Chadwick as receivers. 45 On Friday 29 March 2019, a fortnight or so after Mr Rowley informed Ms Jones of the uncertainty over Burke’s offer, Leigh Dunsford, a director of the firm Stak Capital, and Mr Jovan Singh, a senior Hall Chadwick employee, met to discuss finance that Mr Dunsford was sourcing for Burke. They exchanged emails about their meeting on Thursday 4 April 2019. Mr Singh wrote asking Mr Dunsford how far advanced the financial arrangements were, and whether ‘we should now introduce the lawyers as discussed’.5 Mr Dunsford replied that, only that day he had been informed that the funds had been transferred and that they would commence drafting the documentation. Mr Albarran was copied into that email. The loan to which Mr Leigh Dunsford referred was made by AR Mortgages, the principal of which was his brother, Daniel Dunsford. Mr Singh followed up within the hour, asking Mr Leigh Dunsford to let him know when lawyers were engaged so that they could be introduced to Hall Chadwick’s solicitor. 46 On 18 April 2019, Mr Singh emailed Mr Dunsford again writing ‘as discussed it would be good if your lawyers could speak to Steve Agosta’. Mr Agosta, who was instructed by Hall Chadwick to review the documentation, and was the instructing solicitor in this action, was copied into the email. 47 Mr Albarran accepted in his evidence that Hall Chadwick accepted work on referral from Mr Leigh Dunsford.6 48 When he was taken to the email exchanges between Mr Singh and Leigh Dunsford on 4 April 2029, Mr Albarran accepted that Hall Chadwick knew something about the financing of Reschke Vineyard to enable it to take the assignment of the NAB charge but denied that they were directly involved in those financial arrangements. He testified that Burke was referred by Leigh Dunsford of Stak Capital and Daniel Dunsford of AR Cashflow or Faro Strategic Services. 49 I am unable to make any findings as to whether Burke approached Hall Chadwick to replace Ferrier Hodgson or whether he engaged Stak Capital to source a loan so that he could pay Ferrier Hodgson’s fees. Mr Albarran, 5 Exhibit A1, TB498. 6 T540. -- 14 of 85 -- [2026] SASC 80 Kourakis CJ 13 Mr Kijurina and Mr Singh denied they had any involvement in procuring the necessary finance. 50 I am not prepared to accept their evidence unless it is supported by other evidence or is otherwise manifestly probable. They appeared to have very little, if any recollection, other than that which was recorded in documents created in the course of the receivership. I accept, having regard to the number and complexity of matters with which they have dealt since the Reschke receivership, that their recollections were bound to be imperfect and much less than comprehensive. However, their unhelpful steadfast adherence to testifying within the limits of the written documents they were shown, with little attempt to share their independent or refreshed recollections, left me with the clear impression that they were resisting any probing into issues or circumstances which might reveal evidence adverse to their case. 51 That resistance is best exemplified by Mr Albarran, who, when questioned about events noted in correspondence, tended to do little more than acknowledge the record, or take issue with whether the examiner’s question accorded precisely with what was recorded. Another example of that resistance is found in the testimony of Mr Singh, who sought leave to refer to his affidavit so that his answers given throughout his testimony were consistent with it.7 I mention other examples below. 52 What is clear is that the finance provided to Reschke Vineyards and Burke by AR Mortgage was conditional on the appointment of Hall Chadwick as the receivers. The two most obvious reasons for AR Mortgages so conditioning its loan are, first, that Hall Chadwick introduced Burke to the Dunsfords after they had been approached by Burke to act as receivers, or, alternatively, that Stak Capital and/or AR Mortgages had in the past provided finance for the purpose of appointing receivers on condition that Hall Chadwick be appointed. A loan made for the purpose of changing receivers carries inherent risk. It is completely natural that a lender would seek to ameliorate that risk by insisting on the appointment of receivers which it trusted would do the job cost-effectively. However, no such explanation was given by Mr Albarran, Mr Singh, or Mr Kijurina for the inclusion of the condition. In the absence of any evidence from the principal of AR Mortgage, Mr Dunsford, and having regard to the unsatisfactory evidence of Mr Kijurina, Mr Singh and Mr Albarran, I cannot make a positive finding one way or another as to who initiated the introduction of Burke. 53 On 5 April 2019, Burke emailed Mr Leigh Dunsford, and Mr Shannon Davis and Mr Chris Olver of the firm which traded as Faro Strategic. Faro Strategic provide corporate advisory services. The email informed the recipients that the balance required by Ferrier Hodgson for their outstanding fees was $707,756.00 but that they expected to receive $120,000 from the proceeds of sales made to Woolworths on the preceding Monday. Burke calculated a payout figure of 7 ‘-so I can probably refer to my affidavit … I just want to be consistent with my affidavit’, T686. -- 15 of 85 -- [2026] SASC 80 Kourakis CJ 14 $590,000, of which he could cover something a little less than $180,000. Presumably he sought a loan for the balance. He concluded:8 It will obviously be tight for a while but some money in the next bigger loan, to bottle label process store and ship wines, would be very beneficial to the final outcome for all. 54 I infer from this exchange that the loan being discussed by Mr Dunsford and Mr Singh was to pay out the remaining monies owing to Ferrier Hodgson from the period in which they were the receiver/managers of the Reschke assets. The ‘bigger loan’ as we shall see, was a multimillion-dollar loan to fund the Reschke phoenix strategy, on which Burke had consulted Faro Strategic. 55 Mr Dunsford sent Burke’s email of 5 April to Jovan Singh on 16 April 2019. The evidence supports an inference that Mr Singh was aware of the Reschke phoenix strategy either from discussions with Mr Leigh Dunsford or from the email or both. The email is pellucid in describing the purposes of the bigger loan: ‘to bottle label process and ship wines’. I would expect Mr Singh to have noticed Burke’s intimation that ‘it will obviously be tight for a while’ and therefore to have also noticed the reference to the ‘next bigger loan’. Mr Singh did not, by any reply email, express any surprise at the mention of a ‘bigger loan’. 56 Mr Singh gave the following testimony about that email.9 Q. Does that help you to agree with my proposition that you were engaged with Faro in relation to Mr Reschke’s efforts to obtain refinance. A. Well, I’ll say that I received an email from Faro providing some Q. The effect of these communications when you received them were understood by you to indicate that Mr Reschke was looking for immediate refinance as a stepping stone to achieving a larger future advance of funds, that’s right, isn’t it. A. Sorry, would you repeat that question? I’m just to see that in the email. Q. The document chain that you were forwarded was in effect communicating to you that Mr Reschke was looking for immediate refinance as a stepping stone to obtain a future advance of a greater body of funds to take control of the Reschke Pty Ltd assets. I’m asking whether you agree or you disagree. A. I don’t know what Mr Reschke was doing in respect to what he was borrowing and what he intended to do. As I said, at the time, we were approached to be appointed as receivers and from a review of this, this is information that I’ve been provided and this email, you know, it says the payout for the current receivers, who would then, from recollection, retire and we would be appointed. Q. Well, the point of it, Mr Singh, was that - wasn’t it, Hall Chadwick were contemplating appointment as a part of a bigger enterprise to help Mr Reschke retain or regain control of the Reschke Pty Ltd asset pool. 8 Exhibit A1, TB506. 9 T694-697. -- 16 of 85 -- [2026] SASC 80 Kourakis CJ 15 A. No, I don’t - I don’t know what Mr Reschke was intending or, as you’re saying, what we were part of. Our role was to be appointed as receivers and deal with the assets that we were appointed to and, you know, try to maximise any realisation of those assets as close to market value or otherwise as reasonably possible, given the circumstances, and also, in doing so, dealing with the various stakeholders that had claims to those assets. HIS HONOUR Q. Mr Singh, the purpose of you being shown the email was to show you a document - A. Yes. Q. - through which you, if you’ve read it, would have had knowledge of the broader plan, but the writing on the screen in front of you might be a bit small. So, if you’re looking at the email from Shannon Davis to you, which was flicking to you an email from Burke Reschke to Shannon, you’d see right at the bottom, it says ‘It will obviously be tight for a while, but some money in the next bigger loan to bottle, label, process, store and ship wines would be very beneficial to the final outcome for all’. Can you read that there. A. Yes, I can read that. Q. Is that news to you today, reading it. It didn’t - it’s not something you noticed before, in fact, not something you noticed when you received the email. A. Well, I guess the first point is I probably - I don’t recall receiving or I don’t have a memory of my reaction when I would have received that email is probably the first thing. What - I don’t know what that means and whether that’s in respect to ongoing trading because I do know that Reschke and I know at the time even during our appointment, we were bottling and labelling and carrying on an ordinary business, so I don’t know what is meant by that. But I think the question Mr Douglas asked was whether we were specifically part of that or we were part of some bigger scheme or some - I’m sorry, apologies, I don’t remember the exact words, but that’s definitely not my recollection. Q. No, and it might be that - A. Yeah. Q. - you’re at cross-purposes with Mr Douglas about what he meant. Mr Douglas was putting to you that you knew that the appointment of Hall Chadwick was one step which Mr Reschke had in mind towards a bigger goal, that bigger goal being that stated in the sentence that I read to you. A. I don’t know what he - yeah, no, I don’t know what he had in mind. Q. Other than what you read or even - A. Well, yeah, I mean, at the time, I don’t know what he had in mind. 57 Mr Singh’s testimony that he didn’t know what Burke had in mind is surprising. I reject the speculative reconstruction proposed by Mr Singh that he might have understood it to refer to the limited bottling Hall Chadwick undertook. -- 17 of 85 -- [2026] SASC 80 Kourakis CJ 16 Even if Mr Singh placed little importance on it at the time, it became obvious to him in the course of the receivership that Burke had in mind resurrecting the Reschke business. 58 Mr Albarran, too, denied any knowledge of Burke saying that the appointment of Hall Chadwick was the first step in obtaining finance to purchase the remaining Reschke assets for the purpose of the Reschke phoenix strategy just before, or early in, the receivership. 59 In any event, as we shall see, by July 2019 documents which explicitly described the Reschke phoenix strategy were sent to Mr Singh and Mr Albarran. At about that time, Mr Albarran also met with Mr Davis and Mr Olver, and the representatives of a financier called GrowBiz. 60 Mr Dunsford wrote to Mr Singh again on 8 April 2019 informing him that he anticipated the documentation to be finalised by Tuesday 9 April. Mr Albarran was copied into the email exchanges between Mr Singh and Mr Dunsford. On the next day, 9 April, Mr Dunsford wrote to Hall Chadwick’s solicitor Mr Agosta informing him that loan documents had been issued ‘for the matter in Adelaide’.10 He asked him to liaise with his brother, Mr Daniel Dunsford, the principal of AR Mortgages, to ‘structure the process around the appointment with Hall Chadwick’. 61 The documentation of the loans, which were conditional on the appointment of Hall Chadwick, were drafted by the solicitor for AR Mortgages, Christina Jabbour, and Hall Chadwick’s solicitor, Mr Agosta in consultation with Leigh Dunsford and his brother, Daniel Dunsford. It is apparent from their emails that significant importance was attached to the terms of that condition. 62 On 15 April 2019, Ms Jabbour emailed Mr Agosta to arrange a time when they could both meet with Leigh Dunsford. Mr Singh was copied into that email, and he communicated a time at which he and Mr Albarran would be available. Eventually, a meeting was organised at the offices of Hall Chadwick at 10:15 am on 16 April after which Mr Singh communicated to the attendees saying:11 It was great to sit down this morning and work it all out – very useful. I was emailing to touch base on how we are going with the documents? 63 Ms Jabbour replied asking Mr Singh if he had a copy of a company search identifying the current receivers and a PPS search detailing the NAB charge. 64 On 17 April, Ms Jabbour sent an email to Mr Singh, Leigh Dunsford, and Steve Agosta, copying in Daniel Dunsford and Richard Albarran, attaching a schedule of amended conditions. She also advised that she was attaching a power 10 Exhibit A1, TB501. 11 Exhibit A1, TB513. -- 18 of 85 -- [2026] SASC 80 Kourakis CJ 17 of attorney in relation to Reschke Vineyards and that an identical copy would be used for Burke. Clause 11(d) of the schedule of special conditions provided: (d) the Debtor undertakes that upon the retirement of Timothy David Mableson and John Ronald Hart of Ferrier Hodgson as receivers and managers over Reschke Pty Ltd, to the extent that it is entitled to, the Debtor will immediately appoint Brent Kijurina and Richard Albarran of Hall Chadwick as receivers and managers of Reschke Pty Ltd. Importantly, cl 11(e) provided: (e) the Debtor acknowledges and agrees that the Debtor is not otherwise entitled to appoint or remove any external administrator without the written consent of the lender to either the Borrower or Reschke Pty Ltd. Clause 11(f) provided: (f) the Debtor irrevocably assigns to the Lender all rights which the Debtor may have in relation to any right of subrogation in relation to the debt owed by Reschke Pty Ltd to National Australia Bank secured by registered mortgage numbers … 65 Within an hour of receiving that email, Mr Agosta replied to Ms Jabbour, copying in the other recipients of her email, asking her to: • confirm that the amended schedule is to form part of each of the deed of loan, deed of guarantee, and GSA; and • proposing some amendments to conditions 11(d)-(f). Mr Agosta pointed out that the assignment by Reschke Vineyards and Burke to AR Mortgages of the right of subrogation precluded them from exercising their rights and therefore discharging their obligation to appoint Hall Chadwick. For that reason, he suggested that the assignment condition be deleted. 66 Mr Agosta also indicated that he had amended the attached power of attorney so that it was irrevocable. Shortly after, Mr Agosta informed Ms Jabbour that Mr Ingram would also be appointed as a receiver. A little later again, Mr Agosta suggested that AR Mortgages should be the only grantee of the power of attorney. 67 Mr Albarran testified that generally, letters from Hall Chadwick’s solicitors were circulated to all of the co-receivers. He also agreed that it was his general practice to read any information provided to him which came from their solicitor. 68 The control over the appointment of the receivers, and the power to direct the receivers so appointed, stipulated as a condition by AR Mortgages was a risk management tool to secure repayment of the loan. Those conditions, and the involvement of Hall Chadwick in their documentation supports an inference that Hall Chadwick was aware of the expectations which Burke and AR Mortgages had, that they would conduct the receivership in a way which ensured the loan was -- 19 of 85 -- [2026] SASC 80 Kourakis CJ 18 repaid and had regard to the Reschke phoenix strategy. The success of the latter would ensure the former. 69 The loan made by AR Mortgages was for $452,000. The debtor was Reschke Vineyards, and the guarantor Burke. Very high interest rates, between 36 percent and 72 percent, were stipulated. The high interest rates serve to emphasise the importance to AR Mortgages of the appointment of a receiver in which it had confidence. The high rates add to the importance of the success of the Reschke phoenix strategy. 70 On 18 April 2019, Mr Miller from Clifton Hall wrote to Burke noting that a contract had not been presented and informing him that he would pursue other sale options. In yet another indication of the importance of retaining all the wine stock, Burke responded on 23 April 2019, informing him that documents had been executed which would see the debt to NAB repaid in full,12 and that it was a condition of the incoming financier that they appoint their own receivers and in particular Richard Albarran of Hall Chadwick. He forewarned Mr Miller that Hall Chadwick would look to take possession of all the Reschke wine stock. He concluded that in the circumstances, Clifton Hall should not sell any of the wine and invited Mr Miller to contact Ms Jabbour. Burke sent a copy of that email to Shannon Davis and Chris Olver of Faro Strategic and Leigh Dunsford at Stak Capital. Mr Chris Olver from Faro Strategic forwarded the email chain to Mr Albarran and Mr Singh on the same day.13 71 On 30 April, Mr Agosta sought a final copy of the power of attorney from Ms Jabbour so that he could finalise the instrument of appointment of Hall Chadwick. On Thursday 2 May 2019, Mr Agosta, who was in Adelaide with Mr Albarran, asked Ms Jabbour whether the financing would proceed on Monday. There is no direct evidence that Mr Agosta and Mr Albarran met with Burke in Adelaide, although that would seem likely. 72 In cross-examination, Mr Kijurina was asked about the circumstance that Burke borrowed money to pay out the former receivers so that Hall Chadwick might be appointed. Mr Kijurina testified that the appointment of receivers in those circumstances did happen occasionally. He accepted that receivers were more commonly appointed by the original creditor than by another entity which had borrowed money to procure an assignment of the security. Mr Kijurina was asked to comment on why a third person might borrow money to pay out a secured creditor in order to appoint receivers in respect of the debt paid out. Mr Kijurina answered:14 12 Settlement on the assignment of the NAB security to Reschke Vineyards took place on 8 May 2019. It is not clear on what basis Reschke Vineyards or Burke could exercise rights of subrogation before that date. 13 TB510. 14 T653. -- 20 of 85 -- [2026] SASC 80 Kourakis CJ 19 A. It could well be that the company – the company concerns in relation to obviously an appointment of a receiver wishes to negate that receivership. There might be certain circumstances where an incoming funder won’t actually see that there’s an opportunity in relation to the actual matter as well. Yeah, the circumstances are different, but on a case-by-case basis. I don’t think there’s a particular reason – you know, a blanket reason – where we can actually say that an incoming financier is always willing to take out an existing financier. Mr Kijurina was then asked:15 Q. Is the commonality between the reasons [proffered by him] that someone is seeking to take advantage of a commercial opportunity. A. Well there would be a commercial opportunity for someone and that – because they’re the lender – perhaps the incoming lender perhaps coming in. Q. I mean the only reason you’d borrow money to pay out someone else’s debt is if you see a commercial opportunity in doing so, isn’t it. A. Correct. Yes ... Correct. I agree, your Honour. 73 It is plain on the evidence summarised above, and subsequent statements made by Burke referred to below, that he procured an assignment of the NAB charge and paid out Ferrier Hodgson to pursue the Reschke phoenix strategy. It is likely that Mr Singh was aware of that by 23 April as a result of the emails forwarded to Mr Singh and the conference held in Hall Chadwick’s offices to sort out the documentation. There is an inference available that Mr Albarran was aware of the Reschke phoenix strategy before Hall Chadwick’s appointment because: • he was copied into emails; • the meeting to consider the documentation was held in Hall Chadwick’s office; • in the ordinary course Mr Singh could be expected to keep a principal of the firm, who was to be appointed one of the receivers, apprised of information of that kind. 74 An inference is also available that Mr Albarran, Mr Kijurina and Mr Singh acquainted themselves with the general circumstances of the Reschke liquidation and the previous receivership before their appointment because of both because of their professional and statutory duties to the creditors of Reschke and to their appointors. Moreover, it is improbable that AR Mortgages would have prepared loan documentation conditioned on their appointment had Hall Chadwick not given at least in principle agreement after informing themselves of the salient circumstances. Hall Chadwick are likely to have accumulated that information from the first meeting between Mr Singh and Leigh Dunsford, from the correspondence between Mr Agosta and Ms Jabbour, and the meeting in 15 T653. -- 21 of 85 -- [2026] SASC 80 Kourakis CJ 20 Hall Chadwick’s offices to discuss how the conditions should be adapted to Hall Chadwick’s appointment. 75 Those circumstances support an inference that Hall Chadwick knew that Burke hoped that by their appointment, Hall Chadwick would secure the Reschke wine stock on more favourable terms than those negotiated by Clifton Hall and Ferrier Hodgson. 76 In this context, too, Mr Albarran testified that it was either just prior to, or just after, his appointment as a receiver, he became aware that Mr DiGiorgio claimed that he was owed storage fees for the Reschke wine held at DFW, and that DFW claimed a lien over the wine stored on its premises. 77 Be that as it may, for the reasons which follow I find that Hall Chadwick were aware of those matters soon after their appointment. The conduct of the receivership 78 Hall Chadwick were appointed on 9 May 2019 by Reschke Vineyards and Burke, who were described as creditors of Reschke pursuant to rights of subrogation under the NAB charges assigned to them. The deed was executed on behalf of Reschke Vineyards by Burke, who also executed the deed in his own capacity. Messrs Albarran, Kijurina, and Ingram executed the deed as the appointed receivers. The evidence does not disclose why Burke was an appointor in his own right rather than as the principal of Reschke Vineyards. 79 In an email sent on 16 May 2019 to Mr Ingram, Mr Singh and Mr Albarran, Mr Kijurina summarised a conference which they had attended that afternoon. That email was not initially discovered. It made its appearance as an exhibit, BK10 and BK12, to Mr Kijurina’s affidavit of 30 September 2025. It was also exhibited at JS15 to the second affidavit of Mr Singh. Even though the email sets out Hall Chadwick’s initial action plan, in his affidavit of 17 May 2025, Mr Kijurina described his role as ‘initially ad hoc’ and ‘dealing with specific issues here and there’. He did not mention the email of 16 May. 80 The email recorded that Burke asserted that his agreement with Mr DiGiorgio for the storage of the wine charged three times the industry average for storage. An expert report obtained by Hall Chadwick for the purposes of these proceedings concluded that the DFW charges were reasonable. The note continued, ‘inference was that DG needed to prop up his cashflow’ for financing purposes’. No reason for Burke signing up to the overcharge is mentioned in Mr Kijurina’s email. 81 It also records information provided by Burke that Mr DiGiorgio had brought a legal proceeding claiming $1.6 million despite claiming a greater amount, but that the Court found only $1 million was owed. The note does not record that the claim to which Burke referred was a statutory demand and that the demand was confirmed for the lesser sum of $1 million only because the Court was satisfied (just) that there was a genuine dispute as to the higher charges which applied -- 22 of 85 -- [2026] SASC 80 Kourakis CJ 21 during the vintage period (the vintage charges). In short, it does not record that the proceedings were interlocutory and not a substantive resolution of the controversy. The note gives the impression that DFW had unmeritoriously claimed more than it was entitled to when it is not at all surprising that there might be a meritorious claim for more than that which, on an application to set aside a statutory demand, the Court finds is incontrovertible. It is surprising that there is no mention of the nature of proceedings challenging a statutory demand in a note of the conversation made by an experienced receiver. 82 Mr Albarran testified that Hall Chadwick did not pay charges for the storage of the wine during the period of their receivership because:16 DiGiorgio was holding the wine, then it was … a lead to and, at that time, that was subject to a dispute which were having our legal team look at that dispute and the quantum of those charges ... in our opinion, they were subject to a dispute as to quantum and how those charges were continuing to accrue. And our legal team were looking at those charges and … were accruing. 83 Hall Chadwick were also told that Clifton Hall had reached an in-principal settlement which would have allowed DFW close to $1.5 million with payment made in advance before the wine was released. The note records Burke’s explanation that he did not agree to that amount because of his concern that the wine may have spoiled. 84 On the information conveyed by Burke, and recorded in Mr Kijurina’s email, that DFW claimed more than Burke was prepared to pay for the wine, Hall Chadwick should have been alerted to the risk that the proceeds of the sale of the wine would not satisfy DFW’s storage fees which had continued to accumulate for several years after the judgment. From the commencement of their receivership, Hall Chadwick ought to have formulated a strategy for the resolution of what was, in effect, a dispute between, on the one hand, Reschke Vineyards as the assignee of the NAB charge, and DFW as lien holder on the other. That dispute may have been litigated on Hall Chadwick’s applications for advice and directions, or on an interpleader application brought by Hall Chadwick in which they were joined as respondents. It will be remembered that Clifton Hall had established a mechanism for resolving any dispute over the security account into which it had paid the proceeds of sale of wine stored by DFW and had also contemplated making an application for directions. Alternatively, the dispute might have been compromised by Burke and DFW through formal mediation or another settlement procedure. As we shall see, Hall Chadwick did not encourage any of those alternatives which would have allowed it properly to take a neutral position. Rather, it chose to contest DFW’s claims, on no basis other than Burke’s say so, and attempted to negotiate the delivery of the wine to the Reschke/AustAgri joint 16 T521-522. -- 23 of 85 -- [2026] SASC 80 Kourakis CJ 22 venture for payment of an amount which substantially discounted DFW’s claim. There is no obvious reason for Hall Chadwick choosing that course if its ultimate objective was maximising the proceeds of sale which would benefit both security holders pending the resolution of their dispute. That course is, however, explicable if Hall Chadwick were working towards a sale of the assets as a whole to Burke or the Reschke/AustAgri joint venture. 85 That proposed strategy was set out in Mr Kijurina’s email under the heading ‘Consideration of Additional Settlement Terms with DG’. It records (using the lettering of the email) that when a settlement amount is agreed upon, terms which may need to be considered were: (g) funds held in trust account; (h) wine tested before transport from DiGiorgio; (i) wine tested after delivery from DG to Burke; (j) assuming within agreed parameters, money to then be released to DiGiorgio; (k) possible wine tester is Peter Duggan winemaker – friend of Burke but also works with DiGiorgio. 86 The additional settlement terms are expressly premised on a sale to Burke or his nominee and, importantly, in accordance with condition (j), contemplates a limit (within agreed parameters) on the payment of DFW’s fees. 87 Under the heading ‘HC Action Plan’ the email outlines contact with Mr DiGiorgio and ‘ultimately settlement terms to be agreed upon (noting comments)’. I infer that the comments mentioned in parentheses are the checks and safeguards which appeared under the earlier heading. Mr Kijurna’s email sets out a strategy premised on DFW compromising its claims in settlement negotiations so that it fitted within the funding envelope of an offer from Burke which Hall Chadwick might accept. 88 The action plan assumes, without investigation, that the NAB charge would prevail over DFW liens, or at least that DFW could be persuaded that that was so without Hall Chadwick first obtaining a legal opinion or judicial determination. Mr Kijurina’s email, to which no objection was taken by Mr Albarran or Mr Ingram, shows that Hall Chadwick from the outset were inclined to act in a way which favoured the achievement of the Reschke phoenix strategy over DFW. 89 Under the heading ‘Sale’, the email records that Burke had informed the meeting, that the previous receivers, Ferrier Hodgson, had received an offer of $3 million for all wine, bulk and bottled. It then noted that ‘still put Simon Miller was $3M less sale price of wine already sold … Simon wanted $3M less wholesale value – ultimately no agreement reached’. Importantly, the next dot point under -- 24 of 85 -- [2026] SASC 80 Kourakis CJ 23 the heading ‘Sale’ noted ‘AustAgri potentially looking at doing a deal with BR to fund a purchase’. 90 Mr Kijurina testified that he had no independent recollection of that plan. He was therefore unable to give any explanation of the development and objective of the plan. 91 Mr Albarran appeared to have no recollection of any strategy to deal with the issue of priorities between DFW and Reschke Vineyards:17 Q. Mr Albarran, to try and be clear, at any time during the receivership, did you take the position that there was no lien, or that if there was a lien the quantum it supported was insignificant. Or did you take the position that there was likely to be a lien for a significant amount, or did you take a position somewhere in-between that. Did you take the position of just negotiating to see how well you could do and what the best price was that you could get DiGiorgio to release the wines for. A. They’re difficult questions to answer, your Honour. I mean, we – as receivers, our position changes from time to time. So whether we were embarking on negotiating with Reschke, and my state of mind may have changed from time to time, I can’t answer that. But the position was that there was a lien and we were negotiating with Reschke to achieve a sale of all of Reschke’s ... assets. The wine that was held by DiGiorgio, notwithstanding the lien, is still an asset of the company. Yes, you’ve got to deal with the lien, but it is an asset of the company. (Emphasis added) In the underlined sentences, Mr Albarran accepted that the negotiation with Burke was for the whole of the assets and that freeing those assets subject to DFW’s lien was an element of that strategy. It is not obvious why Mr Albarran put significance on the wine warehoused by DFW still being an asset of Reschke which was in liquidation when the proceeds of their sale would not be shared beyond DFW and Reschke Vineyards as the secured creditors. 92 Mr Albarran testified that Hall Chadwick did not have a hard and fast rule about making arrangements for the payment into court of the proceeds of disputed property. He testified that he had discussions with his staff and legal team to the effect that an option was to pay the proceeds of wine sales into court if they could not negotiate an agreement with DFW to secure release of the wine. He also explained that if an agreement could not be reached at all, Hall Chadwick would consider an application to the court to order the sale. 93 Mr Albarran and Mr Kijurina’s poor recollection of discussions so early in the receivership about the prospect that the Reschke wine assets held by DFW would be purchased by an Reschke/AustAgri joint venture is no reason not to draw the natural inference from Mr Kijurina’s email that even at that early stage, subject 17 T560.2-23. -- 25 of 85 -- [2026] SASC 80 Kourakis CJ 24 to testing the market, Hall Chadwick were working towards a sale to an entity associated with Burke. 94 It is convenient here to observe that the acceptance of a, at least, working strategy, even if not yet set in stone, to achieve a sale to the Reschke/AustAgri joint venture was fraught in the absence of a due diligence exercise to establish that the new entity was firmly committed to the purchase, and had the financial resources to settle on it. After all, Burke was the principal of the Reschke business which had been placed into liquidation and the principal proponent of the joint venture. Hall Chadwick adduced no evidence that it undertook such an exercise or of its conclusions. 95 On 27 May 2019, after hearing of the appointment of Hall Chadwick, Mr DiGiorgio wrote to David Trim saying that he would:18 … certainly like to know how you intend to deal with the issue of the debt by Reschke Pty Ltd to [DFW] and the bulk wine that we have in our possession pursuant to a PPSR and pursuant to the Common Law liens which you will be well aware of. 96 On 28 May 2019 at 11:38 am, Burke sent Mr Trim and Mr Singh a copy of the correspondence between Fisher Jeffries and Mr Rowley of 15 March 2019, to which I earlier referred, under cover of an email from him which read: This was where we were at with the liquidator. None were acceptable. That is why we took FH out and got Hall Chadwick in. Minutes later, under cover of an email reading ‘see further liquidator position’, Burke sent to Mr Trim the correspondence between Mr Rowley and Fisher Jeffries dated 28 February and 7 March to which I have also earlier referred. 97 Burke was no doubt hoping to persuade Mr Trim that the more aggressive stance, proposed by Mr Rowley, should be taken against DFW. Mr Trim and Mr Singh could not have failed to appreciate Burke’s expectation. 98 On 29 May, Mr Trim responded to those emails asking Burke to provide the DFW schedules of fees and charges referred to in Fisher Jeffries correspondence. It must have been clear to Mr Trim from Burke’s email of 28 May that he still wished to purchase the wine held by DFW on much more favourable terms than those suggested by Clifton Hall. Notably, Mr Trim did not make any comment or response to the premise of Burke’s email, that he expected Hall Chadwick to procure a sale of the wine held by DFW to him or an associated entity. 99 On 29 May 2019, Mr DiGiorgio again emailed Mr Trim informing him that ‘as soon as you arrange for the outstanding debt to be paid, we will happily release the wine to you’.19 18 Exhibit A1, TB535. 19 Exhibit A1, TB538. -- 26 of 85 -- [2026] SASC 80 Kourakis CJ 25 100 On 12 June 2019, Mr Kijurina wrote to Mr DiGiorgio after having met with him in the preceding week. A month had passed since Hall Chadwick’s appointment. He confirmed that Hall Chadwick had been appointed by Burke and Reschke Vineyards but did not disclose the security interests they held. He proposed that the payments for outstanding and future storage costs for the stock held by DFW be put on hold pending resolution of what he claimed was a ‘genuine dispute’ over the quantum of DFW’s charges. 101 Several aspects of that proposal should be noted. As I have already explained the finding of a genuine dispute over a statutory demand before Reschke went into liquidation is only the commencement of the enquiry as to the responsibility of a receiver to pay those fees, as the contrary approach of Ferrier Hodgson demonstrates. Moreover, the genuine dispute was found only as to the additional vintage charge. That portion of the claimed fees might properly have been put on hold but there was no reason to pay nothing at all. Thirdly, Mr Kijurina’s proposal ignores s 419 of the Act. Moreover, as we shall see, Hall Chadwick did little thereafter to elucidate the nature of the genuine dispute let alone negotiate a resolution. 102 Mr Kijurina asked that all relevant invoices be forwarded to Hall Chadwick by close of business the following day. His letter continued:20 … it is our intention to realise the stock and request your confirmation that you will allow access to the stock to allow for the sale to proceed. In this regard we believe it may be appropriate to have some funds paid into court pending resolution of the dispute. (Underlining added) 103 I pause here to observe that the need to realise the wine stock was obvious. The important questions were the ‘what’ and ‘when’ of the sale process. The email did not make any firm offer about DFW fees, nor did it specify a proportion of the sale proceeds, or alternatively a fixed sum, which was to be paid into court. The underlined sentence was one of the very few occasions on which Hall Chadwick put a resolution to Mr DiGiorgio. However, the phrases ‘may be appropriate’ and ‘some funds’ are radically uncertain. No firm proposal was put. In particular, Mr Kijurina did not acknowledge the risk that the proceeds would not be sufficient to meet the sale proceeds even though a cursory reading of the correspondence from Burke exposed that risk. Nor did he mention that the only sale which Hall Chadwick was actively considering at that time was a sale to Burke. 104 The objective effects of the 12 June 2019 email were, on the one hand, to keep DFW out of its monthly entitlements, and, on the other, to give a tactical negotiating advantage to Burke. These objectives were consistent with the strategy outlined in Mr Kijurina’s email of 16 May 2019. 20 Exhibit A1, TB543. -- 27 of 85 -- [2026] SASC 80 Kourakis CJ 26 105 Mr DiGiorgio replied later that same day and attached the invoices sought by Mr Kijurina. He made the point that Ferrier Hodgson, had paid DFW’s charges for the period of their receivership. He sought information as to the identity of the secured party from whom they were obtaining instructions. He continued:21 We urgently need to hear from you about when it is proposed that the amount outstanding to us will be paid and the wines removed from our winery. 106 On 13 June, Mr DiGiorgio wrote again to David Trim seeking information about the Hall Chadwick’s sale strategy that:22 … prior to us making any decision to allow access for the purpose of sale you will need to outline to us a sales strategy and a sale process as well as providing details as to how you propose to pay fees that have been outstanding since 22 December 2018 and continuing to accrue on a monthly basis in accordance with our service charges and for you to let us know how you propose to arrange for our outstanding invoice to be paid as was discussed at the meeting last week. You will also need to detail to us full particulars of the genuine dispute which you refer to with respect to the amount outstanding to us. Further, as previously mentioned we require details from you as to how you propose to pay for the outstanding service charges from 22 December to the present when continuing. (Citations omitted) 107 Three weeks later, not having received a reply, Mr DiGiorgio again emailed Mr Trim on 2 July 2019, requesting a response. Mr Trim replied on 5 July acknowledging receipt of the invoices and statements. He claimed that Hall Chadwick were reviewing the documents and were seeking further information from their appointors and legal representatives. 108 On 10 July 2019, Mr DiGiorgio again emailed Mr Trim complaining that ‘absolutely nothing had happened’ in the two months since Hall Chadwick was appointed. 109 I pause here to make four observations. First, I found in my judgment of 2 June 2025 that DFW were entitled to sell the wine in accordance with its priority interest. Hall Chadwick knew, or ought to have known, that DFW, at least arguably, held the priority interest. Secondly, the email put Hall Chadwick on notice that DFW was concerned that the sales process chosen by Hall Chadwick, and their delay, may prejudice its recovery pursuant to its lien. Thirdly, Hall Chadwick’s delay in making a substantive response to Mr DiGiorgio’s repeated requests to be informed of Hall Chadwick’s plans for dealing with the wine stored by DFW, and its intentions as to payment of the historical and ongoing storage fees, undermined DFW’s position as a secured creditor. It kept from DFW that Hall Chadwick was working towards a sale of the assets to the Reschke/AustAgri joint venture even though they had yet to make a firm decision 21 Exhibit A1, TB545. 22 Exhibit A1, TB547. -- 28 of 85 -- [2026] SASC 80 Kourakis CJ 27 to that effect and intended to test the market. If DFW had known of that prospect, it might reasonably have concluded that Hall Chadwick’s marketing campaign would not advance its interests and may have taken steps to enforce its lien sooner. 110 About four hours after receiving Mr DiGiorgio’s email, Mr Trim informed him by email that Hall Chadwick had commenced its ‘sales campaign this week’ and that further particulars would be discussed at tomorrow’s meeting. Mr Trim’s statement was more anticipatory than historical because the first advertisement seeking expressions of interest did not appear until 13 July. 111 There does not appear to be any good reason for the time it took Hall Chadwick to formulate its sales strategy. Nor is there any good reason why it had done so in the month following Mr DiGiorgio’s request for information without keeping him informed of what it had in mind. His cooperation was necessary as the lienholder over the wine, and his experience was likely to enhance the sales campaign. A possible reason for not doing so was that Mr DiGiorgio might have appreciated that at best, the campaign envisaged by Hall Chadwick was calculated to favour a single sale of all of the assets, or on the more cynical view, which Mr DiGiorgio was taking, that it was designed, as Mr Albarran testified, to determine a reasonable price for a sale to the Reschke/AustAgri joint venture by testing the market. 112 Mr Trim also informed Mr DiGiorgio that the genuine dispute on which Hall Chadwick relied was the dispute referred to in a judgment of Judge Dart delivered on 20 October 2017. It appears, therefore, that Hall Chadwick had, prudently, chosen not to rely on Burke’s allegation that DFW was dishonestly inflating its revenue. It is convenient to consider that judgment before proceeding further. 113 Judge Dart amended a statutory demand made by DFW against Reschke in which DFW had claimed an amount of $1,610,194.63 for unpaid storage and other fees from April 2016 until August 2017. Reliance on that judgment, at best, manifested a very poor understanding of the nature of genuine dispute over a statutory demand or was, at worse, disingenuous. 114 The substance of Reschke’s application disputing the DFW demand was summarised by Judge Dart as follows: [4] The current arrangement between the parties is set out in a written agreement called ‘Grape Processing Agreement’ (‘GPA’), executed by the parties on 9 September 2015. Schedule A to that agreement sets out the charges applicable for the various services provided by the defendant. The Schedule also provides for the charging of interest on overdue invoices. [5] One issue that arises on the application is an additional charge for storage that arises during the period of vintage, ie. February to June each year. Wine which is simply stored from previous vintages attracts a charge of 6 cents per litre per month during that period. The explanation is that, during vintage, the winery requires as much -- 29 of 85 -- [2026] SASC 80 Kourakis CJ 28 storage as possible, to store wine processed from the vintage being undertaken. A part of the defendant’s claim relates to this additional storage charge. … [16] The defendant’s claim is made up of three components. The first component in the amount of $1,026,541.10 is simply the running balance in respect of storage fees and interest accrued as a result of the non-payment of invoices. It also includes amounts for the crushing of the plaintiff’s grapes and the making of the wine. There is nothing particularly controversial about that amount. The GPA creates an entitlement to charge interest on unpaid amounts. [17] Separately, there are two invoices in relation to the additional storage fee for wine during vintage. One is for the 2015 vintage and the other is for the 2016 vintage. What is notable is that both of those invoices were sent in January 2017. [18] The plaintiff raises three issues which are said to justify the Court’s intervention to set aside the statutory demand. They are: 1 The fact that the balance claimed of $1,026,541.10 is not able to be verified. 2 That the invoices in respect of the additional vintage storage charges being in the amounts of $298,261.26 (invoice 2015VIN) and $285,392.27 (invoice 2016VIN) are not payable. 3 That the applicant is solvent. 115 Judge Dart rejected grounds 1 and 3. In any event, as to the latter ground, in 2019 Reschke was in liquidation and therefore insolvent. Accordingly, Judge Dart found that there was no genuine dispute as to the amount of $1,026,541.10 in outstanding fees and charges as of October 2017 nor as to the accumulation of interest on unpaid amounts. Even though Mr Trim did not specify the grounds on which he relied, it could only have been ground 2. 116 On the second ground, Judge Dart concluded: [20] The position is slightly different in respect of the two invoices for additional vintage storage. The affidavit material filed by the plaintiff asserts that, historically, the additional storage fee (incorrectly called ‘penalty charges’ in the invoices) was not charged. Mr Reschke in his second affidavit deposes to a conversation with the director of the defendant on 12 May 2017. The effect of the conversation is that the January invoices are not necessarily payable if the other debts are paid. That might ultimately be disputed, but does suggest a basis for a dispute. [21] I am satisfied, just, that in relation to the two invoices for additional vintage storage, there is a genuine dispute in the sense of a plausible contention requiring further investigation. This is reinforced by the fact that the invoices were not sent at the time the obligation was incurred, but in respect of the 2015 vintage, not for a period of almost two years. No explanation is provided for the delay. (Citations omitted) -- 30 of 85 -- [2026] SASC 80 Kourakis CJ 29 117 I emphasise that the genuine dispute on the additional vintage charges was found ‘just’ to exist on the state of the limited affidavit evidence filed on that application and was not a final adjudication of the claim. Judge Dart also properly observed that the conversation on which Burke relied might be disputed. Judge Dart therefore varied the demand so that it claimed only $1,026,541.10. In any event, even if there were a promise to waive the vintage fees on condition the basic charges were paid, that condition was not, and could no longer be, met, again because Reschke was in liquidation. 118 An appeal to a Justice of this Court was dismissed in December 2017. 119 The above analysis could not have escaped the mind of reasonably competent receivers. The reliance on Judge Dart’s judgment as a reason to withhold any payment for DFW’s fees incurred during the period of the receivership was disingenuous. 120 It is of some importance that the $1,026,541.10 which Judge Dart found could not be substantially disputed was ultimately more than would have been received for the wine stored by DFW, on the best-case scenario, following the Hall Chadwick sales campaign. Moreover, even before the commencement of the Hall Chadwick receivership and by the time of the sales campaign, the amount owing had more than doubled. Hall Chadwick, too, would undoubtedly claim fees for their work from DFW. It was plain to Mr DiGiorgio that there would be a shortfall. Hall Chadwick, too, ought to have realised that was so. Mr Albarran testified only that the question of DFW’s claim was referred to Mr Agosta. However, there is no evidence that Hall Chadwick assessed DFW’s likely entitlement for the purposes of making an informed and reasonable decision on the conduct of the receivership. Hall Chadwick certainly did not seek a judicial resolution. 121 I draw the inference that Hall Chadwick did not reach a final view of the likely question of DFW’s entitlement because they did not wish to be burdened by the knowledge of the validity and quantum of Mr DiGiorgio’s claims in case it precluded them from pursuing a strategy of negotiating DFW’s claim down in order to yield the result their appointor desired. There does not appear to be another more persuasive explanation for Hall Chadwick not addressing definitively the entitlement claimed by DFW as a secured creditor who arguably might have a higher priority than their appointor. 122 Mr DiGiorgio replied within about an hour of receiving Mr Trim’s email of 10 July. He asked who was conducting the sales campaign. Mr DiGiorgio reminded Hall Chadwick that they had not yet addressed payment of DFW’s fees from 22 December and continuing and indeed for the entirety of the debt. 123 On 11 July, Mr Trim informed Mr DiGiorgio that the campaign was being implemented by their ‘in-house team’. Mr Trim gave further particulars of the genuine dispute by referring to paragraph [21] of the judgment of Judge Dart which I have set out above. Mr Trim’s response shows a surprising ignorance of the -- 31 of 85 -- [2026] SASC 80 Kourakis CJ 30 nature of a ‘genuine dispute’ finding in respect of a statutory demand. However, Mr Trim’s reliance on it is explicable if his purpose were to use the finding of a genuine dispute as a negotiating lever against DFW’s claim in order to affect a sale to the Reschke/AustAgri joint venture. 124 As it transpires, on 8 and 9 July, just days after Mr Trim informed Mr DiGiorgio that Hall Chadwick were reviewing DFW’s invoices and statements and seeking information from their appointors and solicitor, and in the days before Mr Trim announced to Mr DiGiorgio that Hall Chadwick had commenced its sales campaign, several meetings were held in the offices of Hall Chadwick about the sale of the Reschke assets to the Reschke/AustAgri joint venture. 125 The Hall Chadwick timesheets show that from 1 July to 9 July, work was done by Hall Chadwick compiling DFW’s invoices, reviewing Mr DiGiorgio’s correspondence and meeting with its solicitor about DFW. There was also a review of correspondence with the valuer, Mr Hyman, about ‘insurable values’, and several emails about ‘sales’ were sent. Otherwise, the time sheets disclose no obvious work on a sales campaign. However, I accept that, at the very least, someone must have drafted advertisements seeking expressions of interest for the Reschke assets. 126 On 8 July, Mr Albarran met with Hall Chadwick’s solicitor about ‘Mr DiGiorgio and recovery action’. Nevertheless, as I earlier observed, there is no evidence of a definitive assessment by Hall Chadwick of the merits and quantum of DFW’s claim in order to guide their conduct of the receivership. 127 Before turning to the meeting with Burke and AustAgri representatives, it is useful first to set out Mr Albarran’s testimony about the role of Hall Chadwick in assisting Burke to obtain the larger loan for the purpose of the Reschke phoenix strategy was evasive. Early in his cross-examination, Mr Albarran was asked whether after his appointment he was involved in obtaining funds from a source other than AR Mortgages for Hall Chadwick’s appointment. He first replied that he did not understand the question and then that he did not recall. 128 Mr Albarran agreed that he was aware of the firm GrowBiz and that it was a non-bank lender. Mr Albarran also agreed that he knew Greg Woszczalski, who was an employee of GrowBiz. As we shall see GrowBiz was approached by Burke to finance the Reschke phoenix strategy by funding the purchase of all remaining wine stock and vineyards. It is to be expected that Burke would have pressed that strategy on Hall Chadwick. Mr Albarran was asked whether he communicated with GrowBiz about Burke obtaining finance and he said that he could not recall. 129 Mr Albarran was taken to his timesheet entry for 8 July which noted a discussion ‘with Burke re current facility and potential change to new financier’. The note mentions staff corresponding ‘with financier’. The note ends ‘meeting with GrowBiz re options’. It was put to Mr Albarran that the meeting note showed -- 32 of 85 -- [2026] SASC 80 Kourakis CJ 31 that he was involved in helping Burke consider alternative finance with GrowBiz. Mr Albarran answered:23 A. I – I can’t recall if that’s GrowBiz, but that - the entry does say ‘new financier’, so I accept that that’s what I would have been doing with Mr Reschke. Q. And to help you further on that, if you read along the rest of the line that you’ve written, there’s an express reference to ‘GrowBiz re new options’. Do you see that. A. Yes. Yes. Q. So, you were involved in helping Mr Reschke personally with considering alternative finance, weren’t you. A. I – I can’t recall that. I can’t – that does not say that I was involved in helping alternative finance. 130 It is true that the note does not record that Mr Albarran was ‘helping’ Burke with alternative finance. However, that is plainly an inference which arises from Mr Albarran discussing a change to a new financier, his staff corresponding with a financier, and meeting with GrowBiz. Another, but related inference, is that Hall Chadwick were assessing the Reschke/AustAgri joint venture’s capacity to finance a purchase of the Reschke assets. However, Mr Albarran gave no substantive explanation for the meeting. He offered little more than a commentary on his note. In particular, he did not claim that he was satisfied on the strength of that meeting, and or any discussions with GrowBiz, that the Reschke/AustAgri joint venture was a likely purchaser and could secure funds to purchase the assets. 131 Mr Albarran gave evidence that he knew Chris Olver, who was a principal of Faro Corporate Advisory. It was put to Mr Albarran that Mr Olver engaged in discussions with him about raising funds for Burke from GrowBiz. Mr Albarran answered that he could not recall. Mr Albarran was asked about his note which read, ‘Discussions with staff re corro to financier’.24 Mr Albarran agreed that the note referred to the staff of Hall Chadwick and that the note indicated that he was passing instructions to his staff but did not elaborate on the content of the note. He was taken to the next note which said, ‘Meeting with GrowBiz re options’. He accepted that he must have attended a meeting, whether it was with Burke or with GrowBiz. 132 Mr Albarran was then asked whether, in July 2019, he was aware of a company called AustAgri. He replied:25 A. I can’t recall if at that particular day I was aware of a company or not. I am aware of that company, that is correct. 23 T264. 24 T265. 25 T266. -- 33 of 85 -- [2026] SASC 80 Kourakis CJ 32 133 Hall Chadwick’s timesheet for 9 July 2019, has a cost entry made by a Mr Chou, which records a conference with Mr Albarran, Mr Pryor and Mr Barro, who were officers of AustAgri, Mr Olver of Faro Strategic, Burke, Mr Singh, and Mr Agosta. Mr Albarran testified that Mr Olver was involved in introducing Reschke to Hall Chadwick.26 Mr Albarran said he could not recall whether Mr Pryor and Mr Barro were officers of AustAgri. 134 There is also a time entry made by Mr Albarran on the same day which records he had a meeting with GrowBiz ‘re potential refinance’. 135 Mr Albarran did not elaborate on what that meeting was about. He did not accept that it was about financing the Reschke/AustAgri joint venture. 136 Mr Albarran did later accept that he became aware of the Reschke Phoenix Strategy and that that was one of his purposes in engaging Hall Chadwick.27 However, he denied that he worked with Faro Strategic.28 137 I find that the purpose and effect of the meetings on 8 and 9 July, on the part of Burke and AustAgri, were to persuade Hall Chadwick that a purchase by their joint venture of the whole of the assets was achievable. From the perspective of Hall Chadwick, it ought to have been to obtain a reasonable level of assurance that their interest was real and that finance for a purchase at, or at least as close to market value as possible, was available to justify proceeding with the strategy outlined in Mr Kijurina’s email. However, Mr Albarran gave no evidence to that effect. 138 The subsequent conduct and communication of Hall Chadwick show that from the time of those meetings, the marketing of the assets followed the course set out in Mr Kijurina’s email. However, Hall Chadwick adduced no evidence that they even turned their collective mind to the prospect that the Reschke/AustAgri joint venture was likely to complete on any sale. No evidence was adduced to show that its working premise was reasonably based. 139 Advertisements were placed in the AFR and the Adelaide Advertiser on 13 and 16 July respectively seeking expressions of interest. The contents of the advertisements are not in evidence. There were just 15 responses to the advertisements. 140 Arrangements for valuers to attend DFW were made in mid-July. 141 On 17 July, Mr DiGiorgio emailed Mr Trim and raised concerns about Hall Chadwick’ marketing strategy. He also sought an acknowledgement of their responsibility for charges levied in the period of their receivership and for advice 26 T264. 27 T551. 28 T545. -- 34 of 85 -- [2026] SASC 80 Kourakis CJ 33 as to the arrangements they would make to pay those charges. He asserted that he understood those arrangements would be made before auctioning any wine. 142 On the same day, Mr Agosta of Nelson McKinnon Lawyers wrote to Mr DiGiorgio on instructions from Hall Chadwick. He informed Mr DiGiorgio that Hall Chadwick were undertaking a marketing campaign with a view to reaching an agreement with DFW to facilitate the release of the wine stock it held. He wrote that Hall Chadwick proposed to engage David O’Leary to inspect and test the wine stock which would then be valued by Ian Hyman. Mr Agosta requested DFW’s permission for Mr O’Leary and Mr Hyman to attend DFW’s premises for that purpose, estimating that some three to four days would be required. The letter also informed DFW that as part of the marketing campaign Hall Chadwick would allow a day on which potential purchasers could access the stock. He invited DFW to propose dates for the access sought and to provide an estimate of DFW’s costs to facilitate it. It is to be noted here that the arrangements proposed by Mr Agosta were premised on the Reschke wine remaining on DFW’s premises. 143 Mr Albarran testified that Mr Hyman was a close friend who did most of Hall Chadwick’s work and that he would have spoken to him about his valuation, he stated:29 Yes, I would have had discussions, I mean Ian Hyman is a close personal mate of mine, he would have been at the helm of that – of the valuation. I can’t recall what valuation came in or otherwise but these type of … would have been going with Hyman. We were probably doing 90 per cent of all … work in terms of valuers and auctioneers at that point in time, so I would have had discussions with him but I can’t recall the actual figure. Mr Agosta’s letter concluded that the:30 … receivers anticipate being in a position to communicate a proposal to you within the next seven (7) days with respect to the release of the wine stock currently in your possession. He asked Mr DiGiorgio to provide a copy of any recent valuations obtained with respect to the wine stock, including any such valuation obtained by Ferrier Hodgson in order to assist with formulating that proposal. The estimate of seven days for the provision of the proposal suggests that it would be put before, or without receiving, offers for separate parcels of DFW wine in an atomised sale process. It is more suggestive of a negotiation of a price for purchase by the Reschke/AustAgri joint venture, or another ‘all assets’ purchaser. It is difficult to see why Mr Agosta requested outdated valuations to formulate a proposal for release of the Reschke wine by DFW given the proposed valuation by Mr Hyman based on Mr O’Leary’s testing of the wine. Moreover, if the wine held by DFW was sold as a separate parcel or parcels the most obvious way forward was to wait 29 T513. 30 T112. -- 35 of 85 -- [2026] SASC 80 Kourakis CJ 34 for those sales and to quarantine the proceeds pending resolution of any competing claims. 144 Mr DiGiorgio replied to Mr Agosta on 18 July. He put proposals for access by Mr O’Leary and Mr Hyman and potential purchasers. He provided information on the ongoing storage costs and reported on his attempts to obtain the valuations. He concluded that he looked forward to receiving Hall Chadwick’s proposal. 145 In an email sent to Hall Chadwick on Friday 19 July 2019, Mr DiGiorgio raised his concern about their proposal to charge prospective purchasers $5,000 to inspect the wine:31 I am informed that the information packages referred to in the advertisement in the Advertiser 16 July 2019 are only available upon payment of the sum of $5,000. I must say that I have never heard of such a large sum of money being required to be paid in order to obtain such information and unfortunately this can only serve to deter prospective purchases of the wine away which is not in the best interest of all concerns from the point of view of trying to obtain the best price at all times. 146 Mr DiGiorgio emailed Mr Agosta again on Tuesday, 23 July repeating the requests he had in his email of 19 July. Mr DiGiorgio also noted that the imposition of the $5,000 fee for information packages on the sale of the wine which had been proposed by the internal marketing team of Hall Chadwick had been dropped. There is no evidence on whether the dropping of the fee was widely communicated in order to attract back potential bidders who might not have expressed interest for separate smaller parcels because of the fee. 147 In the absence of any reasonable explanation from Hall Chadwick for the imposition, then dropping, of the $5,000 fee, I accept the force of Mr DiGiorgio’s criticism and his view that the imposition of a fee of that order would deter potential purchasers save for the likes of Burke or others who hoped to purchase all, or a large part of the wine on offer. 148 Mr Singh never gave an explanation for the imposition of the $5,000 fee or the reason for dropping it. Viewed objectively it would more greatly deter prospective purchasers who were interested in smaller lots than it would ‘all assets’ purchasers. The imposition of what DiGiorgio described as a ‘never heard of’ large fee supports an inference that Hall Chadwick were conducting a sale process to test the market price for an ‘all assets’ sale which they expected to negotiate with AustAgri, or to have an alternative ‘all assets’ purchaser in the event that AustAgri offer fell through or was significantly below market. Whether or not the sale proceeds would have been optimised by focussing on one, or other end of the market is a question on which Hall Chadwick should have sought expert advice. There is no evidence that they did. A report of Damon O’Brien, who had more than 35 years’ experience in the sale of premium wine and whose report was tendered by Hall Chadwick,32 was received into evidence. The report records his 31 Exhibit A1, TB577. 32 Exhibit R16 at 8. -- 36 of 85 -- [2026] SASC 80 Kourakis CJ 35 expert opinion that on an ongoing campaign which offered the wine warehoused by DFW, in parcels as opposed to the offers received for all of the wine from Get Wines Direct (GWD) and AustAgri, was more likely to optimise the proceeds of sale. 149 Mr DiGiorgio then noted that he had not heard back from Hall Chadwick about the proposed testing of the wine and continued:33 I note with sincere and enormous concern that despite the number of people involved in this particular matter highlighted by the number being copied into correspondence continuously. There still does not appear to be any serious action taking place to facilitate a resolution of this matter and in fact there only appears to be apparent continuing delay such as happened since 9 May 2019 when the current receivers and managers were appointed. Mr DiGiorgio emailed again on the same day and noted that:34 1. He was told that HC receivers would make a proposal for the release of the wine stock in DFW’s possession by some time tomorrow, but he had yet to be provided with the information he had earlier requested. 2. There remained uncertainty as who the valuer Mr Hyman would engage to test the wine and the time for that testing had yet to be confirmed and might even take place after Hall Chadwick put their proposal. 3. The call for expressions of interest stipulated that they would be provided by 5pm tomorrow which was at odds with the timeframe for providing the proposal. 4. The information packages which were to be provided for a fee of $5,000 would necessarily include confirmation of the wines and quantity in DFW’s possession, however DFW had not been requested to provide that information. Mr DiGiorgio’s third point shows an appreciation of the disconnect between the marketing campaign and Mr Agosta’s timeline for putting a proposal to DFW by 5:00 pm on 24 July. Mr DiGiorgio’s fourth point highlights the lack of focus in the marketing campaign on sales as separate parcels, of the DFW wine. 150 Mr DiGiorgio continued:35 With all due respect to your professional position in relation to this matter, one can only suspect that the entire conduct of this so far is a sham and accordingly one can only suspect that despite the professional people and organisations involved it would seem that the instructions to conduct the matter in such a way must be coming from Mr Burke Reschke. … 33 T114. 34 Exhibit A1, TB580. 35 Exhibit A1, TB580. -- 37 of 85 -- [2026] SASC 80 Kourakis CJ 36 Please note that if we don’t receive the full and complete details of the information that we have requested we will take it upon ourselves to arrange for the sale of the wine pursuant to the security and common law rights that we have… If I do not have this by midday tomorrow I will assume you do not have instructions. Please not that I have done everything that has been requested of me. 151 Much criticism was levelled by the respondent’s counsel at Mr DiGiorgio’s description of the Hall Chadwick sale process as a sham. In so far as that term may be understood to mean that Hall Chadwick never intended to sell the wine held by DFW to anyone other than Burke, I accept that Hall Chadwick’s marketing was not a sham. I accept, too, that Hall Chadwick hoped to achieve a result in which Mr DiGiorgio would receive a substantial payment of the debt owed to him. However, Mr DiGiorgio’s suspicion was not unreasonable. He believed, and I have found, that his liens had priority over the NAB charges, yet Hall Chadwick were purporting to control the sale. They had dragged their feet on the sales process and eschewed a public auction. 152 Moreover, Hall Chadwick’s strategy of marketing the DFW wine with wine held elsewhere was likely to suppress the return on the wine held by DFW in the hope of attracting a buyer, like Burke, for all the wine. Mr DiGiorgio was rightly frustrated and concerned that the slow progress and strategy of Hall Chadwick was not advancing his interest, and that Burke might have something to do with it. As Mr Albarran’s testimony revealed, the problem was that Hall Chadwick were hoping to somehow get the balance right between their competing duties to DFW and their appointors. The flaw in their approach was that at law one or other held the priority interest. On my earlier judgment, it was DFW. Only if DFW’s fees were substantially discounted could the Reschke phoenix strategy fly. 153 It is convenient to interpose here the contents of a letter Mr Kijurina sent to Burke on 18 July 2019.36 Mr Kijurina commenced by referring to what he understood to be ‘a time-sensitive need to extract a quantity of the bulk wine from [DFW] in order to replenish the company’s stocks of popular wines sold through Dan Murphy’s/Woolworths’. Mr Kijurina then sought information to ascertain whether it was necessary to access the DFW wine rather than wine from another source and then asked for information about the cost and processes involved in bottling the bulk wine to meet the orders to which he had referred. 154 Mr Kijurina also provided Burke with a summary table of fees claimed by Mr DiGiorgio in the sum of $1,966,558.35 from October 2015 to July 2018. A further sum of $222,728.39 was claimed for the period December 2018 to June 2019. Ferrier Hodgson had paid the fees for the intervening period. Vintage charges and interest were excluded from those figures. The total with vintage charges was $4,419,659.57. Burke was asked to indicate which charges he 36 Exhibit A19. -- 38 of 85 -- [2026] SASC 80 Kourakis CJ 37 disputed and to provide a detailed explanation of the basis on which those charges were disputed. 155 The letter then moved to a meeting with Mr DiGiorgio under the heading of ‘Offer to purchase wine’. It indicated that Hall Chadwick had met with Mr DiGiorgio to discuss a possible mechanism for the release of the wine DFW held. It informed Burke that Mr DiGiorgio’s assessment of the value of the wine held by DFW was in the order of $2.2 million. As we shall see, a valuation obtained later from the valuer, Mr Hyman, estimated the value of the wines held by DFW at a market value of about $2,468,337 and a value on a forced sale at $1,727,836. 156 Mr Kijurina then asked Burke whether he was prepared to offer $2.2 million as a one-off, upfront, all-inclusive offer to obtain release of the wine. Alternatively, he asked whether he would offer $1.5 million payable ‘up-front’, allowing the wine to be bottled so that the proceeds of sale could be used to meet the costs of bottling, Reschke’s overheads and business expenses, with the balance (up to a maximum amount of $3.8 million) being paid into court or a controlled monies account pending resolution of the dispute between DFW and Reschke. Mr Kijurina’s proposal to bottle the bulk wine warehoused at DFW’s premises to increase the proceeds of sale by ‘adding value’ through bottling implicitly recognises that selling the wine in bulk would not be sufficient to satisfy DFW’s claim or even enable a workable compromise. Finally, Mr Kijurina asked Burke to identify whether the proposed purchaser was someone independent of Reschke. 157 There was no bottling of the bulk wine held by DFW. The massive shortfall between the value of the wine and the total of claimed fees, outlined by Mr Kijurina, portends of a looming disaster, yet Hall Chadwick proceeded with its sales campaign and refused to consent to DFW exercising its power of sale. 158 Mr Albarran’s evidence about that letter reveals much about how he approached the receivership. Mr Albarran was asked whether he accepted that, by that letter, Hall Chadwick was enquiring whether Burke accepted the fees claimed by DFW. His answer was:37 I can’t say – I can’t agree. That’s an analysis, I can’t say what Brent was trying to achieve by the letter. It’s not signed by me, so it’s a question that Brent will need to answer, what he was sending with it or otherwise. 159 It is surprising that Mr Albarran did not know of the strategy Mr Kijurina was pursuing at the time and could not pick it up by reading the letter. His suggestion that only Mr Kijuruna could answer for what he was trying to achieve in a receivership in which Mr Albarran was the lead partner and Mr Kijurina was involved on an ad hoc basis is surprising. 37 T564.35-565.1. -- 39 of 85 -- [2026] SASC 80 Kourakis CJ 38 160 Mr Albarran was asked whether Burke indicated a willingness to make an offer of $2.2 million. He first answered:38 I didn’t write this statement, nor can I talk about – can I recall Mr Reschke’s state of mind at that point in time. Those answers are additional examples of Mr Albarran’s unwillingness to engage meaningfully with the topics on which he was being questioned. 161 He later confirmed that he could not recall whether or not Burke ever made an offer of $2.2 million during his conduct of the receivership. 162 He was taken to the table of DFW’s charges. He would not accept that the total claimed, other than vintage charges, was $2,187,283.74 ‘because it’s not my correspondence’.39 I asked Mr Albarran to assume that the schedule excluded the vintage charges which were the subject of a finding of a genuine dispute. Mr Albarran responded that he could not comment on the judgment. I explained that he was asked to assume those amounts. 163 Mr Albarran answered that in those circumstances he would have sought advice from his valuers and would have discussed the veracity of the quantum of the claim with his lawyers. He was then asked to assume that if the advice was that the liens were valid and the fees supported by them was in the vicinity of $2.2 million, what decisions would that call for on the part of a receiver acting reasonably. Mr Albarran answered:40 If [it] couldn’t fetch more than 2.2 million, I’m not understanding why the receiver would go to market. If it wasn’t anticipated. 164 Mr Albarran was asked for his response if the incontrovertible amount in accordance with Judge Dart’s finding was $2.6 million. Mr Albarran answered:41 … If it was the 2.6 figure then we would’ve spoken to auctioneers, Hymans, with which the value they assisted in the sale campaign. What we would be able to realise, our legal team, in relation to Woszczalski, the claim, and we would have then made a decision as to embarking on a marketing campaign if we thought we could achieve more than that figure. 165 The issue which Mr Albarran did not address, because he did not venture beyond the documents put to him, was that accepting, as he did, that the margin was slim, what informed assessment and decision did Hall Chadwick, in fact, make, why, and where is the assessment and decision recorded. 38 T566.20-22. 39 T567. 40 T570.6-8. 41 T570.23-29. -- 40 of 85 -- [2026] SASC 80 Kourakis CJ 39 166 There was no evidence that Hall Chadwick made the informed decision that Mr Albarran accepted a receiver would make where the difference between another secured creditor’s claim and the value of the assets was marginal. 167 Mr Albarran was then taken to the Hyman valuation and asked to assume that Mr DiGiorgio’s uncontested charges were $2.6 million. He was asked whether a reasonable receiver would consider whether they would continue to seek to deal with the assets. He answered:42 There’s 2.6 appears on there, again firstly I didn’t produce the valuation so Mr Hyman would have to make comment as to whether that’s all of the DiGiorgio wine or not. Simply a description doesn’t necessarily mean that’s all the bulk wine. So that’s a comment for Mr Hyman would need to make, assuming that that is the only bulk wine. The difference between that 2.4, 2.6 is slim. It may still go to market with a view to selling the business as a going concern, which includes all the wines that Reschke holds in an attempt to do a negotiated transaction with Mr DiGiorgio. 168 I discuss Mr Hyman’s report in more detail below. For now, I observe that it is surprising that Mr Albarran did not know that Mr Hyman valued all of the assets. They are listed on the first page of his report, which he received in the course of the receivership. Moreover, as we have seen he testified that he discussed the report with Mr Hyman, who was a friend. Indeed, it is not obvious to me why he thought that an incomplete valuation would have been delivered at all. Mr Albarran’s answer appeared to me to be an attempt to obfuscate and thereby avoid answering the point of the question. 169 I then asked Mr Albarran about his reference to the market value determined by Mr Hyman:43 Q. Why in that answer did you refer to that market value of 2.4 and therefore suggest the margin was slim and not the forced liquidation value. A. So it’s a marketing – because when go to market we are assuming that the market value is achievable, it is an IM, the forced liquidation value, from our perspective, is we make a decision, the wine just goes to an auctioneer, Hyman’s, or a car gets picked up, it goes to Hyman’s for an auction sale, that is a forced liquidation sale in our mind. A marketing campaign going to market, preparing an expression of interest, IM seeking expressions of interest is the sale as a going concern. We then rely on the market value as a guide for us to determine that is where we should be looking at to make a determination in terms of a value for a sale. 170 I interpolate here that Mr Albarran appears to distinguish between a receiver or liquidator undertaking an internal marketing campaign with the provision of an information memorandum and the use of a public auctioneer. I accept that a private sales process allows some greater control but the pressures to liquidate assets remain. Moreover, all those who made expressions of interest could have been in no doubt that it was a liquidation sale. Finally, the Hall Chadwick sales campaign 42 T574.31-575.3. 43 T575.4-20. -- 41 of 85 -- [2026] SASC 80 Kourakis CJ 40 was an abbreviated one. It was much shorter than the six months suggested by Mr O’Brien, in his 2024 report. 171 Mr Albarran replied to Mr DiGiorgio’s emails with a long letter dated 24 July 2019, in which Hall Chadwick’s approach for resolving the standoff with DFW can be seen. It should be kept in mind that the letter was written just 15 days after the meeting with Burke and representatives of AustAgri and Faro Strategic. Mr Albarran took issue with Mr DiGiorgio complaints about the way in which Hall Chadwick had conducted its receivership and asserted that Mr DiGiorgio had delayed the ability of Hall Chadwick to understand the position of the stock he held and the debt outstanding. He referred to correspondence sent to Mr DiGiorgio on 10 May 2019 and to Mr DiGiorgio’s reply suggesting that Hall Chadwick seek the information from the former receivers and the liquidator. Mr Albarran then asserted that the information was not received from DFW until 12 June. He did not mention that Mr Trim had asked Burke to provide the schedules of fees held by Clifton Hall and Ferrier Hodgson. Nor did Mr Albarran refer to Hall Chadwick’s request of Ferrier Hodgson that it provide a Report on Company Activities and property which it later withdrew indicating it would deal with Ferrier Hodgson informally. Indeed, on 4 June, Ferrier Hodgson had provided some information which Mr Trim had requested just the day before. 172 Mr Albarran’s assertions seem to be based on a selection of responses taken out of context from the communications, which I have set out above, in which Mr DiGiorgio provided the requested information. It is not obvious to me how Mr Albarran could reasonably have formed that view. As we have seen, Mr DiGiorgio did provide invoices on 12 June, and he did so in response to a request received by way of letter from Mr Kijurina on the same day. Indeed, in his letter of 12 June 2019, Mr Kijurina had asserted that there was a genuine dispute about the amount outstanding to DFW. It is difficult to see how he could genuinely do so unless Hall Chadwick already had information about the amount charged and the amount of stock on hand. Moreover, on 29 May 2019 without requesting any invoices, Mr Trim had offered to pay $1,550,290 of DFW’s claimed $3,624,972 as set out in a schedule with correspondence. Finally, Mr Albarran’s allegation that Mr DiGiorgio had delayed the sale appears, at the least, exaggerated when it was not until 11 July that Mr DiGiorgio was told that Hall Chadwick’s inhouse team would conduct the sale and on 17 July that he was asked to nominate days for the inspection of the wine. Mr DiGiorgio responded to that request the very next day. 173 In any event, it is not at all obvious why Mr Albarran thought it necessary to know precisely how much was claimed by DFW before proceeding to market the wine other than for the purpose of assessing the prospects for a sale of the wine assets the Reschke/AustAgri joint venture at a price which would leave sufficient funds for Hall Chadwick’s fees and potential liabilities. Enough was known to appreciate that DFW’s claim was likely to exceed any sale proceeds and that the likelihood increased with every week the sale was delayed. The prudent and obvious course was to proceed with marketing the wine in a way which would -- 42 of 85 -- [2026] SASC 80 Kourakis CJ 41 optimise returns whilst minimising ongoing fees, and to hold the proceeds until the competing claims were resolved. That course would require Burke to trump the highest market bid and to take or defend proceedings over the shortfall in DFW’s fee before he could take possession of the wine. 174 As for Mr Albarran’s complaint that information had not been provided about the condition of the wine, Hall Chadwick had notified Mr DiGiorgio a week earlier of their intention to obtain an up-to-date report on the wine and a current valuation from Mr O’Leary and Mr Hyman respectively. That was a more prudent approach than relying on historical assessments and valuations. 175 Mr Albarran also responded to the opinion expressed by Mr DiGiorgio in his email to Mr Trim on 17 July 2019 that there was little for Hall Chadwick to gain from the judgment of Doyle J who had heard, but dismissed, an appeal from Judge Dart. Mr DiGiorgio’s opinion was plainly correct given the very limited dispute found by Judge Dart in the context of a summary ‘on the papers’ hearing. Nonetheless, Mr Albarran took issue with that view and went on to say that Hall Chadwick were ‘attempting to come to a commercial resolution without the need to have every avenue explored, which you are and have been aggravating since we have been in discussions’. He wrote that Hall Chadwick ‘would like to progress to a resolution in the matter, not continue to debate the legal merits or otherwise of each other’s position’. 176 Mr Albarran’s statement as to his, and Hall Chadwick’s, intention to pursue a commercial resolution reveals a conscious decision, which I find was reached on, or soon after 8 July, when he met with Burke, AustAgri and their advisors and financiers, to work towards a sale of the whole of the assets as a single lot to the Reschke/AustAgri joint venture. 177 That plan was inconsistent with the responsibility of Hall Chadwick as receivers for the following reasons. First, the resolution, even of a commercial dispute over legal and equitable interests in goods must necessarily be informed by the legal merits of the competing interests. Secondly, receivers are officers of the Court and not commercial players. That is not to deny the importance of acting expediently and practically. However, it is not the proper role of receivers to use their special position and powers to dissuade a secured creditor from standing on its rights or seeking an adjudication of its priority according to law. Mr DiGiorgio had repeatedly emphasised that that was his position. Hall Chadwick’s strategy was to corral DFW towards a commercial bargain which would enable the sale of the wine assets to Burke, notwithstanding the risk that that course might compromise DFW’s secured interest. Hall Chadwick ought to have taken steps to allow the root cause of the problem, the priority of competing securities, to either be compromised in direct negotiations, or in legal proceedings, between Burke and DFW. At the very least Hall Chadwick ought at all times to have fully disclosed the course of action it had in mind and its discussions with Burke. -- 43 of 85 -- [2026] SASC 80 Kourakis CJ 42 178 In the event of a dispute like that raised by DFW, the more prudent, and more expeditious, course would have been either to seek advice from the court and/or orders for a public auction and the payment of the proceeds into court or a holding account. Alternatively, Hall Chadwick might have sought advice and directions on whether to pursue a private sale to AustAgri, in which case material on the creditworthiness of AustAgri and supporting valuations would have been required. 179 Mr Albarran also disagreed with Mr DiGiorgio’s position that issues as between DFW and Hall Chadwick should be resolved before the sales campaign proceeded. 180 On 25 July 2019, Mr DiGiorgio emailed Mr Singh, copying in Mr Albarran, advising him that he took issue with many of the points raised by Mr Albarran and would provide a detailed response on his return from an overseas business trip. 181 Before proceeding further to consider the exchanges between Mr DiGiorgio and Hall Chadwick, it is necessary to return the latter’s engagement with Burke in late July 2019. That engagement provides insight into the ‘commercial resolution’ which Mr Albarran is likely to have had in mind from the time of the meetings in his office on 8 and 9 July 2019. 182 On 22 July 2019, two days before Mr Albarran’s contentious letter to DFW, Mr Olver of Faro Strategic, who were advising Burke and AustAgri, contacted Mr Woszczalski of GrowBiz asking him if he could have a meeting with Burke. A meeting was arranged for 9:30 am on Wednesday 24 July. 183 On 22 July 2019, Mr Olver wrote to Mr Woszczalski attaching the loan requirements for Reschke Vineyards. Attached to that was a document bearing, on its cover page, the Reschke label and the title ‘Executive Summary – Debt Funding’. 184 I will refer to it as the Reschke/AustAgri loan application. It stated that Reschke group was looking to refinance its rural operation and that it required funding of $1 million to $2.2 million to recover the wine stock subject to the Hall Chadwick receivership. It claimed that the value of that wine stock was, in fact, $28 million as bottle sales under the Reschke label. That claim seems exorbitant having regard to the failure of the Reschke business and the ensuing years in which Reschke was in liquidation. It estimated the value of the bottled wine at $3.8 million, when it attracted an offer in Hall Chadwick’s sale campaign of only $300,000 as a separate parcel. The application is manifestly a puff piece, and Hall Chadwick ought to have suspected it was. It ought to have been a red flag to Hall Chadwick, signalling the risk that the new entity would not attract finance. 185 It sought an additional $1 million to accommodate the cash requirements of the business, including further bottling and overheads. An additional $6 million -- 44 of 85 -- [2026] SASC 80 Kourakis CJ 43 was sought to purchase back the original vineyards which were sold at an undervalue. 186 The Reschke/AustAgri loan application informed potential lenders that the Reschke group had agreed a sale of 51 percent of the shares in the new Reschke entity to a private company, AustAgri, with assets of over $250 million. That information both explained the capacity in which Burke was advocating for a sale to the Reschke/AustAgri joint venture and incontrovertibly shows that any offer for the wine by AustAgri could not reasonably be considered to be independent of Burke. It did not specify the sale price but said that AustAgri was a private company with assets of over $250 million, which was in the process of listing on the stock exchange to raise further funds to take advantage of opportunities such as buying into Reschke. 187 The proposal raises several questions. The relationship between the equity funding from AustAgri and the loan is not clear. Accepting that AustAgri had the assets represented in the application, it is not at all obvious why up to $2.2 million was required to buy the wine stock. Nor is it clear what Burke’s equity contribution would be. It may be that the loan was sought to establish the new entity before equity was sold to AustAgri. These are investigations which Hall Chadwick ought reasonably have undertaken in order to satisfy itself that any contract with AustAgri and/or the new entity would be completed. 188 On 29 July 2019, Mr Olver wrote to Mr Woszczalski enquiring about the potential for funding to be provided by GrowBiz. Mr Albarran and Mr Singh were copied into that email. The Reschke/AustAgri loan application was attached. On the same day, Burke emailed Mr Singh saying, ‘Can we move on getting him a final contract written up from Hall Chadwick to the new entity?’. 189 Mr Albarran accepted that he received a copy of Mr Olver’s email. He testified that his usual practice was to read the email but that he might not read an attachment. Mr Albarran was then stepped through the document. Mr Albarran gave evidence that he could not recall why Hall Chadwick was copied into the email. He confirmed that Hall Chadwick had nothing to do with the vineyards. 190 When asked why the email might have been sent to him, Mr Albarran said:44 I can only assume that the assets in our possessions would be part of that funding that they were seeking. So that was probably the purpose of including us in the correspondence. 191 Mr Albarran did recall that Reschke wanted to buy the wine stock and did not want it sold independently by Hall Chadwick. I understand that answer to mean that Mr Albarran recalled that he knew at that time that Burke did not want the wine sold to independent or unrelated third parties. Mr Albarran testified that 44 T273.6-9. -- 45 of 85 -- [2026] SASC 80 Kourakis CJ 44 he knew that Burke wanted to buy the wine back, whether it was through AustAgri or another entity. 192 When asked whether he knew that Burke was planning a joint venture with AustAgri, Mr Albarran answered:45 A. I can’t talk about – I can’t make comment about Mr Reschke’s arrangements with AustAgri or otherwise. … A. I just answered the question because it’s saying that – my understanding isn’t that anything in there because I don’t have any context about any discussions that Reschke was having with AustAgri about a joint venture or otherwise. 193 Mr Albarran claimed that he did not recall the meetings on this topic. He accepted that subsequent emails following up on the proposal were sent to Jovan Singh. He could not recall speaking to Mr Singh about those emails. 194 Mr Albarran’s testimony on this subject was evasive in content, and most unimpressive in the demeanour with which it was given. It was apparent that Mr Albarran made no attempt to search his memory or to address the picture which emerged from the line joining the dots of circumstantial evidence that he and his colleagues in Hall Chadwick knew of the Reschke phoenix strategy and were working to give it every opportunity to succeed. 195 It is convenient to summarise the evidence from which I infer and conclude that by the time Hall Chadwick commenced marketing the wine they expected and were working towards a sale of the whole of the assets the Reschke/AustAgri joint venture entity: • the emails from Burke explaining why he sought alternative receivers; • the plan set out in Mr Kijurina’s email of 16 May; • the not-so ‘genuine dispute’ communicated to Mr DiGiorgio; • the meetings in July with Reschke, AustAgri, GrowBiz, and Faro; • the underwhelming internal marketing campaign to which I refer below; • the letter to Mr DiGiorgio urging him to be ‘commercial’ on 24 July; • the receipt of the Reschke/AustAgri loan application. 196 On that circumstantial evidence, I find that Mr Albarran, Mr Trim and Mr Singh had the Reschke phoenix strategy front of mind by no later than 9 July. I find it difficult to accept that Mr Albarran had such a poor recollection of it when 45 T274.23-24, 28-31. -- 46 of 85 -- [2026] SASC 80 Kourakis CJ 45 he testified. However, it is unnecessary for me to determine whether that is a product of wilful blindness or the pressure of his work. 197 Indeed, on the second occasion he testified Mr Albarran expressly acknowledged that Burke had communicated to him that one of his purposes in appointing Hall Chadwick was to regain control of Reschke assets including the wine held by DFW. His testimony continued:46 HIS HONOUR Q Well, what were the others. A The other purpose was to pay the secure creditors, so he obviously had obligations to pay the secure creditor, of which we were put – that’s how the referral came to us, through the AR Cash Flow, and Leigh Dunsford and Daniel Dunsford, so we still had to discharge the secure creditor. Q Yes, well, that sounds like you telling me what the legal obligations were on him. Is that something Mr Reschke said to you or are you just telling me what you as a receiver liquidator understand the legal obligation to be. A No, my discussions with Mr Reschke was that we needed to get a market … the wine and pay out the secure creditor. They were our discussions. I mean, it was – the secure creditor had put to me – had recommended Hall Chadwick to be appointed, had recommended Hall Chadwick to be appointed and discharge the receivership and appoint us as receiver. Q Who was the secured creditor who appointed you. A The secure creditor was Reschke-appointed, but he had obligations to AR Cash Flow – Q Right, and who – A – to be discharged. 198 Mr Albarran went on to testify how those two purposes might be reconciled:47 Q. What was the discussion about those two things might be reconciled, that is, what did you and Burke Reschke discuss about how he might be able to achieve his purpose consistently with the legal context in which this was operating. A. My recollection was that - so we had obligations to go to market, we would go to market, we had obligations to maximise the value for all stakeholders, not just our appointor, that he was probably in a position because he knew the product, he obviously had worked the product, was probably in a better position and moved relatively quickly and put forward an offer, that, you know, he was in that better position compared to any other alternative purchasers, but then we had ... to maximise the value and we would embark on that journey. 46 T552.8-32. 47 T553.15-36. -- 47 of 85 -- [2026] SASC 80 Kourakis CJ 46 Q. Right, and did the discussion then go to its logical conclusion, which was that, as long as his offer at least matched the best offer you obtained the market, both purposes might be satisfied, that is, his purpose to regain control might be satisfied as well as the legal obligations are satisfied. A. Correct. Mr Albarran was correct to acknowledge that Hall Chadwick’s duty, in accordance with s 420 of the Act, was to take all reasonable care to sell the property of Reschke at market value. It is a breach of that duty to pursue a sale to an appointor in a way which carries a real risk of realising less than the market value. 199 Mr Albarran agreed that that was discussed earlier on in the receivership. However, Mr Albarran’s expectation that Burke would make an offer relatively quickly because he was better placed was misplaced. The offers from the Reschke/AustAgri joint venture were slow to come and never progressed to completion. 200 In late July 2019, an information memorandum was prepared for the purpose of sending it to persons who had expressed interest in the Reschke assets. A draft of the information memorandum was sent to Burke on 26 July. 201 On 29 July, Hall Chadwick sent the information memorandum to persons who had expressed interest, including Mr John Harris, the director of Get Wines Direct (GWD). The information memorandum advised that those persons seeking to taste the wine should inform Hall Chadwick by 1 August 2019 and that a closing date for making offers would be communicated later. It appears from the inventory that the bulk wine included vintage from 2010 to 2017. The information memorandum discussed that Reschke was in liquidation, and the consent of the secured creditors may be required to affect a sale. The assets listed included trademarks and contact details. Even though there is a one-line reference to the ‘business’ being offered for sale, no information about the current level of trading was provided. Some 15 persons who had responded to the advertisements executed confidentiality agreements and were sent the information memorandum. Persons who had expressed interest were informed that final offers should be submitted by close of business on 23 August 2019. 202 On 30 July a telemarketing campaign was considered but not undertaken. On 31 July 2019, Hall Chadwick employees liaised with interested parties by telephone and email. 203 Mr DiGiorgio wrote to Mr Agosta on 2 August sending information about arrangements for a tasting of the wine at DFW’s premises. He was advised tastings were planned for between 6-8 August. Mr DiGiorgio gave his substantive reply to Mr Albarran on Monday, 12 August 2019. 204 First, he informed him that David O’Leary and Ian Hyman had attended at the winery on 7 August for a tasting and evaluation of the wine in accordance with -- 48 of 85 -- [2026] SASC 80 Kourakis CJ 47 arrangements made by Mr DiGiorgio and Mr O’Leary. He explained that Mr Hyman had been provided with an EZY systems report for the wines held by them and that that document should be treated as confirmation of the wines in the possession of DFW. 205 Mr DiGiorgio then responded to Mr Albarran’s claim that DFW had delayed the sale of the wines. He explained that Hall Chadwick’s letter of 10 May was sent to his solicitors who quite properly referred Hall Chadwick to the former receivers and managers. Mr DiGiorgio referred to his email of 27 May 2019 in which he asked Hall Chadwick to ensure that they had obtained the information from the earlier receivers or the liquidator prior to the planned meeting with him. He explained that he had not engaged solicitors in an effort to keep costs down. I mention again that Mr Trim had asked for that information from Burke. 206 Mr DiGiorgio continued:48 We provided a complete set of invoices together with a summary setting out the total indebtedness to us on the 12th June 2019 as indicated following a meeting at your Adelaide office on 5th June 2019 and after then told at that meeting that you had been unable to obtained all of the invoices referred to from the former receivers and managers and the liquidator. 207 Mr DiGiorgio maintained DFW’s position that the wine would not be finally released until the DFW debt was discharged. He queried how his failure to provide that information could have delayed the sale when they had prepared an information memorandum on information supplied by Burke. 208 Mr DiGiorgio noted that despite Mr Albarran’s claims that Hall Chadwick were attempting to come to a commercial resolution as no proposal had so far been put. He denied that there was any aggravating behaviour on his part. Mr DiGiorgio took issue with Mr Albarran’s claim that Hall Chadwick did not have an obligation to address the issues he had raised about the sales campaign. Mr DiGiorgio wrote: With respect we believe that you need to have us in serious contemplation at all times given our security position in relation to this matter and our position outlined in our email to David Trim of the 13th June 2019. Mr DiGiorgio concluded: Further I am concerned that the total amount of the debt outstanding to us is now well in excess of a potential sale value of the wine. Accordingly in order to advance the matter, my proposal is that you consent to us arranging for the sale of the wines utilising a professional sales agent with a specialised online platform to accommodate domestic and international enquiries following a well-advertised tasting event at a central location in Adelaide followed by an online auction as I have previously referred to. 48 Exhibit A1, TB601. -- 49 of 85 -- [2026] SASC 80 Kourakis CJ 48 If there is a shortfall of funds to satisfy the debt then we would write the balance of the debt off save for obtaining advice in relation to claim against Burke Reschke for trading whilst insolvent. In the event that we achieve greater than the amount of debt then we would undertake to provide you with the surplus funds together with a full and complete accounting of the sale proceeds. That offer, put by Mr DiGiorgio, was the first offer capable of acceptance put by either party. Importantly, it put in stark relief for Mr Albarran the critical importance of resolving the competing claims to priority if the wine held by DFW were to be released to a purchaser whether that purchaser was connected to Burke or independent of him. 209 Mr Hyman’s report was dated 9 August 2019. Mr Hyman valued the wines held by DFW at a market value of $2,468,337 and at $1,727,836 on a forced sale. Mr Hyman’s report valued the total assets, which included other bulk wine held elsewhere, and bottled wine, a market value of $5,195,396 and a forced liquidation value of $3,339,777. 210 Mr Hyman defined forced liquidation value as the estimated gross amount of money that could typically be realised from a properly advertised and conducted public auction, where all of the assets noted herein are sold together, with a seller who is compelled to sell with a sense of immediacy on an as-is where-is basis as of a specific date (italics added). Market value was defined as the estimated amount for which the assets might exchange between a willing buyer and a willing seller in an arm’s length transaction, after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion. 211 The sale by Hall Chadwick fell somewhere between those two definitions but more closely approximated the definition of a forced liquidation sale. First the ‘vendor’ was in liquidation and had not engaged in the ordinary course of trading as a vigneron, winemaker and wine merchant for many years. It could therefore not meet the definition of the willing seller on a ‘fair market value’ transaction. Secondly, a forced liquidation sale is one where the assets are being sold as a whole, on an as-is where-is basis. Thirdly, the assets were to be sold, or at least offers had to be made, within a short time frame. Moreover, if the wine was not sold, charges would continue to accrue because Hall Chadwick had no alternative premises readily at hand in which to store the wine. Fourthly, Burke was anxious that a contract of sale be executed reasonably quickly, so that he could obtain finance to resurrect his wine business. That, in itself, put pressure on Hall Chadwick as the effective vendor to finalise the sale of all assets quickly. Finally, there was a real risk that the wines may deteriorate and lose value over time. For that reason, and not surprisingly Mr Hyman’s valuation was the subject of a disclaimer which read:49 This valuation is current at the date of valuation only. The value assessed herein may change significantly and unexpectedly over a relatively short period of time (including as 49 Exhibit A1, TB604. -- 50 of 85 -- [2026] SASC 80 Kourakis CJ 49 a result of general market movements of factors specific to particular property). Liability for losses arising from such subsequent changes in values excluded as is liability where the valuation is relied upon after the date of the valuation. Without limiting the generality of the above, we do not assume any responsibility or accept any liability in circumstances where this assessment is relied upon after the expiration of (1) months from the date of valuation. 212 Had there had been a drop in value in the short-term Hall Chadwick were simply not in a position to hold the wine hoping for an increase in price or a return to the valuation price if the costs of maintaining the wine were likely to counterbalance that increase. Indeed, it was their duty to avoid that risk by selling expeditiously. 213 Mr Albarran gave the following evidence about the definitions in Mr Hyman’s report:50 Q. Mr Albarran, do you accept that the definition of market value for the purposes of the Hyman’s report is the amount for which the wine might exchange on the day of valuation between a willing buyer and a willing seller in an arms’ length transaction after proper marketing and with the seller - A. Correct. Q. - acting prudently and without compulsion. A. I mean they are lots of statements. I mean, the marketing campaign was run, we received expressions of interest and that was the interest that’s all I can comment. Q. No Mr Albarran, can you comment on the last part of the definition of market value which is with the seller acting prudently and without compulsion, do you accept that that’s an element of the market valuation. A. I don’t know what definition Mr Hyman put on the market valuation your Honour, you are asking me something that I can’t make an assumption about him. Q. Can I ask you to assume this. In the report in which those valuations were given, Mr Hyman’s defined market value, and you can bring up p.3 of the report. A. Yep, your Honour. Q. You can see it there, p.3 of the report, go to the definition of market value, assume that that was in Mr Hyman’s report to Hall Chadwick. A. Yes, your Honour. Q. Now read his definition of forced liquidation value and, in particular, read to yourself the last part with a seller who is compelled etcetera. A. Yes, your Honour. Q. Of those two definitions, which best fits the sale by Hall Chadwick. 50 T577.14-578.31. -- 51 of 85 -- [2026] SASC 80 Kourakis CJ 50 A. I would say No.2 your Honour, market. Q. The market value. Thank you. A. Yes, your Honour. A. If I can add your Honour, that in terms of marketing campaign Hyman’s assisted in relation to the campaign. HIS HONOUR Q. Mr Albarran, like my questions were pointed towards the last clauses of both those definitions, if you wish to reconsider your answer please do. My question was which best fitted the sale by Hall Chadwick. A. I mean, it’s difficult if I’m reading it right this second and making a decision, I mean as is - where is, certainly we didn’t have access to the bulk wine, I understand there could be, if you are reading now with the benefit of hindsight, we didn’t have the stock. Yet we had other stock and we went to market and the bulk wine would be released to us upon an achievable sale and negotiation with DiGiorgio but, in my opinion, we still went to market to achieve a market value. So the market value definition of Hyman’s is the one that we would be most attributable to. 214 Mr Albarran’s confidence that Hall Chadwick would obtain the market value despite Mr Hyman’s definitions can only be described as hope against hope. 215 Mr Albarran was then questioned about the discrepancy between Mr Hyman’s valuation and the offers which were eventually received:51 Q. Drawing your attention, we will just get the document back up to the totals including GST provided, you will see that all of the wine that you asked this report to value is given a total forced liquidation value of 3.397 million, do you accept that. A. I accept that. Q. And you know, don’t you, that the highest offer that you received from market through the Hall Chadwick campaign was ultimately 1.76 million, don’t you. A. I can’t recall. HIS HONOUR Q. Mr Albarran, assume that’s the case. A. I assume - Q. Just a minute I haven’t asked the question yet. Just assume that’s the case, just assume that Burke Reschke was only willing to pay about 1.8 million, why is that figure so much closer to the forced liquidation value than the market value? Why did that turn out like that having regard to your last answer when I asked you why you picked the market value rather than the forced liquidation value. 51 T575.23-576.34, 577.1-13. -- 52 of 85 -- [2026] SASC 80 Kourakis CJ 51 A. I can’t make comment about Burke Reschke’s offer or any other offer. I mean in any campaign, we would pick the market value as a guide as to what we believe is achievable for a sale. The market value and a going concern sale would not generally have GST associated with it compared to a forced liquidation just goes to auction, there would be a GST it is no longer a going concern sale of it, of an asset or a business. Q. Did you ever market [it] this as a going concern sale. A. Yeah, I am, it means marketing the whole business as a going concern, that’s correct. Q. But what was sold ultimately was just the wines. A. That’s correct. Q. Was there any interest in buying it as a going concern other than what Burke Reschke had in mind. A. I can’t recall. Q. What happened here, Mr Albarran, why was the amount received not near the market value which you say you use as a guide when you are marketing these things, you are marketing it as a receiver. A. You’d have to go to the 30 people that expressed interest and ask them as to why they indicated they didn’t, weren’t prepared to pay more. Q. Are you surprised by the result; accepting the assumptions I’ve asked you to assume, are you surprised by this result. A. Of course I am, I mean we rely on Hyman’s, we’ve used them for a very long time. You know, they are very experienced and – … A. So the question was whether I was surprised and of course we were, we rely on Hyman’s who is a reputable organisation, we have dealt with them for such a long time. We rely in relation to going to market and our expectations, a result that would be achieved by going to market. We can’t force any potential purchasers to put a value so we go to market, that was the value that was attributed to it. It is not akin to going with a home that you think it’s 5 million, you go to market you only achieve 3 million for the house. It is those people who have inspected, have reviewed it and that’s the value they put, but I rely on the valuation put to me by Hyman’s who are very reputable. 216 Mr Albarran, by his answers, eschewed any responsibility for the poor response to Hall Chadwick’s marketing of the wine. I find that it was unreasonable of Hall Chadwick to rely on the market value identified in Mr Hyman’s report. 217 On 12 August, Burke emailed Mr Singh again: I was just following this up. I will need a contract if we are going to fund this. I am after a purchase contract for the wines. We can leave the price blank for now, until we find out -- 53 of 85 -- [2026] SASC 80 Kourakis CJ 52 from DiGiorgio what he will accept, however we need it ready to go so there isn’t a delay getting the wording correct. 218 On 16 August 2019, Burke emailed Mr Singh,52 Mr Albarran and Mr Agosta, urging them to provide him with a contract for the sale of the assets subject to the receivership: Could we move this in the priority list. If we are still working to save this business, then I will need a purchase contract for the wine … signed as soon as we can get a price from DiGiorgio. We will need it ready well before that point in time. I need a purchase contract for the lending and I will need a contract for AustAgri. It is the most important contract to work on if we are going to save this business. The expression ‘save the business’ is an unmistakable reference to the Reschke phoenix strategy which must have been discussed in the meeting of 8 and 9 July and was explicitly described as such in the Reschke/AustAgri loan application. 219 I reject Mr Singh’s evidence about that email in his affidavit of 30 September 2025 at [103] to [104]. The business was not the corporation, Reschke, which was in liquidation. It could only mean the business which Reschke had operated until its liquidation. Burke was asking Hall Chadwick to provide a contract for the sale of all of the assets, including trademarks and contact numbers, so that it could support its loan application. I acknowledge that it is not clear whether he also needed the contract to keep AustAgri on board or whether he as seeking another contract for AustAgri. There was nothing nonsensical about seeking that contract during the sale campaign. As subsequent events showed, Burke intended to trump the highest bid from that campaign and that was the course set out in Mr Kirjurina’s email of 16 May 2019. Burke’s reference to ‘we’ is founded on his previous meeting and communications with Hall Chadwick and Mr Singh, in particular. 220 Mr Singh was asked about Burke’s email of 16 August. He was asked whether at the time that he received the email he believed that Hall Chadwick were working with Burke to save the business. He answered:53 A. Yeah, I think our sale campaign was for the business and I think AustAgri and/or Mr Reschke wanted to acquire the business. So I think that was the goal there, that’s what they were interested in. Q. Were you selling a business or were you selling stock, namely wine and maybe some other plant. A. Well, I think from memory it was the entirety of the wine and stock which would then - 52 Exhibit A1, Applicant’s supplementary book, TB1. 53 T246-247. -- 54 of 85 -- [2026] SASC 80 Kourakis CJ 53 Q. Yes, was there a going concern though. A. Well, yes, yeah. We were trading so there was other wine in other locations that we would have been trading and selling. So that would have been the business and that perhaps would have been - again, I would have to check the details of the offer, but that would have been included as part of that sale of the business. … Q. What was the business then. A. Well, there is wine stock and there is the customers and I guess contracts and IP and the general business that was being operated. 221 Mr Singh’s evidence, as the most senior Hall Chadwick officer overseeing the sale of the assets, is an admission that Hall Chadwick were working on a plan to sell the assets to the Reschke/AustAgri joint venture at that time, even before offers were closed. 222 Mr Albarran denied that the email of 16 August evidenced that Hall Chadwick were working to resurrect the Reschke wine business.54 He responded that the cross-examiner was ‘making assumptions’. He said that his responsibility was ‘to go to market and maximise value’. He contended that he had an obligation to deal with all prospective purchasers. That begs the question of how purchasers should be dealt with, whether one should be favoured over another, and the extent to which they should be subject to due diligence examination to establish their capacity to settle. 223 I accept that Hall Chadwick had decided that the Reschke assets should not be sold to the Reschke/AustAgri joint venture without first testing the market. However, it is one thing to appreciate the importance of testing the market before a receiver sells assets, it is quite another to exercise the powers of their office to sell assets in a way which treats competing security interests over different asset portfolios impartially. 224 On 19 August 2019, Mr DiGiorgio emailed Mr Agosta. He wrote:55 A request for fees and charges for wine work and storage to be paid has been ignored. We have not been paid in relation to this since 22nd December 2018. Your client has all the invoices up to 31st July 2019. There has not been any acknowledgement that the proceeds of any proposed sale of wine in our possession be utilised solely for the payment of the debt outstanding to us prior to the appointment of your client including the funds currently held by the liquidator in security accounts. He continued: 54 T282. 55 Exhibit A1, TB606. -- 55 of 85 -- [2026] SASC 80 Kourakis CJ 54 It is my understanding the receivers and managers have an obligation to pay the fees and charges referred to in the circumstances and unless we receive an assurance that this will be attended to immediately then we will have no alternative to make a demand on the receivers and managers for payment. 225 He sought an assurance that Hall Chadwick’ sales strategy would expose the assets of the company to as broad a base as possible in order to maximise the sale proceeds for the different assets. Plainly, with his experience in the wine market, Mr DiGiorgio was alive to the tension between a marketing strategy narrowly focussed on an ‘all assets’ sale to use the concept emphasised by Mr Albarran and Mr Singh, as a going concern, and maximising offers for the wine over which DFW claimed a lien. The provision of the information memorandum to 15 prospective purchasers is a much narrower base from the public auctions preferred by Mr DiGiorgio. Mr DiGiorgio expressed the expectation that those details would be provided as part of the commercial proposal that DFW was expecting to receive on Wednesday. 226 There is a paucity of evidence on the development and content of Hall Chadwick’s internal marketing strategy. Mr Albarran described it in this way:56 We gathered the information, prepared an information memorandum. Advertised the assets, business/assets of the company … fresh interest. Receiving expressions of interest from 20, 30, 40 parties. Requested an NDA be executed. Subsequently to those being executed provided further information and negotiations with those parties for a period of time dealt with those parties until there was only a few left to see the maximum off as possible which was then reduced. 227 Mr Albarran testified that the information memorandum was sent to everyone who had expressed interest in purchasing any of the wine. 228 The outcomes of the internal marketing of the wine by Hall Chadwick can be seen in a collection of emails which were received as exhibit A7. 229 On Monday 19 August, Mr Trim sent an email to Mr Albarran, Mr Kijurina, and Mr Singh which attached the valuation report of Mr Hyman. Under a heading ‘Sale of Business’, Mr Trim wrote: We are still waiting on a response from Burke for his consent to release the David O’Leary report to the interested parties in the sales process. It is unclear and not obvious to me why Burke’s consent was sought unless it was related to leaving open the potential for the sale of all of the assets, as a business, to him. In any event the email records that Mr Kijurina had advised that he was happy for the report to be released ‘in the absence of a response from Burke’ to drive the sale process along. 56 T510. -- 56 of 85 -- [2026] SASC 80 Kourakis CJ 55 230 On the next day at 2:25 pm, Mr Singh confirmed that Mr Albarran had approved the sending of the report to the interested parties. The closing date for offers was 23 August 2019. It follows that the interested parties had only had the report of Mr O’Leary for about three days before the closing date for offers. 231 Only on 21 August were GWD and other interested parties sent Mr O’Leary’s report on the condition of the wine. 232 On Wednesday 21 August 2019, Mr Harris emailed an offer of $1,769,000 all inclusive. That was the first offer received. The subject matter of the email read ‘Expressions of interest receivers and managers bulk and packaged wine’. The GWD offer was subject to sampling analysis and physical stock count of the bulk wine. 233 The second offer of $330,000 was limited to bottled wine, and was received on 23 August, the last day of the campaign. 234 Mr Singh asked Mr Trim and Ms Panova of Hall Chadwick why the GWD offer was conditioned on sampling analysis. He pointed out that he thought that the point of providing the expert report was that that would not be needed. Mr Trim replied: The point of the report being provided was to be able to receive indicative offers only. Given the numbers and volume of the wines especially the bulk wine, and ages thereof, many interested parties wanted to submit indicative offers subject to further tasting / analysis. I think we will need to discuss how we progress once all offers are received, i.e., what Burke says about the offers, what does Richard want to do moving forward etc. 235 On 26 and 27 August, other persons who had expressed an interest were contacted. They confirmed no further offer would be made. A fourth offer for the trademark was made on 27 August but no amount was specified. 236 During the marketing campaign, Burke continued to press Hall Chadwick on a number to provide a contract of sale for the wines over which the receivership extended to a party he described as ‘the New entity’. 237 On 26 August, Mr Singh emailed Mr Trim and Ms Panova and asked for a summary of offers. Mr Trim replied that Mr Harris of GWD had offered $1,600,000 and that O’Maras had offered $300,000 for the bottled wine only. It will be remembered that the Reschke/AustAgri loan application estimated the bottled wine to be worth $3.8 million. Mr Singh asked Mr Trim to call all parties and confirm that no further offer was coming. No attempt was made to persuade Mr Harris to increase his offer. 238 Mr Trim replied on 26 August 2019 that, save for one interested party, the others had either not answered, or had indicated that it was unlikely that they would make any offer. The exception was interested in ‘a couple of particular parcels’. -- 57 of 85 -- [2026] SASC 80 Kourakis CJ 56 239 The response to the sales campaign can only be described as underwhelming. The only effective offer for the entirety of the wine was substantially less than the forced liquidation sale value estimated by Mr Hyman. In the absence of any convincing explanation for the handful of offers, only one of which (GWD) was substantial, and having regard to the late provision of Mr O’Leary’s report, I infer that the marketing campaign was designed more to test the market to establish a floor for Burke’s offer, than to sell the assets to those who responded. 240 The Hall Chadwick marketing campaign can be measured against the expert opinion of Mr O’Brien. In his report, he opined that an appropriate strategy would plan for a six-month selling period with a professional sales and marketing strategy, including a highly experienced bulk wine expert should achieve a sale of 80 percent of the wine. He noted, however, that the market deteriorated during 2020 because of COVID and an increase in duties imposed by China.57 The Hall Chadwick campaign was squeezed into about five weeks. The information memorandum, for which $5,000 was initially sought, was released just over three weeks before offers closed. Mr O’Leary’s notes were provided only days before offers closed. In his report of November 2022, Mr O’Brien valued the 1,774,940 litres of wine warehoused by DFW at $21,058.575 at a per litre average of $1.16. The GWD offer for all the Reschke assets was less than Mr O’Brien’s value of the DFW warehoused wine alone. 241 Two important matters must be noted. There is no record of Mr Trim actively encouraging a higher offer from GWD. Nor is there any discussion of a strategy for improving the offers that had been received during the marketing period. 242 Indeed, it appears that Mr Trim did not contact GWD at all because on 21 August 2019, Dilyana Panova, the Senior Insolvency Accountant with Hall Chadwick, wrote to Mr Harris at GWD confirming receipt of his offer. It also informed him that the offers closed on 23 August 2019 and told him that they hoped to be in touch early in the next week. 243 I questioned Mr Trim about Ms Panova’s email:58 Q. I’m trying to work out when you spoke to him. A. That’s right. I can’t presently recall, but it would have been either before or after at the end of the campaign on 23 August and it may have been that I called him to say ‘We’ve received your offer and thank you, we’re considering it’, I can’t recall, but it wouldn’t have been more substantive than that. Q. In terms of the marketing that Hall Chadwick did, was there a process for going back to someone who’s made an offer to see if it can be increased. Is that an ordinary part of marketing. A. That would be part of the process, yes, typically. 57 Exhibit P7. 58 T219.1-28. -- 58 of 85 -- [2026] SASC 80 Kourakis CJ 57 Q. Can you think of any reason why you wouldn’t do that if it was a sensible offer that was around about the mark. A. No. I can’t say that that didn’t happen either, but by that time it would have been a conversation that Mr Singh or Mr Kijurina or Albarran would have had as opposed to myself. Q. I haven’t been involved in selling bulk wine but I have been at the receiving end of an agent’s attempts to bring my price up. A. Understood. Q. The idea of creating a competitive tension between bidders is something that Hall Chadwick was aware of in terms of its marketing. A. Absolutely. That’s one of the receiver’s obligations, to try and make some items of value for the sale of the assets, yes. 244 Mr Albarran was also asked about whether attempts were made to increase the offers. He testified:59 Q. Mr Albarran, assume that the best offer received was the Get Wines Direct offer - A. Yes, your Honour. Q. Can you think of any reason why no-one from Hall Chadwick - and I want you to assume that no-one from Hall Chadwick did get back to them, on those assumptions, can you think of any reason why no-one from Hall Chadwick would have got back to them. A. No, your Honour, I would have thought my staff would have got back to them and continued to negotiate with them, so that’s all I can make. Q. Yes, I want you to assume that no-one did, can you think of any reason why that might be so. A. No, your Honour. 245 I observe that even though both Mr Trim and Mr Albarran readily accepted the importance of creating a competitive tension, each of them expected the other to do it. That offers were effectively left to languish because of such a misunderstanding within the offices of Hall Chadwick strains credibility. It strengthens the inference that Hall Chadwick’s focus was on a sale to the new Reschke/AustAgri entity. 246 Mr Singh was asked about whether Hall Chadwick considered selling or a sale in a way which would have optimised Mr DiGiorgio’s return:60 59 T596-597. 60 T711-712. -- 59 of 85 -- [2026] SASC 80 Kourakis CJ 58 Q. In any event, the decision was made in this case that the receivers would run a sale campaign to try and realise value for the wine assets. That’s right, isn’t it, Mr Singh. A. Yes. Q. And the receivers were interested in conducting that in the manner that they considered would maximise the price of the assets and the return to their appointor. Is that right. A. Yes. I might just add: with due regard to other potential stakeholders that may have had a claim to assets as well. Q. Who do you mean. A. For example there was - DiGiorgio had a claim as well. So maximising the sale would have meant more funds would have been available to then be paid to the creditors and other stakeholders, including DiGiorgio. Q. Are you saying that you remember active steps were taken to consider selling the bulk wine in a way that would maximise the return to Mr DiGiorgio. A. Okay. I don’t remember the specifically the details of the discussions and the minutia about the decisions however, as I said, if sale of the business and the assets as a going concern was intended to increase the value attained the more value that is attained from the sale of those assets the more funds there are available to then be able to meet those claims. Whether that was specifically in the meeting that we had internally to come and make a decision as to the sale campaign, whether that was specifically mentioned, well, these are the stake holders, and you know, this is who and what - that is something I don’t recall. However, there would have been a pitching in this matter and the decision made to conduct the campaign in the way it was. Q. The reason that you don’t recall discussions of that sort is that you did not turn your mind to whether the separate sale campaign for the sale of the bulk wine alone would realise the best price for Mr DiGiorgio, did you. A. I don’t recall the details, the discussion, or the discussion in which way to conduct the campaign. As I said it was decided that the sales from the going concern would likely increase result in a more likely outcome with the higher sale. I do recall that the previous receivers had conducted a separate campaign and the agent that the previous receiver used to conduct the sale of the wine the bulk wine of Mr DiGiorgio himself explained that he did not believe it was very effective. 247 I do not accept Mr Singh’s characterisation of this issue as being the ‘minutiae about the decisions’. The failure to actively consider breaking up the assets into parcels also suggests a singular focus on a sale ‘as a going concern’. So much is conceded by Mr Singh. That focus risked favouring a sale to the Reschke/AustAgri joint venture and disadvantaging DFW. Hall Chadwick should have considered marketing assets separately. 248 On 27 August, Mr Singh emailed Mr Trim saying: We have the offers so now need to: -- 60 of 85 -- [2026] SASC 80 Kourakis CJ 59 i. Negotiate with Burke on this offer ii. Notify DiGiorgio (via NM) of the position iii. Have all parties agreed and contracts entered into. 249 Plainly, by 27 August, Mr Singh had decided that the preferred course was not to attempt to increase the GWD offer or to explore selling the assets separately any further. Hall Chadwick’s preferred course was that mapped out by Mr Kijurina on 16 May. The timing of the Panova and Singh emails would appear to fit with Mr Trim contacting GWD sometime in the week before 2 September. 250 On Friday 30 August 2019, Mr DiGiorgio again wrote to Mr Agosta. He noted that he had no response from his email of 19 August. He referred to Mr Agosta’s email of 14 August, which does not appear to be in evidence, in which it was anticipated that a proposal would be put by Wednesday 21 August 2019. Mr DiGiorgio drew Mr Agosta’s attention to the email he had sent of 19 August 2019 in which he had put Hall Chadwick on notice that if a satisfactory resolution was not reached by the end of August DFW would arrange the sale of the wines in its possession. Mr DiGiorgio again warned that if he did not receive a response, DFW intended to embark upon its own sales strategy. 251 Mr Agosta replied on 30 August within about two hours of receiving Mr DiGiorgio’s email. He copied the email to Mr Albarran, Mr Kijurina and Mr Singh. It will be remembered that Mr Albarran testified that he read incoming mail from Hall Chadwick’s solicitor. He responded to the notice that DFW would sell the wines by writing:61 I am instructed to advise that my clients: 1. Do not consent to DFW taking the action foreshadowed in your email of 12 August 2019 or any other action with respect to the sale of the wine stock in its possession; 2. Have completed the initial stage of their sale campaign and have received various offers in relation to the Reschke wine stock; 3. Are currently holding internal discussions in relation to the finalisation of the campaign and will revert in due course to advise you of the outcome; 4. Expect that the sale process will be finalised within the next 7-10 days. (emphasis in original) 252 Notably, Mr Agosta did not disclose the breadth of the potential purchasers targeted by the internal sales campaign. It can be inferred, however, that Hall Chadwick were concerned that if DFW marketed or sold the wine it held, as a separate parcel, that would cut across their strategy. 61 Exhibit A1, TB612. -- 61 of 85 -- [2026] SASC 80 Kourakis CJ 60 253 On 2 September 2019, Mr DiGiorgio wrote complaining about the lack of response. 254 On 2 September 2019, Mr Trim sent an email to Mr Kijurina and Mr Singh updating them on the sale process.62 255 Under the heading ‘Wine Sale’, he stated that he had spoken with GWD and O’Maras about their low offers. He recorded that GWD considered some of the bottled wines to be ‘a bit tired’, in particular the 2010 Pinot Noir was mentioned. That statement tends to suggest that the wine was depreciating rather than appreciating over time. GWD had informed Mr Trim that ‘if they were to consider revising their offer, they would need to have a closer inspection of the stock to determine whether there is more value in it than the $1.6 million plus GST they offered. O’Maras told Mr Trim that they would have an internal discussion and get that to him, but they failed to do so. In any event, their offer was limited to bottled wine stock. Mr Trim never got back to Mr Harris about the ‘closer inspection’ he had suggested. 256 A month later, on 9 October 2019, Mr Harris sent an email to both Mr Trim and Ms Panova asking:63 Just following previous conversation with David regarding Reschke Wines to see if you have progressed any further. Then, under the heading ‘Burke’, Mr Trim informed Mr Kijurina and Mr Singh as follows: As per my emails with Richard last week, I spoke to Burke this morning about progressing the sale. He got back to Australia last Thursday but wasn’t up to discuss business on Friday. He is in Melbourne presently and is going to call me back to have a more substantive chat when he can. He said the main issue with moving the sale forward is being able to get Frank DiGiorgio to agree to a reasonable negotiated settlement sum for his debts, and in the meantime he (Burke) is going to play his cards close to his chest in respect of the sale. 257 The information Mr Trim sent on 2 September 2019 explains the failure to follow up GWD wines. In particular, the failure to exploit the competitive tension between GWD and Burke for the purchase of all of the wine assets. It is because Mr Trim was focussing on Burke. The statement, ‘I spoke with Burke this morning about progressing the sale’ must be a reference to a sale to AustAgri, who had been introduced to Hall Chadwick by Burke. Mr Trim was not speaking to Burke about progressing a sale to GWD because Mr Trim had not followed that up at all. Moreover, it is clear from the penultimate paragraph of the letter that Burke’s purchase depended on Mr DiGiorgio reducing his claim for storage charges. Finally, that paragraph also again shows that it was an offer from Burke that 62 Exhibit R24. 63 Exhibit A1, Applicant’s supplementary tender book, TB12. -- 62 of 85 -- [2026] SASC 80 Kourakis CJ 61 Hall Chadwick were waiting on because he records Burke saying that he was ‘going to play his cards close to his chest in respect of the sale’. 258 On 4 September 2019, Mr Agosta wrote to Mr DiGiorgio informing him that Hall Chadwick would provide a copy of the valuation report on execution of the confidentiality deeds. In that email, Mr Agosta indicated that the deed would contain clauses that DFW would not rely on the reports for any commercial purpose and would not contact the author of the report. 259 Mr Agosta’s email continued that the receivers were prepared to provide information to DFW relating to the offers received and the sales campaign. The information provided would be limited to the wine stock in the possession of DFW. Mr Agosta did not advert to the possibility that the offers might not distinguish between the wine held by DFW and might be an offer for all of the Reschke wine. Mr Agosta indicated that the receivers weren’t yet able to communicate a formal proposal to DFW in respect of the wine stock in its possession. 260 Mr Agosta proposed that DFW charges for storage and maintenance would be paid from the proceeds realised on the sale of the wine it held, and it denied any liability for charges incurred prior to the appointment. Again, implicit in that arrangement was a denial of the lien in respect of charges incurred before the Hall Chadwick receivership. It is not at all obvious how Hall Chadwick could properly sacrifice the pre-existing entitlement of a secured creditor, like DFW, in order to advantage either their position, Burke as the proponent of the Reschke phoenix strategy, or Reschke Vineyards as the holder of the NAB charge. 261 Mr Agosta noted Mr DiGiorgio’s intimation that DFW would embark upon its own sales strategy if a satisfactory response was not received. Mr Agosta asked Mr DiGiorgio to ‘advise the basis upon which DFW proposes to take that action, namely, whether pursuant to the terms of any agreement with Reschke or otherwise’. 262 Mr DiGiorgio replied to Mr Agosta’s letter of 4 September on 10 September 2019. He expressed disappointment that a period of four months had elapsed in Hall Chadwick’ receivership without any achievement. He accused Hall Chadwick of not acting in a professional manner in discharging their duties. He compared progress under Hall Chadwick with that of the Ferrier Hodgson Receivership. He claimed that the conditions imposed on disclosing the valuation of Mr Hyman essentially rendered the report ‘absolutely worthless to us’. He asked that Hall Chadwick provide the confidentiality deed. As to the proposal for payment of fees, Mr DiGiorgio wrote:64 In relation to your paragraph numbered 4 we cannot agree that our fees and charges for storage and wine work incurred since the date of your client’s appointment be paid from the proceeds realised from the sale of wine in our possession. Your client expects us to continue storing and caring for the wine and clearly Mr Reschke as the appointor has been 64 Exhibit A1, TB620. -- 63 of 85 -- [2026] SASC 80 Kourakis CJ 62 unable to pay your client to enable us to provide this service. This is what we have been putting up with for years and years. Mr Reschke has simply chosen not to pay and hence where we are today. We have made it very clear to you and to your client from the very beginning that security and rights that we have over the wine are such that the funds achieved from the sale of such wine shall be first utilised to pay the debt outstanding prior to the date that Reschke Pty Ltd was placed into liquidation. Importantly, Mr DiGiorgio added: In fact it is my understanding that the liquidator was unable to proceed with the liquidation from the date that the former receivers retired until the date your clients were appointment as a result of obscure offers being made for all of the assets of Reschke Pty Ltd at a reduced value and I suspect that your client’s appointor was behind this as well. 263 At the very least, Mr DiGiorgio’s history lesson should have spurred Hall Chadwick to carefully evaluate whether the Reschke/AustAgri offer was yet another ‘obscure’ offer, calculated to delay the liquidation, or whether it had real prospects of materialising. 264 Mr DiGiorgio again asked for the ‘commercial proposition’ that Hall Chadwick had indicated they would make. Mr DiGiorgio reiterated that he proposed to commence his own sales strategy. He warned Hall Chadwick that if they wished to restrain him from doing so they should issue proceedings. He advised them that those proceedings would be contested. He indicated that failing to issue the proceedings would be treated as a consent to DiGiorgio proceedings. 265 On 5 September 2019, Mr Singh discussed these matters with Burke and ‘action moving forward’.65 On 10 September 2019, Mr Albarran prepared to attend a meeting with Burke about ‘the sale campaign and recovery action req’ (timesheet entry). Mr Singh’s timesheet record on the same day records ‘Meeting with lawyer and POT purchaser re sale terms’. 266 I infer from the exclusive attention Hall Chadwick gave to a sale to Reschke/AustAgri, that it was satisfied that the responses to its internal sales campaign had established that their offer was at the higher end of the market value and that a sale to them would not be inconsistent with its duty to other creditors and DFW in particular. 267 On 11 September 2019, Mr Pryor of AustAgri emailed an offer to Mr Albarran copying in Mr Singh and Burke with a total purchase price of $1.8 million inclusive of GST. The email read, ‘Please see the attached wine offer from AustAgri concerning the Reschke wine stock’. 268 The offer was dated 11 September 2019.66 It was expressed to be made by AustAgri and claimed confidentiality. The offer was $1.8 million for all of the Reschke wine and intellectual property. It included the Reschke Wines Pty Ltd 65 Exhibit A9. 66 Exhibit A1, Applicant’s supplementary tender book, TB6. -- 64 of 85 -- [2026] SASC 80 Kourakis CJ 63 shares. Payment was to be made 28 days from entering into the formal documentation of a sales contract. 269 Clause 1.4.5 of the offer provided: Upon execution of the Contract the receivers or liquidators will cause the bulk wine to be moved to Jack Estate and samples to be tested, before funds are remitted to DiGiorgio. This is to assure care is taken with the wine and is one of the funder’s requirements. 270 The DFW wine had been tested by Mr O’Leary. There is every reason to suspect that taking possession of the wine before payment was a last ditch attempt to obtain leverage against DFW in negotiating a reduction in its fees. 271 I have concluded that throughout the sales campaign Hall Chadwick had in mind putting the highest offer or offers for the whole assets to the Reschke/AustAgri joint venture in the expectation that he would match them. The assets would then be assigned to AustAgri or a new entity which would fulfill the Reschke phoenix strategy. That can be inferred from: • the minimalist marketing campaign; • the poor result in terms of the offer made relative to the Hyman valuation; • the failure to follow upon GWD to increase their offer; and • the actions flagged by Mr Singh as soon as the public offers expired which was to speak to Burke. 272 On 6 and 9 September, Mr Singh sent emails to other Hall Chadwick staff on which Hall Chadwick rely to support their contention that they were not working towards a sale of the Reschke assets to Burke. The email of Friday 6 September shows that Mr Singh was gathering information and financial analysis to take into a meeting with Burke on the following Tuesday. The aim was to understand the funds available to Hall Chadwick and the liabilities to assess how the sale proceeds would flow through to the stakeholders. In his email of 9 September, he maintained the uninformed position that DFW was not entitled to vintage charges. He also took issue with the obligation to pay DFW’s historical fees and charges. His positions were calculated to facilitate an outcome which accorded with the Reschke phoenix strategy ahead of his meeting with Burke. 273 On 12 September, Mr Agosta informed Mr DiGiorgio that Hall Chadwick had received and considered a number of offers and were preparing a proposal to put to him ‘in relation to release of the company’s wine and settlement of debts owed to you’. 274 The product of that analysis can be seen in an email which Mr Agosta sent to Mr DiGiorgio on 19 September setting out the sale offers received as a result of the marketing campaign of Hall Chadwick. It informed DFW that the top two -- 65 of 85 -- [2026] SASC 80 Kourakis CJ 64 offers for the company’s assets were $1,800,000 and $1,760,000 including GST. It then stated ‘All offers were made by independent third parties’. That was manifestly false having regard to the relationship between AustAgri and Burke Rescke. It noted that the key condition of the best offer was that it required the bulk wine to be moved and samples to be tested before funds were remitted to DFW. 275 The email informed DFW that if the best offer were accepted it would result in a balance of approximately $755,000 being available for distribution to creditors after Hall Chadwick’s fees of about $1,045,000. It proposed that DFW receive 50 per cent of that amount on the basis that the assets held by DFW comprise some 50 per cent of the total assets. I observe here that if the value of the DFW assets were truly 50 percent of the total value, it is surprising that over a year later, after the wine and market conditions had deteriorated, the sales proceeds obtained by DFW at public auction exceeded that amount. Moreover, the sales costs were significantly less than Hall Chadwick’s charges. 276 Hall Chadwick proposed a distribution to DFW from those proceeds of $377,500. It then proposed that a further $345,000 would be paid to DFW for its charges in the period of the receivership of Hall Chadwick. Further, that DFW would receive the proceeds of the Ferrier Hodgson sales in the sum of $473,412. The payment proposed was in the order of one quarter of DFW’s fees and charges. 277 Mr Agosta, for the purposes of swearing his affidavit of 30 September 2025, was asked about his description of AustAgri as an ‘independent purchaser’. Mr Agosta deposed in paragraph [21] of his affidavit that he meant to convey that the AustAgri offer was not from either of the appointors but he deposed in [15] that there was a connection between AustAgri and Burke.67 He also deposed that he did not understand Burke to have any formal role or ownership interest in AustAgri. Against the objection of DFW I received those paragraphs. I reject Mr Agosta’s explanation. I infer from the use of the description ‘independent’ in the context of Mr DiGiorgio’s communicated concern about Burke’s involvement that Mr Agosta was concerned to distance the AustAgri offer from Burke and, for that reason, decided not to disclose the connection between them. Mr DiGiorgio’s correspondence to Hall Chadwick regularly raised his concern that Burke stood in the shadow of the Hall Chadwick receivership and was engineering an outcome to benefit himself. Great care was required in answering his query so that it was accurate beyond reproach. Hall Chadwick or Mr Agosta, or both, failed to take that care. 278 On 20 September 2019, Mr DiGiorgio asked for copies of all of the offers. Mr DiGiorgio wrote to Mr Agosta on 20 September 2019, saying that he was not in a position to consider the offer until he was provided with:68 67 FDN 202. 68 Exhibit A1, TB636. -- 66 of 85 -- [2026] SASC 80 Kourakis CJ 65 1. The valuation of the wine stock currently in DFW’s possession; 2. A valuation of all other assets of Reschke Pty Ltd (in liquidation) and which your clients have been appointed as receivers and managers; 3. A copy of all offers received in relation to all or any of the assets of the company including the two that you refer to in your email; 4. A breakdown of the costs and disbursements of your client to date and any other expenses forming parting of the 1.045 million you refer to; and 5. Details of the trade liabilities that you refer to. 279 In respect of the request for the bids, Mr Agosta referred Mr DiGiorgio to his email of 4 September 2019 in which he asserted that the offers ‘received in the sales campaign’ would be disclosed subject to Mr DiGiorgio signing a confidentiality deed. 280 On 23 September, Mr DiGiorgio received a confidentiality agreement which he executed and returned on 27 September. Hall Chadwick were defined as the providers in the agreement and DFW as the recipient. The primary obligation in clause 2 was that the recipient and its representatives must maintain the confidential nature of the information provided other than to whose persons who required access to it for the permitted purpose which was defined as negotiating a commercial resolution of the assets of Reschke Pty Ltd (In Liquidation). 281 Clause 2.2 provided that DFW must not, without Hall Chadwick’ written consent, disclose any of the confidential information to any person other than those of its representatives who need access to it in connection with the permitted purpose and without limitation including the recipient and/or its business advisors and the liquidator of Reschke Pty Ltd. 282 Mr Albarran and Mr Singh both made cost entries on 27 September 2019 relating to DFW and AustAgri. Mr Singh records a meeting for .8 hours which reads ‘liaising with appointees and staff re matter and disc. with austagri re pot sale and progress with DFW’. Mr Albarran’s note records a meeting for 1.7 hours and reads ‘sev discs with aus agri and dir re pot sale and DiGiorgio’. Mr Albarran was not able to recall the content of the discussions. Nor could he remember whether the item included preparation like reviewing documents or whether the entry was for a long meeting. Mr Albarran did not believe he made notes of the meeting because in the ordinary course another partner was likely to have taken notes. Mr Albarran’s attention was also drawn to Mr Singh’s charge record. On the basis that note, Mr Albarran suggested that Mr Singh was the other partner at the meeting who may have made notes. 283 Mr Kijurina and Mr Albarran made cost entries on 30 September 2019 recording, amongst other things, reviewing the confidentiality deed with Mr DiGiorgio and reviewing correspondence between Mr Agosta and Mr DiGiorgio. -- 67 of 85 -- [2026] SASC 80 Kourakis CJ 66 284 On 30 September 2019, Mr DiGiorgio was informed of the other offers received from GWD and O’Maras in the amount of $1,760,000 and $330,000 respectively but without disclosing their identities. Nor was Burke disclosed to be the source of the offer of $1.8 million. It did not mention that Burke’s offer was conditional on the wine being removed from DFW’s possession and tested before payment was made. On any objective appraisal, the identity of the offeror was critically important given the risk to DFW of such a condition. Of course, the failure to disclose shows that Hall Chadwick were well aware that Mr DiGiorgio’s reaction was likely to be hostile. 285 On 30 September 2019, Burke emailed Mr Trim expressing his concern at how high Hall Chadwick’s charges were and asking for a breakdown. He was also concerned that the GWD offer might not have been independent, surmising that it might have been no more than the negotiation with Mr DiGiorgio. He asked for a meeting with the senior officers of Hall Chadwick, including Mr Albarran, on Friday at the end of the week in Adelaide. The information about the offers sent to Mr DiGiorgio was sent to Burke on 30 September 2019. That is the same day it was sent to Mr DiGiorgio. 286 On 8 October 2019, Mr DiGiorgio demanded payment of his fees from Hall Chadwick, warning that legal proceedings would be taken against them if the invoices were not paid. 287 The invoices were sent to Burke by Mr Agosta. He noted:69 As you are aware, the proposal put to DFW makes provision for the payment of its charges incurred since the appointment of the receivers in May 2019 to be paid from the proceeds realised from the sale of the assets of the company. In the event a resolution cannot be reached on those terms, then the receivers will have little option than to call on the indemnity provided by you pursuant to the deed appointment the receivers. Burke responded that he would dispute the storage invoices. 288 On 15 October 2019, Mr DiGiorgio wrote to Mr Agosta seeking information that he had earlier requested so that he could consider the offer presented. On the same day, Mr Agosta replied that he was awaiting further information so he could provide a complete response. 289 On 18 October 2019, Mr DiGiorgio complained that he had still not received the details he had requested and proposed a sale of the wine held by DFW by the firm Vinex. 290 On 18 October 2019, Mr DiGiorgio informed Mr Agosta that he proposed to conduct his sale of the Reschke wine stored by DFW. 69 Exhibit A1, TB657. -- 68 of 85 -- [2026] SASC 80 Kourakis CJ 67 291 Mr DiGiorgio said:70 It should be quite apparent from the comments that I have made in various emails that I am not satisfied that your clients have undertaken a proper, professional and arm’s length sale process to arrive at the offer that has been made. 292 Mr DiGiorgio said that a sales brochure will be prepared, the sale would be advertised through various wine industry websites and through brokers, and that all of the well-known wine brokers would be informed. A tasting would be organised for 28 October 2019 in Adelaide, 29 October in Mildura and 30 October in Griffith. An online auction was to be conducted via VINEX from 29 October until 1 November. 293 DFW’s agreement with Vinex to sell the wine was made on 6 November 2019. There was a minimum agreed value of $909,749.36. The delivery draw down was to be by 13 December 2019. The minimum agreed volume was 1,246,232 litres. 294 Mr Agosta responded on 18 October. He informed Mr DiGiorgio that the valuation report had been provided. He informed Mr DiGiorgio that his clients: … do not understand why it is that you require a copy of the offers. The sales and marketing campaign was conducted on a confidential basis, so its not appropriate for a copy of the offers received to be provided. 295 In his evidence, Mr Albarran took a contrary view to Mr Agosta. Mr Albarran was asked whether he recalled discussing with others whether DFW should be informed of Burke’s association with an entity which had put in an offer for the wine. He responded:71 I can’t recall what correspondence, what discussions DiGiorgio may have had with my partner. I can’t see a situation in which my partners or I would not have fully disclosed any potential purchaser, so as to discuss the full quantum of what was becoming available in relation to that particular product, so we could then do an amenable transaction. So I can’t see any considerable place when that may not have been my organisation. Mr Albarran later reaffirmed that position:72 … any circumstances where if we received an offer about that specific wine, that was held by DiGiorgio that we would not be disclosing ‘well these are the offers that we have received’ in order to do a transaction. 296 I observe that, of course, the offerors could have been contacted to give their consent. Moreover, it is one thing to ensure confidentiality until the best offer is selected. It is quite another thing to withhold that information from a secured creditor. In any event, the position taken by Hall Chadwick was obviously adopted so as not to disclose that the highest purchaser was connected to Burke to whom, 70 Exhibit A1, TB667. 71 T520. 72 T520. -- 69 of 85 -- [2026] SASC 80 Kourakis CJ 68 as they knew, Mr DiGiorgio bore a great animosity. Copies of the fees were provided on 29 October 2019. Mr DiGiorgio responded to Mr Agosta wanting a breakdown of the wine parcels, which accumulated, yielded the total value given by Hyman. He also asked for information about other assets and their valuations. Mr DiGiorgio made the point that he sought a breakdown of all costs and disbursements, not just Hall Chadwick charges. He asserted his right to be able to sell the wines. 297 In his email of 18 October 2019, Mr Agosta wrote:73 … you have failed to particularise the basis on which you assert an entitlement to sell the said bulk wine. Please do so by reply email as a matter or urgency. My client’s position remains as per previous communications – namely that they do not consent to any action being undertaken by the DiGiorgio Family Wines with respect to the sale of the bulk wine stock. My clients will oppose any such course including by way of court action and will hold DiGiorgio Family Wines liable for any losses suffered as a result of any such action undertaken. (Emphasis in original) 298 On 22 October 2019, Burke emailed Hall Chadwick complaining of the proposed auction of the wine held by DFW through VINEX Exchange. He complained:74 they are lowest price achievers in the market. As soon as the first few parcels get sold, the AustAgri deal is lost and then I have nothing, … is that something we can use to stop this? There is millions of dollars at stake, for his greed to get one or two more dollars out of this (then it is more than he is owed). I understand he has not complied with everything he needs to before auctioning, is that something we can use to stop this? 299 On 22 October 2019, Mr Agosta wrote to Mr DiGiorgio and sought confirmation of DFW’s entitlement to undertake the sale and foreshadowed ‘further action that my clients may wish to take with respect to the foreshadowed sale’. Mr DiGiorgio replied, relying on the PPSR registration and liens. 300 On 22 October 2019, Mr DiGiorgio replied to Mr Agosta:75 My rights in relation to this have not been denied by either the first receivers and managers nor the liquidator, both of whom acknowledge those rights and neither of whom have to ever taken action which may have sought to contradict those rights. I am still holding the same lines pursuant to the same rights and do not need to go through any further preliminary steps to exercise my right of sale. In any event what I am doing is complementary to the 73 Exhibit A1, TB670. 74 Exhibit A1, TB677. 75 Exhibit A1, TB682. -- 70 of 85 -- [2026] SASC 80 Kourakis CJ 69 actions that your client should have undertaken in attempting a proper and well-constructed sale strategy. What I suspect is that Mr Reschke is actually instructing your client to frustrate the sales process for his own benefit as he has done previously and I believe this is well known to the former receivers and managers and the liquidator. That letter was in response to a letter from Mr Agosta, doing as Burke had suggested, asking Mr DiGiorgio to particularise his legislative or contractual entitlements. 301 Burke again complained to Hall Chadwick on 27 October 2019 that as receivers they should be able to control Mr DiGiorgio’s sale. He also offered to ‘organise AustAgri to put in a bid for all of the DiGiorgio wine but if the auction sells just some of the parcels of wine their bid will lapse’. On 28 October 2019, Burke again emailed Hall Chadwick and Mr Agosta saying that he ‘would also expect that Hall Chadwick would be writing to dispute that the sale proceeds all go to DiGiorgio’. He repeated his call to action on 30 October 2019. On the very next day, Mr Kijurina sent a letter to DFW seeking updates in respect of the Vinex sale. He referred to the receivers and managers of the company and the rightful owner of the stock. Court proceedings were again threatened. 302 On 28 October 2019, Burke wrote to Hall Chadwick expecting them to dispute the sale proceeds should all go to Mr DiGiorgio. Mr Agosta responded on the same day saying:76 There is concerns if the sale proceeds, DFW has a lien to secure the entirety of the amount owed to it. Based on the available numbers, the amount realised on sale will be insufficient to discharge the debt due to DFW. As concerns entitlements to the proceeds the competing interests are: 1. DFW – pursuant to its statutory and common law liens; and 2. Reschke Vineyards Pty Ltd pursuant to its right of subrogation as a consequence of the sale proceeds from its assets being used to discharge the debt due by Rocke Castle to NAB. The claim of Reschke Vineyards Pty Ltd is a matter that is best agitated by that entity. I have copied Luke Rowley into this email in order so that he can consider the position and any correspondence to be sent to DFW in that regard. 303 The email is a belated recognition of the irreconcilable conflict in which Hall Chadwick found itself and a recognition that the proper resolution of the conflict lay in proceedings between Reschke Vineyards and DFW. On 1 November 2019, Hall Chadwick wrote to Mr DiGiorgio asking him to account to them for the proceeds of the sale of any of the wine. 304 On 1 November 2019, Mr Agosta sent an email to Mr DiGiorgio copying in Hall Chadwick and asserting that DFW’s rights to payment of ongoing charges 76 Exhibit A1, TB692. -- 71 of 85 -- [2026] SASC 80 Kourakis CJ 70 was limited to payment out of the proceeds. Mr DiGiorgio took issue with that position in responses sent to each on 4 November 2019. 305 For reasons which are not clear, Mr Rowley emailed Hall Chadwick on 4 November 2019 offering to act for them on a speculative basis. On 6 November 2019, Mr DiGiorgio wrote to Mr Agosta offering to purchase the wine himself, and to Ms Jones, Mr Rowley, and Mr Agosta confirming that the proceeds of the Vinex sale would be paid into Court. 306 On 1 November 2019, Mr Agosta wrote to Mr DiGiorgio addressing his most recent demand for payment. He advised that he had instructions to accept service. 307 On 6 November 2019, Mr Rowley emailed Mr Singh. He advised that he had spoken to both Mr DiGiorgio and Burke. He informed Mr Singh that Mr DiGiorgio was advised that: 1. The marketing sales process had concluded, and it was in effect merely an expression of interest. No sale had been effected. 2. If a sale were effected, the money would be paid into a solicitor’s trust account. 3. He was not aware whether any bids had been made by Mr DiGiorgio. 4. Mr DiGiorgio had said that if Burke or anyone else wanted to make an offer they should do it now. 5. He had discussed the position with Burke who is of the view that the best thing to do now is simply to communicate ‘AA’s offer’ without the breakdown. The best time to negotiate was once the money was paid into trust and the wine had left the winery. Burke is of the view that the offer should come from Hall Chadwick offering to purchase DFW wines only (not an intermingled offer). 6. Given [4] (and [1] and [2]) are now clear, Burke would like this to be actioned ASAP. 308 On 7 November 2019, Mr Pryor made an offer to the liquidators for AustAgri to purchase all of the wine stocks for an amount of $1.8 million. 309 On 7 November 2019, Mr Pryor sent the offer to DFW to purchase the wine in its possession. A copy was sent to Hall Chadwick and Mr Agosta.77 The terms were $50,000 on an acceptance of the offer, $200,000 within 14 days of acceptance of the offer. The balance was to be paid within 28 days of acceptance of the offer. However, the offer was conditional on: 77 TB721-723. -- 72 of 85 -- [2026] SASC 80 Kourakis CJ 71 (1) testing of the wine stocks within seven days of acceptance of the offer (and the wine stocks being of sufficient quality). (2) that the wine stocks be transferred upon payment of the purchase price (in full) and free from any claim to be tested again at destination. 310 It is trite to observe that the first condition is extraordinarily vague, there being no reference to the purpose for which the quality was to be sufficient. Moreover, the need for such a condition when the wine had been assessed by Mr O’Leary and valued by Mr Hyman is perplexing. There would be very good reason for Mr DiGiorgio to place little reliance on that offer. 311 Mr DiGiorgio responded to Mr Pryor on 8 November 2019. He rejected the offer. He observed that on 28 October, Burke had informed Vinex that AustAgri would bid for all the wine. However, prior to the auction closing on 1 November 2019, Burke informed Vinex he would not be placing a bid. Mr DiGiorgio asserted that the offer should have been made to Vinex in accordance with the terms and conditions set out in the sales catalogue. He pointed out the commission would nevertheless be payable. There is likely to have been some risk to DFW from departing from the terms of the Vinex offer by accepting AustAgri’s offer. 312 On 14 November 2019, Burke wrote to Hall Chadwick saying that he expected an offer from AustAgri of $1.8 million for the DFW wine and $1.8 million for the wines outside the DiGiorgio winery. On 12 November 2019, Mr Agosta wrote to Mr DiGiorgio. He asserted that the value of individual parcels could not be relevant to his consideration of the commercial resolution. That ignores the legitimate concern of Mr DiGiorgio that the sale of the assets as a whole prejudiced him by sacrificing the value which the wine held by him, and over which he claimed to have a superior security interest, might obtain by separate sale. 313 On 15 November 2019, Mr Agosta wrote to Mr DiGiorgio and copied in Hall Chadwick in respect of a ‘without prejudice’ meeting which took place on 13 November 2019. It referred to Mr DiGiorgio’s advice that 1.2 million litres of the company’s bulk wine had been sold in the purported exercise of DFW’s common law lien. He sought details of the purchasers and wine stock sold. He also wished to have the total price and commission. 314 On 21 November 2019, Mr Rowley wrote to Mr DiGiorgio claiming priority on behalf of Reschke Vineyards over Mr DiGiorgio’s lien and taking issue with his right to sell under the worker’s lien and Warehouse Liens and Storage Act 1990 (SA) and the Personal Property Securities Act 2009 (Cth). On Friday 13 December 2019, Mr DiGiorgio wrote to Mr Pryor asserting that given the interest that he had received for the wine in his possession, its value was between $2.2 and $2.4 million. Mr Pryor, on behalf of AustAgri, responded with an offer of $1.8 million for all the wine and barrels and other assets held or possessed by DFW. -- 73 of 85 -- [2026] SASC 80 Kourakis CJ 72 315 Burke complained to Jovan Singh about Mr DiGiorgio’s attempt to obtain a higher price. On Christmas Eve, Mr Agosta communicated with Burke, Mr Singh, and Mr Albarran about the terms of a proposed offer to be put by AustAgri. As we shall see, that offer was communicated to Mr DiGiorgio on 15 January 2020. 316 On 6 December 2019, Mr Bates from Kingston Estate Wines wrote to Mr DiGiorgio informing him that notwithstanding the consent of the liquidators, Clifton Hall, to the sale of the wine, Hall Chadwick had refused to guarantee clean title. They had asserted that PPSR may not be the highest ranked security and that the GPA did not give him a right to sell the wine stock. On 9 December 2019, Kingston Estate confirmed that they were prepared to proceed with the sale if clear title could be given. 317 On 18 December 2019, Burke emailed Hall Chadwick and Mr Agosta asking who might be best to negotiate with Mr DiGiorgio on the AustAgri offer which had been restated in a letter of 13 December 2019. 318 The offer on this occasion was for $1.8 million. It included the bulk wine barrels and cradles. The offer, though, was expressed in terms of payment within seven days from the execution of a contract of sale incorporating the terms of the offer. It was accordingly subject to agreement on the contract. 319 On 24 December 2019, Mr Agosta sent an email to Burke and Hall Chadwick referring to discussions on 19 December 2019 in which a further offer by AustAgri and its form was discussed. On 7 January 2020, Mr DiGiorgio wrote to Mr Agosta and Hall Chadwick observing that no offer to resolve all matters which had been promised had yet been received. On 15 January 2020, AustAgri made an offer to Hall Chadwick for wine other than the wine stored by DFW and a new offer for the wine held by DFW.78 The DFW offer was increased to $1.85 million. Payment was dependent on entry into a formal contract. An alternative offer of $1.3 million was made for lots 1 to 15. 320 On 20 January 2020, Mr DiGiorgio wrote to Mr Pryor expressing interest in the offer of $1.3 million for lots 1 to 15. The basis of the offer would be payment within 14 days of a contract of sale and the wine being dispatched. AustAgri was to pay the costs of the loading. The proceeds would be paid into a trust account pending resolution of the dispute between the receivers and liquidators. Mr DiGiorgio forwarded a copy of his letter to Hall Chadwick. On 23 January 20250, AustAgri confirmed that sale proposal. That confirmation was sent by Mr DiGiorgio to Hall Chadwick. On 4 February 2020, Mr Agosta sent an email to Mr DiGiorgio stating that Hall Chadwick did not oppose the sale to AustAgri on the condition that the sale resolved the claim against Hall Chadwick of personal liability for the charges. On 13 February 2020, Mr Pryor sent an email to Hall Chadwick requesting a draft agreement. 78 TB779-781. -- 74 of 85 -- [2026] SASC 80 Kourakis CJ 73 321 Between 5 February and 2 March 2020, Mr Agosta, Ms Riach (Mr DiGiorgio’s solicitor), and Ms Jones exchanged emails concerning the terms on which the sale to AustAgri would proceed. Mr Agosta ultimately stated that he had instructions from Hall Chadwick that they would execute the sale agreement to AustAgri on the basis that the sale was quarantined. However, he indicated that DFW should be the nominated vendor. Mr Agosta’s instructions were that:79 … the receivers are now prepared to sign the sale agreement in their capacity as receivers and managers of the company on the basis that their rights are expressly reserved with respect to the post-appointment storage and treatment charges levied by your clients. 322 In an earlier email on 12 February 2020, Hall Chadwick’s position was that the proceeds should not be released to Mr DiGiorgio or DFW but that, if it were released, it should be applied to the charges levied by DFW in the period of the receivership. 323 On 3 March 2020 though, after saying it should be sold and that Hall Chadwick should be the vendors, Mr Agosta wrote to Ms Riach saying, ‘I am instructed that your client should be nominated as the vendor in the sale agreement’.80 324 On 3 March 2020, a draft sale and purchase agreement was circulated by solicitors to DFW and AustAgri. There was subsequent correspondence about some of the terms. On 19 March 2020, Ms Riach contacted Mr Agosta informing him that she was still waiting for the sale agreement from AustAgri’s solicitors. She informed Mr Agosta that she did not propose to engage with him on the dispute over the entitlement to the sale proceeds until after that had been finalised. Mr Agosta replied on 23 March 2020. He took issue with Ms Riach’s position that the question of entitlement to the proceeds would be sorted out in litigation or mediation. Mr Agosta observed:81 The priority issue is a matter between those parties asserting priority entitlement. Whilst my clients have been appointed by one of those parties, it is unlikely that my clients will be required to play any (or at least any active) part in those proceedings. That position, of course, did not address s 419 of the Act. As to that issue, Mr Agosta sought details of the basis on which the claim would be made. 325 Mr Agosta sent a draft agreement to Mr Pryor for ‘purchase of the business’ on 30 March 2020. 326 On 7 May 2020, Ms Riach wrote to Mr Agosta informing him that she had had no further contact from AustAgri and it was, therefore, ‘reasonable to assume that it does not intend to proceed with the sale’. 79 Exhibit A1, TB830. 80 Exhibit A1, TB832. 81 Exhibit A1, TB842. -- 75 of 85 -- [2026] SASC 80 Kourakis CJ 74 327 On 3 April 2020, Ms Riach wrote to the solicitors preparing the sale agreement. She expressed frustration at the delay. She asked that they advise by 8 April 2020 whether AustAgri proposed to proceed. If that confirmation was not received, DFW would treat the negotiation as at an end. 328 On 20 May 2020, Mr Olver sent an email to Hall Chadwick and Burke seeking information ‘to provide to our financiers looking at assisting with expediting the acquisitions here’. 329 On 17 June 2020, Burke sent an email to Hall Chadwick promising more detail in an upcoming email. 330 On 23 July 2020, Burke wrote to Hall Chadwick who had asked for an update, informing them that, other than for several confidential matters, Mr Pryor was happy to give them an update on the proposed purchasers. 331 On 3 August 2020, Nurtrien wrote to Mr DiGiorgio about a possible sale agreement by which Hall Chadwick would consent to DFW selling the wine which was drafted some time in 2020. It provided that Hall Chadwick and the liquidators from Hall Chadwick consented to and authorised Mr DiGiorgio to sell the assets. The sale was proposed through Nutrien. Nutrien was authorised to pay all commissions, costs, and expenses set out in the proposal and the costs of Mr DiGiorgio in making the sale possible. The net proceeds were then not to be disbursed unless there was an order or agreement between the parties. The parties reserved their rights. Ms Riach wrote to Mr Agosta, Ms Jones for the liquidator, and Mr Rowley for Reschke on 5 August 2020. She noted that the proposed sale to AustAgri had terminated because they had withdrawn and that an alternative buyer had not been found. She noted that DFW therefore proposed to sell the wine through Nutrien AG Solutions (NAS). She attached the Nutrien proposal for their consideration. A draft agreement pursuant to which the sale would take place was attached. Mr Agosta replied on 17 August 2020. He informed Ms Riach that he had been informed that AustAgri had recently made a further approach to proceed with the sale from March. He asserted that it was expected to yield a better return, and that the proposed completion was 14 September 2020. 332 On 18 August 2020, Ms Riach’s advised that there had been no approach from AustAgri. On 25 August 2020, Ms Riach wrote to Mr Agosta and Mr Rowley confirming that the liquidator had consented to proceeding in the manner proposed and that if they did not hear from them an application would be made to the Court and costs sought from them. 333 It was not until 2 September 2020 that Mr Pryor wrote to Mr DiGiorgio saying that he thought that the offer from January was still on foot. He apologised for the delay. He said that AustAgri would still like to purchase the wine. Mr Pryor provided a signed agreement to Hall Chadwick in October 2020. On 1 September 2020, proceedings were commenced. -- 76 of 85 -- [2026] SASC 80 Kourakis CJ 75 334 On 8 September 2020, this Court made orders for the sale of the Reschke assets by DFW.82 335 The sale was conducted by NAS on 4 November 2020. The wine was sold for $915,229.92 plus GST, making a total of $1,006,752.91. Mr O’Brien estimated the wine to have a value of $2,264,435.80 in the period June to October 2019. Nutrien charged $25,168.82 in commission. Marketing expenses were $5,650 and additional media was $660. A loading fee, charged by DFW, was also deducted from the proceeds in the sum of $17,744.96. The total proceeds were then $975,219.08. 336 There were further costs directly related to sale. DFW charged for post auction blending of wine at the request of purchasers. The cost of that was $10,000. Mr O’Leary was engaged to prepare samples. A hotel function room was hired for that purpose. 337 Nutrien used an online auction platform to conduct the auction. They produced both a hard and soft copy catalogue. It was distributed to a database they held for wine industry distribution. They placed advertisements in wine title publications. 338 The total of DFW’s storage charges during the Hall Chadwick receivership were $1,299,572.41. The total interest was $487,902.19. The monthly charge was $36,227.80. 339 On 2 September 2025, I ordered that DFW was entitled to payment of the following monies: • $472,189.00, being the remaining funds of the Ferrier Hodgson receivership which were transferred to Clifton Hall; • $46,791.36 held by DFW from its limited sales of Reschke wine made in October 2019 through Vinex in its possession during the Hall Chadwick receivership; and • $946,611.64, being the net proceeds of the Nutrien sale, on the condition that the money was paid into an identified and quarantined DFW account. Resolution of the Universal Distributing claim 340 In Stewart & Anor v Atco Controls Pty Ltd (In Liq) (Stewart),83 the High Court explained the Universal Distributing principle in these terms:84 82 FDN 11. 83 (2014) 252 CLR 307. 84 (2014) 252 CLR 307 at [23]. -- 77 of 85 -- [2026] SASC 80 Kourakis CJ 76 The circumstances in which the principle will apply are where: there is an insolvent company in liquidation; the liquidator has incurred expenses and rendered services in the realisation of an asset; the resulting fund is insufficient to meet both the liquidator’s costs and expenses of realisation and the debt due to a secured creditor; and the creditor claims the fund. In these circumstances, it is just that the liquidator be recompensed. To use the language of Deane J in Hewett v Court, it might be said that a secured creditor would be acting unconscientiously in taking the benefit of the liquidator’s work without the liquidator’s expenses being met. However, such a conclusion is avoided by the application of the principle stated in Universal Distributing. (Footnote omitted) 341 The High Court explained, in Stewart, that the principle applies to a secured creditor ‘coming in’ to the winding up. The Court explained:85 … Dixon J may be understood to say that a secured creditor “comes in” to a winding up when it lays claim to, and seeks the benefit of, a fund created by the liquidator in the winding up in order to satisfy its charge. This may be contrasted with the situation where a security holder acts independently of the winding up and realises and enforces the security by its own action. 342 I observe that the statement in Universal Distributing is limited to the liquidator’s charge ‘against the fund passing through his hands as between himself and the person to whom it is payable’. It contemplates the sale or calling in of assets creating a monetary fund against which a secured creditor has a claim. The case contemplated is one in which the secured creditor has not exercised its security directly over those assets. In respect of work done in converting the assets to a fund, it was only that work done for the exclusive purpose of raising the funds which can be charged. That might be described as the necessary nexus. But the overarching principle expressed in the first sentence of the paragraph is that the expense must have been reasonably incurred. 343 In Primary Securities Ltd v Willmot Forests Pty Ltd (In Liq) (Primary Securities),86 the Court of Appeal of Victoria extended that principle to assets which had been conserved by a liquidator of the responsible entity of a managed investment forestry scheme before the insolvent entity was replaced by the growers. The Court of Appeal upheld the liquidator’s claim for an equitable lien over the assets of the scheme. President Maxwell held that the liquidator’s costs of care and preservation of the assets were closely connected to the benefits which accrued to the creditors of the scheme. Accordingly, the equitable lien ‘does not cease to exist merely because the appointment of the liquidator comes to an end before a fund has been created’. President Maxwell articulated the following conditions for the preservation of the lien in a case in which the liquidator does not actually create the fund against which the claim was made:87 85 (2014) 252 CLR 307 at [37]. 86 (2016) 50 VR 752. 87 (2016) 50 VR 752 at [16]. -- 78 of 85 -- [2026] SASC 80 Kourakis CJ 77 (a) the costs and expenses incurred by the liquidator were incurred exclusively in caring for, preserving and/or realising property; (b) the activity of care, preservation and/or realisation enured for the benefit of the creditors of the company (including the secured creditor); and (c) there is property which can properly be subjected to the liquidator’s charge for remuneration, costs and expenses. 344 The principles in effect apply, with the necessary modifications, the very principles and conditions for the existence of the lien articulated by Dixon J in Universal Distributing. The work, and incurring of expenses, must be applied ‘in recovering moneys … which enure for the debenture-holder, and … increase the remuneration which he receives’.88 345 In Primary Securities, Whelan and Santamaria JJA accepted that the authorities established that the principle applies where the claimant has cared for or preserved an asset even if ultimately the claimant did not create a fund. Their Honours then gave the following example:89 … One circumstance where the principle may apply is where the claimant has acted as a kind of ‘stand in’, undertaking activities which the holder of the proprietary interest would have had to undertake itself had the claimant not done so. In essence, that is what happened in Pattison v Lockwood. On the other hand, if the claimant’s activities are properly characterised as unrelated to the interests or objectives of the holder of the proprietary interest then the claimant may have no entitlement to priority over that proprietary interest holder. It seems to us that that was the position in Dean-Willcocks. 346 In Universal Distributing, Dixon J referred to several 19th century English cases. In In re Regent’s Canal Ironworks Co; Ex parte Grissell, James LJ said:90 The debenture holders are the creditors to whom the property belonged; they were creditors of the company independently, but besides being creditors of the company they had a specific right to the property for the purpose of paying their debts. If the property is realized in the proceedings to which they are parties they must pay the costs of the realization, just as they would have had to pay them if they had their own suit for the purpose of realizing it, or if they had employed a person out of doors. Those are charges to be deducted out of the proceeds of the property, and they are only entitled to the net proceeds of the property. 347 Similarly, in Batten v Wedgwood Coal and Iron Co, Pearson J said:91 With regard to the costs of the realization of the assets, I think Mr Cozens-Hardy is right in contending that these costs stand in a different position from any of the other claims. The property must be realized by someone in order that it may be distributed, and whoever has realized it and brought the proceeds under the control of the Court, has really constituted the fund which has to be distributed for the benefit of the receiver and everyone else who is entitled. These costs must therefore be paid in priority to the receiver. The purchaser is entitled to be paid the amount of his claim out of the purchase-money before 88 (1933) 48 CLR 171 at 174. 89 (2016) 50 VR 752 at [124]. 90 (1875) 3 Ch D 411 at 427. 91 (1884) 28 Ch D 317 at 325. -- 79 of 85 -- [2026] SASC 80 Kourakis CJ 78 everyone else. Then the sum due to [solicitors] for costs incurred before the action must be paid. This was a charge which existed prior to the creation of the trusts of the debenture deed. The other claims will be paid in the following order: (1) The costs of the realization of the property; (2) the balance due to the receiver; (3) the costs, charges, and expenses of the trustees of the deed; (4) the costs of the two Plaintiffs pari passu; (5) the debenture-holders. 348 In Dean-Willcocks v Nothintoohard Pty Ltd (in liq) (Dean-Willcocks),92 the Court of Appeal of New South Wales denied a claim by the receivers to the proceeds of a sale of property because none of the money expended by them could be said to have protected or preserved the property or enhanced its value in a way that produced incontrovertible benefit that ultimately enured to the advantage of the first ranking mortgagee (Sovereign). The company in liquidation, Nothintoohard Pty Ltd, was the registered proprietor of certain land. The second ranking mortgagee appointed receivers over the assets and undertakings of Nothintoohard. The receivers took steps to sell the land but the first ranking mortgagee, Sovereign, exercised its power of sale before the receivers could achieve their sale. The receivers claimed a lien over the proceeds of the sale for their costs incurred in taking steps to sell the land which included engaging an agent and preparing a contract of sale. There was an allegation that the agents appointed by the receivers had made comments to potential buyers which adversely affected the marketing campaign. Justice of Appeal Beazley accepted that in an appropriate case a receiver could claim out of a fund, a business, or property but rejected the receivers’ claim because the trial Judge had found that none of the monies expended by the receivers could be said to have protected or preserved the property or enhanced its value in a way that produced an incontrovertible benefit. Moreover, the trial Judge had found that the expenditures did nothing more than put the plaintiffs in a position where they might sell, but they ultimately did not. Importantly, it was the claims for the engagement of the agent and drawing of the contract which were rejected. Chief Justice Spigelman contemplated that a claim based on care and preservation might have allowed the recovery of relatively small costs involved in changing locks and the provision of security. 349 The question here is whether the costs incurred by Hall Chadwick pursuant to s 419, namely DFW’s fees and charges for storing and safekeeping the wine over the period of their receivership, enured for the benefit of the secured creditor, or to put it in the terms stated by Beazley JA in Dean-Willcocks: preserved the wine in a way that produced incontrovertible benefit that enured to the advantage of DFW. 350 Finally, it is apt to refer to the decision of Hammerschlag CJ in EQ in Volkswagen Financial Services Australia Pty Ltd v Atlas CTL Pty Ltd (receivers and managers appointed) (in liquidation) (Volkswagen).93 The secured creditors in Volkswagen had provided finance for the purchase of vehicles by PJM, which 92 [2006] NSWCA 311. 93 [2022] NSWSC 573. -- 80 of 85 -- [2026] SASC 80 Kourakis CJ 79 operated a vehicle fleet leasing business. The business included the leasing of business to another company in the same corporate group, Atlas, which operated a business of retail short-term car and truck rentals and the lease of vehicles to operators like Uber. The vehicles were purchased or leased by PJM and leased (or on-leased) to Atlas. Administrators were appointed to both companies. The administrators of Atlas decided to continue its business intending to sell it as a going concern. The sale was attempted through expressions of interest. Something over 17 persons registered an interest. They were then provided with an information memorandum. However, the only offers obtained for the purchase of the business were unsatisfactory. Atlas ceased trading. Little, if anything, was realised from the assets of Atlas or PJM. However, significant sums of money were recovered from the sale of the vehicles over which the secured creditors had security. 351 Both PJM and Atlas were wound up. The administrators claimed an entitlement to be paid expenses and remuneration for their work, which they claimed related to care for, preservation of, and attempts to realise the vehicles. The secured creditors denied the claim. Chief Justice Hammerschlag dismissed the administrator’s claim because the trading losses incurred by Atlas and the remuneration of the administrator did not bear the required nexus with the fund created from the sale of the vehicles themselves. The costs incurred in trading the business were instead connected to the attempted preservation of the goodwill and associated intellectual property. The claim was also denied because the decision to trade was not reasonable. Chief Judge Hammerschlag also found that the decision to continue to trade was not directed towards the preservation of the vehicle but the preservation of the goodwill. 352 Chief Judge Hammerschlag accepted that the decision of the Victorian Court of Appeal established the principle that a claim could be made on property that was subject to the security even though no fund was created from its proceeds. That is, that Primary held that claim might be made over property which was the subject of care, protection, and realisation by a liquidator, but that a claim for the care, protection, and realisation of particular property could not be made against quite different property. The claim cannot be made over property other than the property which was the subject of the care, protection, and realisation of the claimant’s expense. His Honour held that that principle reflected ‘equity’s approach that only those costs and expenses which were incurred by the claimant necessarily to give the security-holder the benefit of that security are to be secured’.94 353 It follows that it is only those costs, expenses, and remuneration incurred exclusively in the care, preservation, and realisation of the assets or the proceeds of their realisation which can be claimed against the fund. The exclusivity requirement limits the claim to those costs, expenses, and remuneration directly connected to the care and realisation of the assets and excludes general 94 [2022] NSWSC 573 at [113]. -- 81 of 85 -- [2026] SASC 80 Kourakis CJ 80 receivership costs or costs referable to the care, preservation, and realisation of other assets.95 354 There is no doubt that the cost incurred in having another care for the property is a cost which is recoverable in accordance with a Universal Distributing lien.96 However the decision in Volkswagen remains instructive for two reasons. First the costs over the protracted storage period were incurred for the purpose of selling all the Reschke assets, including trademarks goodwill which held no interest for DFW. Hypothetically trading might have attracted another purchaser for the business as a going concern, but the Hall Chadwick sales campaign failed to attract any such purchaser. There was no evidence adduced that there was a reasonable basis to think that it might when the Reschke’s business had failed many years earlier and it was in liquidation. Moreover, such trading as there was in the course of the Ferrier Hodgson receivership was not substantial. It amounted only to filling orders from a few major customers for bottled wine. The trading by Hall Chadwick, was similarly limited. Its only purpose seems to have been to keep the business on life support so that Burke, who with his close knowledge of the business was the only person likely to purchase it, might find the equity or loan finance to resurrect it. Conclusions 355 I now address in more detail the grounds on which I foreshadowed that I would dismiss Hall Chadwick’s claim for an equitable lien. 356 Hall Chadwick owed Reschke Vineyards, and DFW, a duty to maximise the proceeds of sale of the assets over which it held an assignment of the NAB charge. Hall Chadwick did not owe Burke and Reschke Vineyards any duty to conduct the sale of assets in a way which would facilitate their purchase of the Reschke assets as a whole and thereby achieve the Reschke phoenix strategy. Hall Chadwick was bound by s 420 of the Act to take all care to sell the Reschke assets at or above market value. It would be a breach of s 420 of the Act to conduct the sale of those assets in a way which put Burke in a favourable position to purchase them, if to do so carried a risk of realising less than market value. Mr Albarran seemed to entertain the idea that he might have a duty to do so, or at least that he might be able to facilitate the purchase of all of the assets by the Reschke/AustAgri joint venture consistently with his duty to DFW and other creditors. The ‘testing the market’ strategy was designed to thread that needle. However, as Mr O’Brien’s report points out, the selling of bulk wine requires skill and experience. Hall Chadwick had an in-house marketing team, but there is no evidence that they received marketing advice from an expert of the kind Mr O’Brien had in mind. The threshold question was the extent to which the Reschke assets should be sold 95 Thackray v Gunns Plantations Ltd (2011) 85 ACSR 144 at [42]; Re S & D International Pty Ltd (In Liq) Managers & Receivers Appointed [2009] VSC 225 at [273]; Re Universal Distributing Co Ltd (1933) 48 CLR 171; 13 Coromandel Place Pty Ltd v CL Custodians Pty Ltd (1999) 30 ACSR 377. 96 Thackray v Gunns Plantations Ltd (2011) 85 ACSR 144 at [49]; In re Regent’s Canal Ironworks Co; Ex parte Grissell (1875) 3 Ch D 411. -- 82 of 85 -- [2026] SASC 80 Kourakis CJ 81 separately and whether the wine warehoused by DFW should be sold in parcels. That was Mr DiGiorgio’s opinion as an experienced winemaker. For that reason, he made some sales by way of public auction through Vinpack in October 2019, and then ultimately sold the remaining DFW wine through Nutrien in November 2020. 357 On the evidence of Mr DiGiorgio, including his criticisms of certain aspects of the Hall Chadwick sale strategy, the report of Mr O’Brien, together with the very low responses to Hall Chadwick’s sales campaign, I find that it was poorly devised and implemented. The failure to even attempt to create some competitive tension is an obvious example of the latter. It was unreasonable to embark upon a sales strategy without obtaining independent advice from a wine sale expert on how the proceeds of sale could be maximised overall and in respect of separate parcels of those assets over which there were competing claims to priority. 358 Relatedly, Hall Chadwick embarked upon that strategy by disputing and undermining DFW’s claim. It hoped that by doing so it might lead to DFW sufficiently compromising its claim to allow the purchase of the Reschke assets warehoused by it at a price which the Reschke/AustAgri joint venture was prepared to pay. That was an unreasonable course for Hall Chadwick to adopt because it was not impartial as between the interests of DFW and its appointors. This was an obvious case where their conflict needed to be resolved by obtaining judicial advice and direction. 359 Hall Chadwick should have sought advice on which security had priority and on whether to consent to DFW selling the wine. I do not accept that the lack of funds was a reason for not doing so. There were assets over which they would have a lien for the costs of seeking directions on the critical issue which the conduct of their receivership turned. They were also indemnified by Reschke Vineyards. Alternatively, Hall Chadwick ought to have proceeded to create a fund, by selling the wine expeditiously, over which DFW and Reschke Vineyards could litigate their competing claims. Any one of more of those courses of action would have emptied the DFW’s premises of the Reschke wine, saved costs and optimised the sale proceeds. 360 The prolonged storage period was then exacerbated because Hall Chadwick, having obtained the solitary offer from GWD, which was grossly inadequate to pay DFW’s accumulated storage fees, embarked upon a course of trying to sell the wine for just a little more to the Reschke/AustAgri joint venture. That sale never eventuated despite Hall Chadwick allowing month after month for the sale to be effected. With every extension of time Burke was allowed, the DFW storage charges continued to accumulate. Hall Chadwick seemed to be caught in a spiral of incurring additional expenses in the hope of recouping money already lost. There was every reason, as I have explained in the course of narrating the history of this matter, to suspect that the Reschke/AustAgri joint venture would not ultimately complete on any contract. Burke was the principal of an insolvent company. There was never any clarity over the joint venture arrangement by -- 83 of 85 -- [2026] SASC 80 Kourakis CJ 82 which AustAgri would be given a substantial share in the venture entity. The arrangement may well have been, for example, that Burke would have to finance and establish the entity and procure all the Reschke assets, before AustAgri took its share. Whether or not AustAgri was going to pay for that equity share or how much it was going to pay for it was not known. It may only have been lending its name to the Reschke phoenix strategy in the hope of profiting if it were successful. Nonetheless, despite repeated failures to complete on the Reschke/AustAgri joint venture offers, Hall Chadwick unreasonably clung to the hope it might eventuate and in so doing prolonged the storage period. 361 The Reschke wine remained warehoused on DFW’s premises because Hall Chadwick was not able to effect a sale itself at any time and because it did not consent to DFW selling the wine until August 2020. Accordingly, Hall Chadwick continued to incur liability for the storage fees from the time it decided to leave the Reschke assets in situ until it consented to their direct sale. By the time it gave that consent, the wine had devalued. On Mr O’Brien’s report, much of the wine should, in the ordinary course, have been bottled well before it was sold in 2020. Mr O’Brien opined that none of the Reschke wines were made with the intention of storage, in tank or barrel, beyond 18 to 24 months. Much of the bulk wine stored by DFW was much older than that. 362 Moreover, by the time Hall Chadwick gave their consent, prices had fallen because of both COVID and tariffs imposed by China. For the reasons I have already canvassed and to which I refer through these reasons, the sales campaign conducted by Hall Chadwick was not calculated to optimise the proceeds of sale from the wine warehoused by DFW. Moreover, more than a year had passed between the marketing which Hall Chadwick undertook and the ultimate sale. Its relatively low-key marketing could have been of no assistance to the Nutrien sale conducted more than a year later. 363 I accept that there were other reasons for the Nutrien sale not realising Mr O’Brien’s 2019 valuation of the wine. The public auction by Nutrien over a few days was not long enough to optimise the proceeds of sale. 364 If Hall Chadwick had effected a sale of the wine warehoused at DFW’s premises, it could only have given possession to a purchaser by first paying out the feeds and charges owed to DFW or paying the proceeds into a quarantined account pending resolution by agreement or adjudication. For the reasons given in my preliminary ruling, DFW held the priority over those proceeds. It follows that Hall Chadwick could never have established a fund over which it could have claimed a lien for the liability it incurred for storage fees during the course of its receivership. 365 It would be inequitable for it to recover the expenses it incurred by reason of s 419 of the Act by denying DFW any recovery of its historical fees and charges for warehousing the wine which it made available as an asset in the Hall Chadwick receivership. -- 84 of 85 -- [2026] SASC 80 Kourakis CJ 83 366 Hall Chadwick remains liable for the storage fees from the commencement of its receivership until the time it consented to the sale by DFW through Nutrien. It is not appropriate to engage with a counterfactual and ask how quickly or expeditiously the wine might have been sold if DFW had consented to a professionally and reasonably organised sale by Hall Chadwick. Hall Chadwick did not organise such a sale in accordance with independent expert evidence and objected to DFW doing so. Moreover, DFW was not bound to consent to a sale until its charges were paid. 367 I reject Hall Chadwick’s claim to a Universal Distributing Lien. I would declare that DFW is absolutely entitled to the funds which are the subject of my order made of 2 September 2025. I would give judgment against Hall Chadwick for DFW’s fees and charges from 9 May 2019 to August 2020. I will hear from the parties as to the precise orders which should be made to give effect to these reasons. -- 85 of 85 --