Coshott v Coshott

Case [2013] FCA 907

FEDERAL COURT OF AUSTRALIA

Coshott v Coshott [2013] FCA 907

Citation: Coshott v Coshott [2013] FCA 907
Parties: JAMES COSHOTT and LJILJANA COSHOTT v ROBERT GILBERT COSHOTT, A BANKRUPT and MAXWELL WILLIAM PRENTICE IN HIS CAPACITY AS TRUSTEE OF THE PROPERTY OF ROBERT GILBERT COSHOTT, A BANKRUPT
File number: NSD 1412 of 2009
Judge: BUCHANAN J
Date of judgment: 10 September 2013
Corrigendum 22 November 2013
Catchwords:

BANKRUPTCY – whether bankrupt’s interest in residential property part of bankrupt estate – whether bankrupt held property in trust for family superannuation fund – whether arrangements a sham – alternatively, whether bankrupt held property pursuant to resulting trust

COSTS – whether indemnity costs should be awarded
Legislation: Conveyancing Act 1919 (NSW)
Superannuation Entities (Taxation) Act 1987 (Cth)
Superannuation Industry (Supervision) Act 1993 (Cth)
Superannuation (Self Managed Superannuation Funds) Taxation Act1987
Trustee Act 1925 (NSW)
Cases cited:

Calverley v Green (1984) 155 CLR 242

Colgate Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248
Coshott v Burke [2012] FCA 517
Coshott v Burke [2013] FCA 155

Equuscorp Pty Ltd v Glengallan Investments Pty Ltd (2004) 218 CLR 471
Raftland Pty Ltd v Federal Commissioner of Taxation (2008) 238 CLR 516
Sharrment Pty Ltd v Official Trustee in Bankruptcy (1988) 18 FCR 449

Date of hearing: 24-27 June, 1-2 July 2013
Date of last submissions: 2 July 2013
Place: Sydney
Division: GENERAL DIVISION
Category: Catchwords
Number of paragraphs: 107
Solicitor for the Applicants: Mr K Spencer, Spencer & Co Legal
Solicitor for the First Respondent: The First Respondent appeared in person
Counsel for the Second Respondent: Mr J Johnson
Solicitor for the Second Respondent: Sally Nash & Co Lawyers

FEDERAL COURT OF AUSTRALIA

Coshott v Coshott [2013] FCA 907

CORRIGENDUM

  1. The first word in the name of the fourth cross-respondent be spelled “Schlotzsky” or “Schlotzsky’s”, as the case may be, wherever it occurs. 

I certify that the preceding one (1) numbered paragraph is a true copy of the Corrigendum to the Reasons for Judgment herein of the Honourable Justice Buchanan.

Associate:

Dated:       22 November 2013


IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

NSD 1412 of 2009
BETWEEN:

JAMES COSHOTT
First Applicant

LJILJANA COSHOTT
Second Applicant
AND:

ROBERT GILBERT COSHOTT, A BANKRUPT
First Respondent

MAXWELL WILLIAM PRENTICE IN HIS CAPACITY AS TRUSTEE OF THE PROPERTY OF ROBERT GILBERT COSHOTT, A BANKRUPT
Second Respondent
BETWEEN:

MAXWELL WILLIAM PRENTICE IN HIS CAPACITY AS TRUSTEE OF THE PROPERTY OF ROBERT GILBERT COSHOTT, A BANKRUPT
Cross-Claimant
AND:

JAMES COSHOTT
First Cross-Respondent

LJILJANA COSHOTT
Second Cross-Respondent

ROBERT GILBERT COSHOTT, A BANKRUPT
Third Cross-Respondent

SCHLOTSZKY'S NOMINEE COMPANY PTY LIMITED
Fourth Cross-Respondent

JUDGE:

BUCHANAN J

DATE OF ORDER:

10 SEPTEMBER 2013

WHERE MADE:

SYDNEY

In respect of the application in this Court in NSD 1412 of 2009

THE COURT ORDERS THAT:

1.The application filed in the Supreme Court of New South Wales on 24 June 2009, later transferred to this Court, is dismissed. 

2.The applicants in this Court are to pay the costs of the…

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Coshott v Coshott [2013] FCA 907
Case
[2013] FCA 907
Decision Date

CaseChat Overview and Summary

Coshott v Coshott involves a dispute over the ownership of a residential property in New South Wales. The bankrupt, Coshott, claimed that he held the property in trust for his family superannuation fund, while the cross-claimant argued that the bankrupt held the property pursuant to a resulting trust. The case was heard in the Federal Court of Australia.

The central legal issues were whether the bankrupt's interest in the property was part of his bankrupt estate, whether the bankrupt held the property in trust for the family superannuation fund, and whether the arrangements were a sham. If not, the court had to determine whether the bankrupt held the property pursuant to a resulting trust. Additionally, the court had to decide whether indemnity costs should be awarded.

The court found that the bankrupt did not hold the property in trust for the family superannuation fund, and the arrangements were a sham. It was determined that the bankrupt held the property pursuant to a resulting trust, with the cross-claimant as the beneficiary. The court awarded indemnity costs to the cross-claimant, as the cross-respondents were found to have acted vexatiously, unreasonably, and without merit.

The orders of the court required the property to vest in the cross-claimant as trustee for sale, with specific instructions for the sale process and division of proceeds. The cross-respondents were also ordered to deliver up vacant possession and continue to meet half of the outgoings pending the sale. The proceeds of the sale were to be distributed in a specified priority, with the cross-respondents responsible for the costs of the cross-claimant on an indemnity basis.

Orders

Orders of the court

6. The property vest in the cross-claimant as trustee for sale.

7. The property be sold by the cross-claimant as trustee for sale, with all the obligations and privileges pertaining thereto (including signing for and on behalf of the second cross-respondent any contract for the sale of land and any transfer pursuant to the Real Property Act 1900 (NSW) and determining the price at which the property is to be sold) and the proceeds after payment of all expenses of and incidental to such sale to be divided equally between the cross-claimant and second cross-respondent, pursuant to order 11.

8. For the purposes of giving effect to order 7, the second cross-respondent, by herself her servants and agents do all such things, acts and deeds and sign all documents to list for sale and sell the property, and for that purpose, including but not limited to the following:

8.1 maintain the property in a clean and presentable manner as required for the proper and effective marketing of the property;

8.2 allow and permit for an inspection of the property on 24 hours notice of a request made by the cross-claimant or agent for sale.

9. Each cross-respondent deliver up vacant possession of the property 42 days from these orders.

10. Pending the sale of the property and to the extent to which she is able, the second cross-respondent shall continue to meet one half of the outgoings (including electricity, gas, telephone and council rates) in respect of the property.

11. Upon completion of the sale of the property, the proceeds thereof be distributed in the following manner and priority:

11.1 Firstly, in discharge of any valid encumbrance over the title to the Property;

11.2 Secondly, in payment of agent’s commission, auctioneers and auction fees associated with the sale of the property;

11.3 Thirdly, expenses and reasonable legal costs and disbursements incurred upon the sale of the property;

11.4 Fourthly, in adjustment of council rates, water rates and other statutory imposts;

11.5 Fifthly, in payment of the cross-claimant’s professional and legal costs of the proceedings;

11.6 Sixthly, and subject to orders above, the remains to be divided equally between the cross-claimant and the second cross-respondent subject to any charge or lien.

12. The cross-respondents are to pay the costs of the cross-claimant, as taxed, on an indemnity basis.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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