Coshott v Burke

In the case of Coshott v Burke, the applicant, Robert Coshott, sought to review a decision of the trustee in bankruptcy, which was to partially admit the Commonwealth Bank of Australia's proof of debt for a judgment debt and an estimation of the value of orders for costs in its favour. The trustee had previously advertised that it proposed to distribute a final dividend to creditors within five business days, and creditors were required to provide proofs of debt by a specified date. The bank did not file a proof of debt with the trustee prior to the specified date, but later lodged proofs of debt with the trustee. The trustee admitted the proofs of debt in part and rejected the balance of the amounts claimed by the bank.

The legal issues in this case were whether the Court should reject the late proof of debt on a review of the trustee’s decision under s 104 in respect of the bankrupt seeking annulment under s 153A, and whether the Court should conduct a review de novo under s 104 of the trustee’s decision to admit or reject the creditor’s proof of debt.

The Court conducted a review de novo under s 104 of the trustee’s decision to admit or reject the creditor’s proof of debt. When considering whether the trustee (or Court) was satisfied for the purposes of s 153A(1) that the bankrupt had paid all provable debts in full, the trustee (or Court) was not constrained by the time specified in the notice to creditors under s 145(3). The Court found that the trustee’s decision to admit the proofs of debt in part and reject the balance of the amounts claimed by the bank was not unreasonable.

The Court dismissed the application and ordered the applicant to pay the second respondent's costs of the proceedings. The Court found that the bank's claim that it had released the judgment debt and costs orders in its favour for the sum of $1 was not credible, and that the bank had no documents relevant to the existence of the release or of any negotiations for bringing such a document into existence. The Court also found that the bank had not incurred the irrecoverable costs of proceeding to prepare a bill of costs for assessment in accordance with the Legal Profession Act 2004 (NSW).