FEDERAL COURT OF AUSTRALIA

Coshott v Coshott (No 2) [2010] FCA 819

THE COURT ORDERS THAT:

1.                  Pursuant to s 601AH(2) of the Corporations Act 2001 the registration of Schlotzsky’s Nominee Company Pty Limited (A.C.N. 083 330 189) be reinstated.

2.                  Leave be granted to the cross claimant to join Schlotzsky's Nominee Company Pty Limited as fourth cross respondent to be first cross claim.

3.                  The cross claimant file and serve an amended first cross claim in the form attached to the notice of motion filed 4 June 2010 on or before 6 August 2010, such service on the fourth cross respondent to be effected by service at its registered office and by service upon the second applicant.

4.                  Orders that the costs of the notice of motion filed 4 June 2010 and/or thrown away by the amendment be paid by the cross claimant.

5.                  The applicants and first respondent produce at the Registry original discovered documents for inspection by the second respondent and his solicitor and Counsel, such inspection to occur by 11 August 2010.

6.                  The applicants and the first respondent to inspect the second respondent’s discovered documents by 11 August 2010 by arrangement with his solicitors at the office of Sally Nash & Co or if preferred, the Court.

7.                  The respondents to the amended cross appeal file and serve any defences on or before 20 August 2010.

8.                  The applicants, first respondent and the fourth respondent serve an outline of the evidence of each witness proposed to be called and identify each of the documents they propose to tender on or before 3 September 2010.

9.                  The second respondent serve an outline of the evidence of each witness he proposes to call and identify each of the documents he proposes to tender on or before 17 September 2010.

10.              The first respondent, the fourth respondent and the applicants serve an outline of the evidence of each witness they propose to call in reply and identify any further documents they propose to tender on or before 29 September 2010.

11.               Directions for 3 September 2010 be vacated.

12.              The matter be stood over for directions on 1 October 2010.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.

REASONS FOR JUDGMENT

(REVISED FROM THE TRANSCRIPT)

1                     This is an application to reinstate the registration of a company.  Robert Coshott is the third cross-respondent to a proposed amended first cross-claim filed by his trustee in bankruptcy, John Burke.  Mr Coshott became bankrupt on the making of a sequestration order on 7 November 2008.  Mr Burke became the trustee of his property as a bankrupt on 18 December 2008.  Mr Burke wishes to amend his current cross-claim to join a company of which the bankrupt was a director, prior to its deregistration on 14 January 2007.  That company was Schlotzsky’s Nominee Company Pty Limited.

2                     In January 2007 Schlotzsky’s was deregistered, pursuant to s 601AB of the Corporations Act 2001 (Cth).  The present application has been brought by Mr Burke under s 601AH(2) of the Act, so that he can, among other things, challenge, pursuant to ss 120 and 121 of the Bankruptcy Act 1966 (Cth), the disposition made by the bankrupt to Schlotzsky’s of money paid to him from the estate of his late mother.  There may be an issue, foreshadowed in the proposed amendment, as to whether the money was paid to Schlotzsky’s in its personal capacity, in its capacity as trustee of the Coshott superannuation fund, the Coshott family superannuation fund, or in some other capacity (each of which may have been controlled wholly or partly by the bankrupt at the time).

3                     The Australian Securities and Investments Commission refused Mr Burke’s application to reinstate Schlotzsky’s on 27 April 2010.  In a letter to Mr Burke’s solicitors dated 18 June 2010 the Commission asserted that it required an office holder be appointed to a reinstated company.  It asked the solicitors to notify the most recently qualified director, Ljiljana Coshott, whether she agreed to be reappointed, and that if she did, to obtain a consent to act as a director.  Mrs Coshott is the second applicant in these proceedings, and the wife of the bankrupt.

4                     The Commission had no authority to make any such requirement.  It ignored s 601AH(5) of the Act, which, among other things, provides:

“If a company is reinstated the company is taken to have continued in existence, as if it had not been deregistered.  A person who was the director of the company immediately before deregistration becomes a director again, as from the time when ASIC, or the court reinstates the company.”

5                     It is plain, beyond argument, that by force of s 601AH(5) an order of reinstatement by the Court will have the effect of causing Mrs Coshott to become a director automatically.  It is irrelevant and unnecessary whether she consents to be so.  The Commission should not make requirements contrary to the provisions of an Act of the Parliament in what, I assume, is a standard-form letter that it sends to persons whom it has forced to make applications to the Court, when its decisions on the question of reinstatement have not been accepted by them.  Mrs Coshott is also the only member of Schlotzsky’s.  She holds its one issued share, although the ASIC current and historical extract, as at 2 June 2010, indicated that she did not hold the share beneficially.  There is no indication for whom she may hold the share.

6                     I am satisfied by the evidence in the affidavit of Mr Burke, sworn 23 June 2010, that it is just to make an order that Schlotzsky’s registration be reinstated, pursuant to s 601AH(2)(b) of the Corporations Act, and I will make such an order.

Associate:

Dated:         4 August 2010