Coshott win could be curtains for Prentice

BPS Recovery partner
and bankruptcy trustee
Max Prentice.

MAX Prentice's grip on the bankrupt estate of Robert Gilbert Coshott may have loosened a tad this week after Federal Court judge Jayne Jagot on Tuesday overturned the decision of her Circuit Court counterpart Rolf Driver on appeal from the bankrupt's brother.

In May Judge Driver ruled on an application by Ronald Michael Coshott and Fewin Pty Ltd seeking confirmation of their status as creditors in the bankrupt's estate and an order compelling Prentice to call a meeting of creditors. In rejecting the application Judge Driver expressed doubts about aspects of the applicants' claim.

"I have a general difficulty with the asserted assignments of debt from Fewin to Mr RM Coshott," Judge Driver said in his judgment of May 29, 2015.

".... there is no reliable evidence of any consideration for those assignments. The evidence advanced by the applicants consists of the minutes of a meeting of Fewin held on 23 August 2013 where it was resolved that $359,487.08 payable by Mr RM Coshott under the deed of assignment of debts from Fewin to Mr RM Coshott be paid by way of repayment by Fewin of moneys allegedly owed by Fewin to Mr RM Coshott, and that the company’s accounting records be adjusted to reflect this. The minutes are signed by Mr RM Coshott," Judge Driver said.

"There is, however, no other evidence of the asserted debt owed by Fewin to Mr RM Coshott . He was called upon to produce the books and records of Fewin for the purposes of these proceedings but nothing material was produced. I infer that such records of the company as may exist would not have assisted him," Judge Driver added.

Joe & Joe solicitor sued for $2.9 million

ONE of the shareholders in beleaguered builder Joe & Joe Developments is suing solicitor Farshad Amirbeaggi for alleged professional negligence, six years after the company was placed into voluntary administration in a bid to resolve a rancorous dispute between its members.

When contacted, Amirbeaggi rejected the basis of the $2.9 million complaint and told SiN his lawyers believe the claim, which was filed in the NSW Supreme Court on February 6, 2015, is statute-barred given the time elapsed. 

If the Court disagrees and allows the matter to proceed, his professional indemnity insurer may in turn launch action against Hall Chadwick partners Blair Pleash and Richard Albarran and possibly their law firm, Etienne Lawyers.

The plaintiffs are Joseph and Dolly Kossaifi, co-owners of Joe & Joe Developments, which has been subject to a deed of company arrangement (DoCA) since March 31, 2009.

In a decision handed down last year by Justice Ashley Black Joe & Joe Developments (Subject to a Deed of Company Arrangement) Pleash and Albarran were found to have acted in a manner prejudicial to Joe & Joe's creditors by failing to adequately monitor the invoicing of Etienne, which had acted for the pair in their capacity as Joe & Joe's deed administrators.

"I am satisfied, for the purposes of s 447E of the Corporations Act, that Messrs Albarran and Pleash have managed the Company's business in a way that is prejudicial to the interests of its creditors or members, or have made an omission that is prejudicial, by reason of their failure to undertake appropriate review of the invoices which they had received from their former solicitors, and thereby to supervise the work undertaken by those former solicitors," Justice Black said at paragraph 184 of his 111 page judgement. 

Black qualified his finding by describing Pleash and Albarran's failure as "significant" but "unintentional". He also made multiple references to the difficulties the deed administrators had had in their dealings with the company's shareholders. The action before Black was initiated in October, 2012 by Joe & Joe's other shareholder, the Elias family.

As part of his judgement Black ordered that Pleash and Albarran produce a Scotts Schedule of the work undertaken by Etienne. Once concluded, their reviewed estimates then have to be admitted, reduced or denied by the Elias and Kossaifi families and their advisors.

The Scott's Schedule is yet to be completed. It will ultimately guide the court on ruling how much relief Joe & Joe's shareholders will be entitled to from as much as $770,000 paid to Etienne. In the meantime, the Kossaifis appear to have decided that Amirbeaggi bears some responsibility for their predicament.