Barry v Coshott

[2015] FCCA 1673

FEDERAL CIRCUIT COURT OF AUSTRALIA

BARRY & ANOR v COSHOTT [2015] FCCA 1673

Catchwords:
PRACTICE AND PROCEDURE – Adjournment application – reasons for refusal.

Legislation:

Bankruptcy Act 1966 (Cth), s.49

Cushway v University of New England [2015] FCA 578

Applicants: STEPHEN MICHAEL BARRY AND MARTIN PEARCE BOARD

Respondent: LILJANA COSHOTT

Supporting Creditors: MAXWELL WILLIAM PRENTICE, STEPHEN MICHAL BARRY (IN RELATION TO CERTAIN ADDITIONAL DEBTS) AND RUI OLIVEIRA

File Number: SYG 1846 of 2014

Judgment of: Judge Driver

Hearing date: 18 June 2015

Delivered at: Sydney

Delivered on: 18 June 2015

REPRESENTATION

Solicitors for the Applicant: Mr J Merewether of Merewether & Co

Counsel for the Respondent: Mr A Cheshire

Solicitors for the Respondent: Martin Place Lawyers

Counsel for the Supporting Creditors: Mr J T Johnson

Solicitors for the Supporting Creditors: O’Neill Partners incorporating Sally Nash & Co

ORDERS

1. The respondent’s application for an adjournment of the hearing of the petition, made orally on 18 June 2015, is refused.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYG 1846 of 2014

STEPHEN MICHAEL BARRY AND MARTIN PEARCE BOARD

Applicants

And

LILJANA COSHOTT

Respondent

MAXWELL WILLIAM PRENTICE, STEPHEN MICHAL BARRY (IN RELATION TO CERTAIN ADDITIONAL DEBTS) AND RUI OLIVEIRA

Supporting Creditors

REASONS FOR JUDGMENT

1. Earlier today I refused an oral application made by counsel for the respondent debtor (Ms Coshott) in this matter.  I have been asked to provide reasons for that ruling, which I now do. 

2. This matter has been before the Court since 3 July 2014 when a creditor’s petition was filed against Ms Coshott.  The matter has been before the Court on numerous occasions since then.  There have been numerous adjournments granted.  I cannot recall Ms Coshott ever attending court and she has not, to this point, provided any affidavit evidence in opposition to the creditor’s petition. 

3. Grounds of opposition to the petition were filed on 7 August 2014.  I commenced hearing the petition on 16 April 2015.  At that time I found that, prima facie, the then petitioning creditors were entitled to the relief sought and I rejected the grounds of opposition, save for the issue of solvency.  I adjourned the matter part heard until today on being told that the parties were in discussions with a view to resolving the debt supporting the petition and that the principal asset of Ms Coshott, being a property at 1 Bunyula Road, Bellevue Hill was to go to auction at the instigation of the trustee in bankruptcy of Ms Coshott’s husband.  Ms Coshott owns a half share in that property and I had in mind that she should have a further opportunity to advance solvency evidence in view of the possible sale of the property. 

4. Today, on the resumption of the hearing, the petitioning creditors sought leave to withdraw, their debt having been satisfied in the interim. I made orders by consent granting that leave. Two supporting creditors, Stephen Michael Barry and Martin Pearce Board, immediately applied to be substituted, pursuant to s.49 of the Bankruptcy Act 1966 (Cth). I granted that application.

5. Counsel for Ms Coshott then sought a further adjournment in order to permit her to provide solvency evidence in light of the fact that the property at Bellevue Hill was sold at public auction for $3,775,000 on 2 June 2015.  Ms Coshott anticipates receiving 50 per cent of the net proceeds of the sale on settlement, which is due to occur either on 14 July 2015 (as her counsel submitted) or in September, as submitted by counsel for two further supporting creditors[1]. 

   [1] see Exhibit S1

6. Counsel for the supporting creditors took me to the decision of Perry J in Cushway v University of New England[2] where her Honour set out the applicable principles in circumstances such as the present.

   [2] [2015] FCA 578 at [23]-[29]

7. I rejected the application for an adjournment for three reasons.  First, the petition will expire on 3 July 2015 unless extended and the hearing in relation to it is substantially completed.  The efficient administration of justice calls for the resolution of the proceedings without undue delay.  Secondly, the creditors of Ms Coshott face a significant prejudice if these bankruptcy proceedings are not resolved prior to the settlement of the sale of the property and the payment of funds to Ms Coshott.  Thirdly, Ms Coshott has already had almost a year to provide evidence of her solvency.  I gave directions in September 2014 providing for her to put on evidence in support of the grounds of opposition by 3 October 2014, which was subsequently extended to 31 October 2014.  Nothing has been filed by her in respect of her solvency.  Her counsel points out that there has been a material change in that Ms Coshott’s principal asset is in the course of being realised for a sum certain and that, up until now, she was probably not in a position to give reliable evidence as to her solvency.  While that is no doubt true, the sale price of the property has been known since 2 June 2015 and Ms Coshott could have provided solvency evidence before today. 

8. In refusing the application for an adjournment, I gave the parties approximately four hours to provide an amended petition (in consequence of my order pursuant to s.49) and solvency evidence.

I certify that the preceding eight (8) paragraphs are a true copy of the reasons for judgment of Judge Driver

Associate: 

Date:  18 June 2015