Coshott v Parker

Case [2018] FCA 596

FEDERAL COURT OF AUSTRALIA

Coshott v Parker [2018] FCA 596

File number: NSD 1460 of 2017
Judge: LEE J
Date of judgment: 26 April 2018
Catchwords: STATUTORY INTERPRETATION – separate question regarding the operation of s 68 of the Limitation Act 1969 (NSW) – whether, in the context of a maintained general retaining lien, that section has the effect that certain statute-barred debts were nevertheless payable in the administration of a deceased estate – s 68 has the effect that the debts are not payable
Legislation:

Bankruptcy Act 1966 (Cth), s 122(1)

Corporations Law, s 477(1)(b)

Federal Court of Australia Act 1976 (Cth), Pt VB

Federal Court Rules 2011, r 35.14

Interpretation Act 1987 (NSW), ss 33(2)(b), 34(1)

Limitation Act 1969 (NSW), Pts 2, 4, ss 14, 63, 68

Probate and Administration Act 1898 (NSW), s 82

Cases cited:

Blunden v Desart (1842) 2 Dr & W 405

Coshott v Barry [2016] FCAFC 173; (2016) 248 FCR 534

Coshott v Parker [2017] NSWSC 1098; (2017) 323 FLR 212

Gavin Edmondson Solicitors Ltd v Haven Insurance Co Ltd [2018] UKSC 21; [2018] 1 WLR 2052

In Re Rownson; Field v White (1885) 29 Ch D 358

McGrath v Troy as administratrix of the estate of the Late Warren Terence Wade [2010] NSWSC 1470

Re Cancol Ltd [1996] 1 All ER 37

Re Cao; Ex parte Dixon [1996] ANZ Conv R 321

Re Oygevault International BV (in liq) (1994) 14 ACSR 245

Spedley Securities Ltd (in liq) v Western United Ltd (in liq) (1992) 7 ACSR 271

West of England and South Wales Bank v Batchelor (1882) 46 LT 132

Handford P, Limitations of Actions – The Laws of Australia (4th ed, Thomson Reuters, 2017)

Law Reform Commission of New South Wales, The First Report on the Limitation of Actions [1967] LRC 3

Law Revision Committee, Law Revision Committee Fifth Interim Report: (Statutes of Limitation) (Lord Chancellor’s Department, London, 1936)  
Date of hearing: 26 April 2018
Registry: New South Wales
Division: General Division
National Practice Area: Commercial and Corporations
Sub-area: General and Personal Insolvency
Category: Catchwords
Number of paragraphs: 31
Counsel for the Applicant: Mr A Cheshire SC
Solicitor for the Applicant: Murphy Lyons Lawyers
Counsel for the Respondents: Ms M Castle
Solicitor for the Respondents: Hicksons Lawyers

ORDERS

NSD 1460 of 2017
BETWEEN:

LJILJANA COSHOTT AND ROBERT COSHOTT FORMERLY TRADING AS ROBERT G COSHOTT & ASSOCIATES

Applicant
AND:

MICHELLE LENA PARKER

First Respondent

CHRISTINA MARIE COLLINS

Second Respondent

JUDGE:

LEE J

DATE OF ORDER:

26 APRIL 2018

THE COURT ORDERS THAT:

1. The Preliminary Issue (as identified in Order 1 made on 6 April 2018) be answered “no”.

2.The proceeding be otherwise dismissed.

3.The applicants pay the respondents’ costs of the proceeding.

4.The respondents be awarded a lump sum for their costs in a sum to be determined by a Registrar of the Court.

5.Within 14 days, the respondents are to file and serve any evidence and submissions upon which they propose to…

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AGLC
Coshott v Parker [2018] FCA 596
Case
[2018] FCA 596
Decision Date

CaseChat Overview and Summary

In the case of Coshott v Parker, the plaintiff sought a declaration that certain debts, which had been statute-barred prior to the death of the debtor, were payable in the administration of the estate. The case was heard in the Federal Court of Australia, where the parties contested the interpretation of Section 68 of the Limitation Act 1969 (NSW) and Section 82 of the Probate Act. The court was required to determine whether these statutory provisions mandated the payment of debts that had become statute-barred before the debtor's death.

The primary legal issue before the court was whether the operation of Section 68 of the Limitation Act, when considered in the context of a maintained general retaining lien, mandated the payment of debts that were statute-barred prior to the death of the debtor. The court had to interpret the term 'creditors' as used in Section 82 of the Probate Act and consider whether it included those to whom debts were not actually owing due to being statute-barred. The court was also required to examine if Section 68 of the Act altered the fundamental conclusion that debts barred by statute should not be paid.

The court held that Section 68 of the Limitation Act does not alter the fundamental principle that debts which are statute-barred should not be paid in the administration of a deceased estate. The court interpreted 'creditors' in Section 82 of the Probate Act to mean persons to whom the estate has a subsisting legal liability, that is, those to whom a debt is actually owing. As such, if debts were statute-barred before the death of the debtor, the respondents were never obliged at law to pay those debts, and Section 68 does not change this conclusion. Consequently, the preliminary issue was answered in the negative, and the proceeding was dismissed with costs.

In conclusion, the court dismissed the proceeding and ordered that the applicants pay the respondents' costs, including a lump sum to be determined by a Registrar of the Court. The respondents were also granted a period to file evidence and submissions for the quantification of the lump sum, followed by a similar period for the applicants. The Registrar was directed to determine the quantum of the lump sum for costs and order the applicants to pay the sum within 28 days from the date of the order. The time for any application for leave to appeal against these orders was extended to seven days after the publication of the revised reasons for judgment.

Orders

Orders of the court

1. The Preliminary Issue (as identified in Order 1 made on 6 April 2018) be answered “no”.

2. The proceeding be otherwise dismissed.

3. The applicants pay the respondents’ costs of the proceeding.

4. The respondents be awarded a lump sum for their costs in a sum to be determined by a Registrar of the Court.

5. Within 14 days, the respondents are to file and serve any evidence and submissions upon which they propose to rely on the issue of quantification of the lump sum for costs.

6. Within a further 14 days, the applicants are to file and serve any evidence and submissions upon which they propose to rely on the issue of quantification of the lump sum for costs.

7. The Registrar be directed pursuant to FCR 1.37 to determine the quantum of the lump sum for costs payable pursuant to Order 4 above in such manner as he or she deems fit including, if thought appropriate, on the papers.

8. The Registrar be directed pursuant to FCR 1.37, at the conclusion of the quantification process, to order that the applicants are to pay whatever sum has been quantified pursuant to Order 7 above and for that amount to be paid within 28 days from the date of the Registrar’s order.

9. Pursuant to FCR 1.39, the time fixed by which any application for leave to appeal against these Orders be brought be extended to the date 7 days after the publication to the parties of the revised reasons for judgment.

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

I was not referred to any authority in relation to s 82 of the Probate Act, nor was the argument developed in written submissions. From first principles, however, it seems to me that ‘creditors’, as that term is used in s 82, means persons to whom the estate has a subsisting legal liability: that is, a person to whom a debt is actually owing. Although a debt may continue to exist, it is unable to be maintained or enforced and it is inconsistent with the duty of an executor to waste the estate which is being administered, by extending an obligation to pay to those debts which are statute-barred. It follows from the above that if the Retainer Debts were statute-barred before the death of the Deceased, as is common ground, the respondents were never obliged at law to pay those debts, and nothing about s 68 of the Act, properly construed, changes this conclusion. E CONCLUSION AND ORDERS It follows from the above that the Preliminary Issue must be answered “no”. Consistently with the cooperative manner in which this proceeding has been conducted, the parties agreed that the appropriate course upon the answering of the Preliminary Issue in the negative was for the proceeding to be dismissed with costs. Orders will be made accordingly, including facilitating the quantification of a lump sum for costs to be ordered in favour of the respondents.

Ratio Decidendi

Legal Principle Established

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