Barry v Coshott (No.2)

[2011] FMCA 228

FEDERAL MAGISTRATES COURT OF AUSTRALIA

BARRY v COSHOTT (No.2) [2011] FMCA 228

BANKRUPTCY – Creditor’s petition – joint indebtedness with debtor’s spouse – pending proceedings in Federal Court concerning bankrupt estate of spouse – settlement providing for full payment of creditors and discharge of spouse before July 2011 – petition adjourned.

Bankruptcy Act 1966 (Cth), ss.52(2)(a), 153A

Barry v Coshott [2010] FMCA 930
Coshott v Barry & Board [2010] NSWSC 1324
Eykamp v Deputy Commissioner of Taxation [2010] FCA 797

Applicant: STEPHEN MICHAEL BARRY

Respondent: LJILJANA COSHOTT

File Number: SYG 1738 of 2010

Judgment of: Smith FM

Hearing date: 31 March 2011

Delivered at: Sydney

Delivered on: 31 March 2011

REPRESENTATION

Counsel for the Applicant: Mr J Johnson

Solicitors for the Applicant: Sally Nash & Co

Counsel for the Respondent: Mr S Bliim

ORDERS

1. Any application to amend the petition and any affidavits in support must be filed and served no later than 4 pm on 28 June 2011.

2. Any affidavits in response, or in support of a further adjournment application must be filed and served no later than 4 pm on 1 July 2011.

3. The petition is adjourned for further hearing on 5 July 2011 at 10.15am.

4. Costs reserved.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT SYDNEY

SYG 1738 of 2010

STEPHEN MICHAEL BARRY

Applicant

And

LJILJANA COSHOTT

Respondent

REASONS FOR JUDGMENT

(revised from transcript)

1. This is the resumed hearing of Mr Barry’s creditor’s petition against Mrs Coshott.  The hearing of the petition commenced on 24 November 2010, and was adjourned for reasons which I explained in Barry v Coshott [2010] FMCA 930. It is unnecessary for me to recite the background of the matter or the reasons which led me to conclude that an adjournment was appropriate.

2. In short, on that occasion Mrs Coshott’s counsel conceded that she had no good ground of opposition to the petition. However, he submitted that there was a prospect that the debt relied upon by Mr Barry in the petition, which is jointly owed by Mr Coshott, would be paid in the course of a settlement of proceedings on foot before Rares J involving members of Mrs Coshott’s family and Mr Coshott’s trustee in bankruptcy. The envisaged settlement, which at that stage was being negotiated with the assistance of mediation in the Federal Court, contemplated the possibility of an annulment of Mr Coshott’s bankruptcy by force of s.153A of the Bankruptcy Act. The annulment would occur “If the trustee is satisfied that all the bankrupts’ debts have been paid in full”.  This includes the trustee’s expenses and remuneration which would otherwise be payable out of the estate vested in him. 

3. I had some scepticism as to that prospect, and considered that the evidence before me at that time pointed to “only a short adjournment” being granted for the petition.  I also required that Mrs Coshott should demonstrate “a degree of candour in relation to her current financial circumstances”, and ordered her to file evidence which would be…