Shipton Lodge Cobbitty Pty Ltd v Coshott (No.2)

[2008] FMCA 1552

FEDERAL MAGISTRATES COURT OF AUSTRALIA

SHIPTON LODGE COBBITTY PTY LTD v COSHOTT (No.2) [2008] FMCA 1552

BANKRUPTCY – Creditor’s petition – uncontested entitlement to sequestration order – debtor failed to establish ability to pay debts – sequestration order made in absence of debtor.

Bankruptcy Act 1966 (Cth), ss.52, 52(2)(a)

Coshott v Shipton Lodge Cobbitty Pty Ltd [2008] FCAFC 159
Coshott v Shipton Lodge Cobbitty Pty Ltd [2008] FMCA 202
Shipton Lodge Cobbitty Pty Ltd v Coshott [2008] FMCA 1294

Applicant:

SHIPTON LODGE COBBITTY PTY LTD

ACN 071 860 092

Respondent: ROBERT GILBERT COSHOTT

File Number: SYG 590 of 2008

Judgment of: Smith FM

Hearing date: 7 November 2008

Delivered at: Sydney

Delivered on: 7 November 2008

REPRESENTATION

Counsel for the Applicant: Mr M Zreika

Solicitors for the Applicant: Slater & Gordon

Counsel for the Respondent: No appearance by or on behalf of the Respondent

Counsel for Voits Holdings Pty Ltd, ACN 003 048 477, First Supporting Creditor: Mr Darcy

Solicitors for the First Supporting Creditor: Agent for Heckenberg Associates

Counsel for Woollahra Municipal Council, Second Supporting Creditor: Mr S Adair

Solicitors for the Second Supporting Creditor: Deacons

ORDERS

1. A sequestration order be made against the estate of ROBERT GILBERT COSHOTT. 

2. The applicant creditor’s costs, including all reserved costs, be taxed and paid from the estate of the respondent debtor in accordance with the Bankruptcy Act 1966 (Cth).

3. Note that the date of the act of bankruptcy is 15 February 2008. 

4. The applicant must within 2 days give a copy of this order to the Official Receiver in Sydney. 

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SYG 590 of 2008

SHIPTON LODGE COBBITTY PTY LTD

ACN 071 860 092

Applicant

And

ROBERT GILBERT COSHOTT

Respondent

REASONS FOR JUDGMENT

(revised from transcript)

1. This is a petition filed on 12 March 2008, which relies upon the same debt and bankruptcy notice which I considered in Coshott v Shipton Lodge Cobbitty Pty Ltd [2008] FMCA 202. I then dismissed an application to set aside the bankruptcy notice. My orders were upheld by the Full Court in Coshott v Shipton Lodge Cobbitty Pty Ltd [2008] FCAFC 159.

2. The petition was brought on for hearing before me on 2 September 2008, following the Full Court’s judgment. Mr Coshott abandoned all his grounds of opposition to the petition, other than his contention that he was able to pay his debts within the meaning of s.52(2)(a) of the Bankruptcy Act 1966 (Cth). I received affidavit evidence from Mr Coshott and he was cross‑examined in support of that ground.

3. For reasons which I indicated briefly in Shipton Lodge Cobbitty Pty Ltd v Coshott [2008] FMCA 1294, I was not satisfied that he was able to pay his debts, including the debt relied upon by this petitioner, within the reasonable time required by the authorities.

4. However, I was prepared to give Mr Coshott an opportunity to give proof to his optimism that he would be able to raise money to pay the applicant’s debt during a two months adjournment of the petition.  He had argued that he could do this from equity which he shares with his wife in his home, or from his other assets.  In particular, he claimed to be entitled to the proceeds of a “compromise and settlement agreement”, which would produce a payment of $235,000 “within the next 60 days”.  He also claimed that he owned an immediate entitlement to cash deposits held by the Woollahra Municipal Council and a firm of solicitors, totalling $28,000. 

5. To further test these claims and for other reasons which I explained in my judgment, I conditioned adjournment of the petition upon payment of security into Court toward likely future quantified costs orders.  However, my orders in that respect were not complied with, and Mr Coshott has given no explanation to the Court for his failure to lodge security. 

6. Mr Coshott did not attend a listing on 3 October 2008, which was appointed at the request of the applicant creditor.  Due to his absence, and also due to difficulties at that time in finding a hearing date earlier than today, I made no orders altering my previous order which adjourned the petition for hearing today.  There is no doubt, therefore, that Mr Coshott is on notice of the listing today.  He has also been given notice that I have confirmed the listing, in a letter sent to him by the solicitors for the applicant.  

7. On the uncontested evidence I am satisfied that Mr Coshott has committed the act of bankruptcy. I am satisfied that he still owes the debt relied upon in the petition, and I am satisfied as to the other matters required under s.52 and the other provisions of the Bankruptcy Act and Bankruptcy Rules in relation to the making of sequestration orders. Mr Coshott has not persuaded me that he is able to pay his debts, nor that there is any other sufficient cause for not making a sequestration order today.

8. I note that since the last hearing two supporting creditors with substantial debts have made appearances in the Court, and support the making of a sequestration order today.  One of those creditors has brought a separate petition. 

9. In all these circumstances, I consider it appropriate to make a sequestration order today. 

I certify that the preceding nine (9) paragraphs are a true copy of the reasons for judgment of Smith FM

Associate:  Lilian Khaw

Date:  18 November 2008