Coshott v Prentice (No.2)

[2015] FCCA 1670

FEDERAL CIRCUIT COURT OF AUSTRALIA

COSHOTT & ANOR v PRENTICE (No.2) [2015] FCCA 1670

Catchwords:
COSTS – Competing applications for costs – complex matter – no relevant event which costs would follow – first applicant wholly unsuccessful – second applicant partially successful – respondent seeking the Court’s directions.

Coshott & Anor v Prentice [2015] FCCA 241
Pitman v Pantzer (Trustee of the Bankrupt Estate of Wenkart) (2001) 115 FCR 363; [2011] FCA 1743

First Applicant: RONALD MICHAEL COSHOTT

Second Applicant: FEWIN PTY LIMITED

Respondent: MAXWELL WILLIAM PRENTICE

File Number: SYG 2055 of 2013

Judgment of: Judge Driver

Hearing date: 18 June 2015

Delivered at: Sydney

Delivered on: 18 June 2015

REPRESENTATION

Counsel for the Applicant: Mr A Cheshire

Solicitors for the Applicant: Martin Place Lawyers

Counsel for the Respondent: Mr J T Johnson

Solicitors for the Respondent: O'Neill Partners

ORDERS

1. The Court declares that the Second Applicant is a creditor of the bankrupt estate of Robert Gilbert Coshott entitled to prove to the value of $471,375.67 in respect of:

   (a)$151,799.63 previously owed by the bankrupt to Stephen Barry;

   (b)$5,500.00 previously owed by the bankrupt to Rui Oliviera;

   (c)$61,327.60 previously owed by the bankrupt to Voits Holdings Pty Limited;

   (d)$214,831.76 previously owed by the bankrupt to Shipton Lodge Cobbitty Pty Limited;

   (e)$37,916.68 previously owed by the bankrupt to Principal Strategic Options Pty Limited.

2. Leave is granted to the Second Applicant nunc pro tunc to substitute proofs of debt in respect of the debts set out in order 1 for those lodged by the original creditors.

3. The Court declares that the Second Applicant is not a creditor of the bankrupt estate of Robert Gilbert Coshott in respect of:

   (a)Debts owed to Garry Doyle trading as Double Bay Plumbing;

   (b)B&W Windows Pty Limited.

4. The Court directs that the Respondent admit the Second Applicant as a creditor of the bankrupt estate of Robert Gilbert Coshott as set out in order 1.

5. The Court declares that the Second Applicant is a creditor of the bankrupt estate of Robert Gilbert Coshott entitled to vote to the value of $301,475.55, made up as follows:

   (a)$151,799.63 previously owed by the bankrupt to Stephen Barry;

   (b)$5,500.00 previously owed by the bankrupt to Rui Oliviera;

   (c)$12,265.52 previously owed by the bankrupt to Voits Holdings Pty Limited;

   (d)$106,910.40 previously owed by the bankrupt to Shipton Lodge Cobbitty Pty Limited;

   (e)$25,000.00 previously owed by the bankrupt to Principal Strategic Options Pty Limited.

6. The Court declares that the First Applicant is not a creditor of the bankrupt estate of Robert Gilbert Coshott.

7. There be no order as to costs between the parties but the Respondent is entitled to be indemnified out of the bankrupt estate of Robert Gilbert Coshott for his costs of these proceedings on a solicitor and client basis.

8. The security for costs provided by the Applicants is released and is to be paid to the Applicants’ solicitors together with any accrued interest.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYG 2055 of 2013

RONALD MICHAEL COSHOTT

First Applicant

FEWIN PTY LIMITED

Second Applicant

And

MAXWELL WILLIAM PRENTICE

Respondent

REASONS FOR JUDGMENT

Introduction and background

1. On 29 May 2015 I delivered judgment in the principal proceedings in this matter[1].  The only order I made at that time was an order requiring the parties to forward to my chambers short minutes of order consistent with my reasons within 14 days.  That order was complied with.  The parties have furnished alternative proposed short minutes with submissions in support. 

   [1] Coshott & Anor v Prentice [2015] FCCA 241

2. The parties agree that there was an error at [56] of my principal judgment.  That paragraph refers to the consideration for the assignment from Shipton Lodge Cobbitty Pty Ltd.  The figure of $214,831.76 was the value of the assigned debt for which consideration totalling $106,910.40 was given. 

3. The parties are otherwise in general agreement about the orders that should be made in respect of the assignments.  There is a difference of view in relation to proofs of debt and a dispute as to costs.

Consideration

1. I accept the submissions of counsel for the applicants concerning the appropriate orders to make in respect of the assignments and the lodgement of proofs of debt.  In particular, I accept that where, as here, proofs have previously been submitted (and indeed accepted) in respect of the original debts prior to the assignment, the appropriate course is for an order to be made giving leave to the applicants to substitute their proofs of debt following assignment for those lodged by the original creditors[2].  Since at least some of the proofs of debt have already been lodged by the second applicant (Fewin), I will grant leave nunc pro tunc.

   [2] Pitman v Pantzer (Trustee of the Bankrupt Estate of Wenkart) (2001) 115FCR 363; [2011] FCA 1743 at [36], [37] and [54]

2. As to costs, the first applicant (Mr Coshott) was wholly unsuccessful and Fewin was partially successful.  The respondent (Mr Prentice) sought the Court’s directions and should be indemnified from the bankrupt estate in respect of his costs of the proceedings.  The parties seek orders for costs against each other but I am not persuaded that any costs order as between the parties should be made.  No party has been wholly successful and I do not accept that there is any relevant “event” which costs would follow.  The matter was complex and that complexity was reflected in the order I made in the principal proceedings requiring the parties to submit proposed short minutes.  Although Mr Coshott was wholly unsuccessful, he is the controlling mind of Fewin, which was partially successful. 

Conclusion

1. I will make the orders sought by the applicants save for their proposed order 7.  I will in lieu thereof order that there be no order as to costs between the parties but Mr Prentice is entitled to be indemnified out of the bankrupt estate for his costs.

I certify that the preceding six (6) paragraphs are a true copy of the reasons for judgment of Judge Driver

Associate: 

Date:  18 June 2015