FEDERAL COURT OF AUSTRALIA
Coshott v Prentice [2013] FCA 1085
Citation: Coshott v Prentice [2013] FCA 1085 Parties: LJILJANA COSHOTT and SCHLOTZKY'S NOMINEE COMPANY PTY LIMITED v MAXWELL WILLIAM PRENTICE (IN HIS CAPACITY AS TRUSTEE OF THE PROPERTY OF ROBERT GILBERT COSHOTT, A BANKRUPT), ROBERT GILBERT COSHOTT, A BANKRUPT and JAMES COSHOTT File number: NSD 2016 of 2013 AND Parties: FEWIN PTY LIMITED ACN 051 132 453 v MAXWELL WILLIAM PRENTICE (IN HIS CAPACITY AS TRUSTEE OF THE PROPERTY OF ROBERT GILBERT COSHOTT, A BANKRUPT), LJILJANA COSHOTT File number: NSD 2140 of 2013 Judge: PERRY J Date of judgment: 31 October 2013 Catchwords: PRACTICE AND PROCEDURE – Applications for a stay pending appeal – an interested person may apply – preservation of equitable mortgagee’s interest – relevance of delay – failure to take measures to protect interest Legislation: Bankruptcy Act 1966 (Cth) ss 28, 30, 115(1), 116(1)
Conveyancing Act 1919 (NSW) ss 7(1), 66F(1), 66G
Federal Court of Australia Act 1976 (Cth) ss 37M, 37N
Judiciary Act 1903 (Cth) s 79
Real Property Act 1900 (NSW) ss 42, 60
Federal Court Rules 2011 r 36.08, 36.10, Sch 1Cases cited: Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685
Coshott v Coshott [2013] FCA 907
Coshott v Prentice [2013] FCA 1036
Ozden v Ozden [2013] VSCA 195
Park v Barclay (2010) 239 FLR 396
Powerflex Services Pty Ltd v Data Access Corporation (1996) 67 FCR 65
Re Middle Harbour Investments Ltd (In liq) (Unreported, Court of Appeal, NSW, 15 December 1976)Dates of hearing: 21-22 October 2013 Date of last submissions: 22 October 2013 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 80 Counsel for the Applicant: Mr D Murr SC and Mr W Washington Solicitor for the Applicant: Shana Radnan & Co Pty Limited Counsel for the First Respondent: Mr J Johnson Solicitor for the First Respondent: Sally Nash & Co Laywers Counsel for the Second Respondent / the Appellant: Mr R Carey Solicitor for the Second Respondent / the Appellant: Spencer Whitby & Co Legal
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 2016 of 2013
BETWEEN: LJILJANA COSHOTT
First AppellantSCHLOTZKY'S NOMINEE COMPANY PTY LIMITED
Second Appellant
AND: MAXWELL WILLIAM PRENTICE (IN HIS CAPACITY AS TRUSTEE OF THE PROPERTY OF ROBERT GILBERT COSHOTT, A BANKRUPT)
First RespondentROBERT GILBERT COSHOTT, A BANKRUPT
Second RespondentJAMES COSHOTT
Third Respondent
JUDGE:
PERRY J
DATE OF ORDER:
31 OCTOBER 2013
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1.The interlocutory application filed by the first appellant on 21 October 2013 seeking a stay of orders made on 10 September 2013 in proceeding (P)NSD 1412 of 2009, be dismissed.
2.The interlocutory application filed by Fewin Pty Limited ACN 051 132 453 on 22 October 2013 seeking a stay of orders made on 10 September 2013 in proceeding (P)NSD 1412 of 2009, be dismissed.
3.Judgment on the question of costs be reserved.
Note:Entry of orders is dealt with in Rule 39.32 of the Federal…
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- Coshott v Prentice [2013] FCA 1085
- Case
- [2013] FCA 1085
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CaseChat Overview and Summary
The case of Coshott v Prentice involves an appeal against orders made by the Federal Court of Australia in relation to property interests and bankruptcy proceedings. The primary issue at hand concerns the application for a stay pending appeal filed by the appellant, Fewin Pty Limited, against orders made by Buchanan J on 10 September 2013. The appellant sought to stay the orders made in the Federal Court proceedings which involved the bankruptcy of Robert Coshott and the property at 1 Bunyula Road, Bellevue Hill.
The legal issues before the court were whether an interested party, such as Fewin Pty Limited, could apply for a stay pending appeal and if such an application could be granted to preserve the equitable mortgagee's interest in the property. The court also considered the relevance of any delay in applying for the stay and whether the failure to take measures to protect the interest was a valid reason for granting the stay. The court had to balance the interests of the various parties involved, including the trustee in bankruptcy and the other family members who were beneficiaries of the property.
The court, after careful consideration of the submissions and evidence, dismissed the applications for a stay pending appeal. The court found that there were no exceptional circumstances warranting a stay and that the delay in applying for the stay was not justified. Furthermore, the court noted that the appellant had not taken adequate steps to protect its interest, which was a relevant factor in denying the application for a stay. The court concluded that the interests of justice would be best served by not staying the orders made by the primary judge.
As a result of the court's decision, the interlocutory applications filed by the first appellant and Fewin Pty Limited were dismissed. The matter was listed for further directions, and the question of costs was reserved for later determination. The final orders reflect the court's determination that the stay applications were not meritorious and that the orders made by Buchanan J should remain in effect pending the final resolution of the appeal.
The legal issues before the court were whether an interested party, such as Fewin Pty Limited, could apply for a stay pending appeal and if such an application could be granted to preserve the equitable mortgagee's interest in the property. The court also considered the relevance of any delay in applying for the stay and whether the failure to take measures to protect the interest was a valid reason for granting the stay. The court had to balance the interests of the various parties involved, including the trustee in bankruptcy and the other family members who were beneficiaries of the property.
The court, after careful consideration of the submissions and evidence, dismissed the applications for a stay pending appeal. The court found that there were no exceptional circumstances warranting a stay and that the delay in applying for the stay was not justified. Furthermore, the court noted that the appellant had not taken adequate steps to protect its interest, which was a relevant factor in denying the application for a stay. The court concluded that the interests of justice would be best served by not staying the orders made by the primary judge.
As a result of the court's decision, the interlocutory applications filed by the first appellant and Fewin Pty Limited were dismissed. The matter was listed for further directions, and the question of costs was reserved for later determination. The final orders reflect the court's determination that the stay applications were not meritorious and that the orders made by Buchanan J should remain in effect pending the final resolution of the appeal.
Orders
Orders of the court
1. The interlocutory application filed by the first appellant on 21 October 2013 seeking a stay of orders made on 10 September 2013 in proceeding (P)NSD 1412 of 2009, be dismissed.
2. The interlocutory application filed by Fewin Pty Limited ACN 051 132 453 on 22 October 2013 seeking a stay of orders made on 10 September 2013 in proceeding (P)NSD 1412 of 2009, be dismissed.
3. Judgment on the question of costs be reserved.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
1. The interlocutory application filed by the applicant on 17 October 2013 for a stay of orders made on 10 September 2013 in proceeding (P)NSD 1412 of 2009, be dismissed.
2. Judgment on the question of costs be reserved.
3. The matter be listed for directions before Justice Flick at 9.30 AM on 7 November 2013.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
Finally, upon reserving my judgment on 22 October 2013, I made orders on conditions for a interim stay pending the delivery of my judgment, namely that:“…5.Orders 7, 8 and 9 made by Buchanan J on 10 September 2013 be stayed until judgment on the interlocutory application for a stay filed by the Appellant on 21 October 2013 on the conditions set out in orders 6 to 8 inclusive hereof.6.On or before 9.30 AM on 23 October 2013 the Appellant notify the First Respondent in writing of the full names of all persons in physical occupation of the property at 1 Bunyula Road, Bellevue Hill in the state of New South Wales, being the property that is the subject of these proceedings (‘the Bunyula property’).7.On or before 11.00 AM on 23 October 2013, the Appellant provide evidence of insurance over the Bunyula property together with evidence that the insurance premiums have been paid up to date.8.On or before 5.00 PM on 23 October 2013 the Appellant provide a deposit to secure against any damage to the Bunyula property from the date of this order in the sum of $10,000 which sum is to be paid into the trust account of the solicitors for the Appellant, and is to be held subject to any further order of this Court.…”2. BACKGROUND It is helpful first to expand upon the context in which the orders that are the subject of the stay applications and the appeal were made before dealing in detail with these applications.2.1 The decision in Coshott v Coshott [2013] FCA 907 determined on 10 September 2013 Robert Coshott was made bankrupt on 7 November 2008. He and his wife Ljiljana Coshott were the registered proprietors of the Bunyula property which is and continues to be their family home. Their two sons, Michael and James Coshott, also lived in the Bunyula property. The trustee of Robert Coshott’s bankrupt estate formed the view that the 50% interest held by him in the Bunyula property was an asset to be brought to account in his bankrupt estate. In June 2009, proceedings were instituted in the Supreme Court of New South Wales by James Coshott against his parents seeking a declaration that they held the Bunyula property on trust for the Coshott Family Superannuation Fund (‘the Coshott Super Fund’). ‘Consent orders’ were initially signed in those proceedings that contained the declarations that James Coshott sought. However, the trustee became aware of the consent orders and subsequently sought successfully to have them set aside. The Supreme Court proceedings were then transferred to the Federal Court. In the Federal Court, Ljiljana, Robert and James Coshott sought to establish that Robert Coshott held his 50% interest in the Bunyula property on trust for the benefit of the Coshott Super Fund. In the alternative, they contended that Robert Coshott held his 50% interest pursuant to a resulting trust in favour of the fourth cross-respondent, Schlotzky’s Nominee Company Pty Limited (‘Schlotzky’), on the basis that Schlotzky is (and was at all relevant times) the corporate trustee of the Coshott Super Fund and not Robert Coshott. Fewin was not a party to those proceedings.
Evidence
Evidence Before The Court
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Decision
Reasons for decision
It is helpful first to expand upon the context in which the orders that are the subject of the stay applications and the appeal were made before dealing in detail with these applications.2.1 The decision in Coshott v Coshott [2013] FCA 907 determined on 10 September 2013 Robert Coshott was made bankrupt on 7 November 2008. He and his wife Ljiljana Coshott were the registered proprietors of the Bunyula property which is and continues to be their family home. Their two sons, Michael and James Coshott, also lived in the Bunyula property. The trustee of Robert Coshott’s bankrupt estate formed the view that the 50% interest held by him in the Bunyula property was an asset to be brought to account in his bankrupt estate. In June 2009, proceedings were instituted in the Supreme Court of New South Wales by James Coshott against his parents seeking a declaration that they held the Bunyula property on trust for the Coshott Family Superannuation Fund (‘the Coshott Super Fund’). ‘Consent orders’ were initially signed in those proceedings that contained the declarations that James Coshott sought. However, the trustee became aware of the consent orders and subsequently sought successfully to have them set aside. The Supreme Court proceedings were then transferred to the Federal Court. In the Federal Court, Ljiljana, Robert and James Coshott sought to establish that Robert Coshott held his 50% interest in the Bunyula property on trust for the benefit of the Coshott Super Fund. In the alternative, they contended that Robert Coshott held his 50% interest pursuant to a resulting trust in favour of the fourth cross-respondent, Schlotzky’s Nominee Company Pty Limited (‘Schlotzky’), on the basis that Schlotzky is (and was at all relevant times) the corporate trustee of the Coshott Super Fund and not Robert Coshott. Fewin was not a party to those proceedings. In Coshott v Coshott [2013] FCA 907, the primary judge found that both contentions were without merit and that any suggestion or arrangement tending to suggest that Robert Coshott purchased the 50% interest in the Bunyula property registered in his name, otherwise than in his own interests, was and is a sham. His Honour dismissed the proceedings and made declarations on the cross-claim instituted by Mr Prentice in his capacity as the trustee in bankruptcy against James, Ljiljana and Robert Coshott and Schlotzky (the first, second, third and fourth cross-respondents respectively) that:“3.The property 1 Bunyula Road, Bellevue Hill being the whole of the land contained in Certificate of Title Folio Identifier 2/336490 (‘the property’) was acquired by the second cross-respondent [Ljiljana Coshott] and the third cross-respondent [Robert Coshott, a bankrupt] beneficially as joint tenants.4.Upon the date of bankruptcy of the third cross-respondent, the joint tenancy between the second cross-respondent and the third cross-respondent in the property was severed and the ownership became:4.1the second cross-respondent as to an undivided one half share;4.2the cross-claimant as to an undivided one half share as tenants in common.5.The half interest in the property registered to the third cross-respondent vested in the cross-claimant pursuant to sections 58, 115(1) and 116(1) of the Bankruptcy Act 1966 (Cth), as and from the date of the commencement of the bankruptcy of the third cross-respondent.”
Ratio Decidendi
Legal Principle Established
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