The former directors of collapsed fashion group Mosaic Brands have lost a Federal Court fight to keep their safe harbour legal advice out of the hands of the group’s liquidators.
Mosaic, which operated Rivers, Millers, Noni B, Katies and Rockmans, entered voluntary administration on October 28, 2024, and liquidation on July 1, 2025. Through investigations by administrators at FTI Consulting, it was found Mosaic's estimated total liabilities were around $385 million.
Justice Brigitte Markovic found that the directors waived legal professional privilege over the advice, in a judgement handed down last week. According to Justice Markovic, the directors waived privilege when they handed it to the group’s administrators in December 2024, and by recording it in board minutes.
The latest ruling clears the way for special purpose liquidators Andrew McCabe, Wenjie (Jessie) Wang and Joseph Hayes at Wexted Advisory to use much of the advice. The liquidators are investigating possible claims against current and former directors and the group’s former lawyers, Hamilton Locke.
The liquidators brought the application in May. It followed claims by directors, including David Wilshire, Scott Evans, Jacqueline Frank and Quentin Gracanin, that the advice belonged to them personally rather than to Mosaic.
The court accepted that argument. Justice Markovic found Hamilton Locke had been retained by the directors alone to give the safe harbour advice, which started in March 2020. She found that while a safe harbour course of action is pursued for the company’s benefit, the protection the regime offers is for the directors. She also found that Hamilton Locke’s position, set out by its solicitors, that its engagements were with the company rather than its directors was not conclusive.
However, the court found the directors gave up that protection through their own conduct.
In December 2024, director Richard Facioni sent administrators FTI Consulting a safe harbour timeline, memorandum and linked documents approved by the directors. His covering email stated that the directors did not intend to waive privilege, and described any disclosure as “inadvertent and unintentional.”
The directors argued they had been compelled to hand over the material. Justice Markovic rejected this. She found the administrators’ request had been carefully framed and sought only a summary from the directors. She also found the handover was an intentional act, taken on legal advice, and could not be classified as inadvertent.
Justice Markovic found the material was provided so the administrators could assess the strength of the directors’ safe harbour defence against any future insolvent trading claim. The waiver was not limited to the administrators. It extended to the general purpose liquidators, the special purpose liquidators and beyond.
Separately, the court found that recording the safe harbour advice in board minutes also amounted to a waiver. The directors could have noted only that advice had been received, or kept it in a separate document.
The court also found that sharing the advice with Mosaic staff did not breach its confidentiality, and that the liquidators had not shown a waiver when board minutes were sent to auditor BDO.
Whether work done by Deloitte, which supported Hamilton Locke’s advice, is privileged is yet to be decided. The parties have been ordered to submit proposed orders, including on whether a further hearing is needed on the extent of the waiver. If they cannot agree, a case management hearing is listed for November 9.
The ruling makes no finding on whether any director traded while insolvent.