Boschen, Re G.M & Anor Ex Parte The Bankrupt

[1986] FCA 433

Re: GRAEME MARK BOSCHEN and PAMELA ALWYNNE BOSCHEN
Ex Parte: THE BANKRUPT
No. QLD E125 of 1984
Bankruptcy

COURT

IN THE FEDERAL COURT OF AUSTRALIA

GENERAL DIVISION
BANKRUPTCY DISTRICT OF THE SOUTHERN DISTRICT OF THE STATE OF QUEENSLAND
Pincus J.

CATCHWORDS

Bankruptcy - discharge - ordinary case - whether need show cogent grounds - proper test - whether presumption in favour of early discharge.

Bankruptcy Act, 1966 s. 150

HEARING

BRISBANE

#DATE 19:9:1986

ORDER

The applicants be discharged.

NOTE: Settlement and entry of orders is dealt with in Rule 124 of the Bankruptcy Rules.

JUDGE1

This application for discharge is by Mr. and Mrs. Boschen, who became bankrupt on their own petition on 5 March 1984. I have read the report of the Official Receiver, which sets out an account of their financial misfortunes in considerable detail, and heard some oral evidence. It does not seem to me necessary to recount the history set out in the report.

1. The principal features are that the Official Receiver makes no accusation of any sort of misconduct against the applicants, that there will be no dividend and that the debts exceed $200,000. Both the applicants are working, earning fairly modest sums. What has brought about the applications is that Mr. Boschen has been asked to travel overseas in his employment and that has caused some embarrassment, in particular because of what is said to be expected difficulty in getting credit cards.

2. I have decided to grant both applications, but it seems to me that I should say something briefly by way of explanation of the difficulty which I have found in dealing with the matter.

3. The most recent reported decision setting out the principles governing applications for discharge is that in Re Kersten (1986) 65 ALR 372, in which the authorities were extensively reviewed. The essence of that decision, it seems to me, is the adoption, again, of the remarks quoted at p. 378 of the report:
   
   

"In considering whether a bankrupt should receive a discharge it has been laid down repeatedly that the court must have regard not only to the interests of the bankrupt and his creditors but also to the interests of the public and of commercial morality. In the exercise of its discretion the court must also consider the conduct of the bankrupt relevant to his bankruptcy".

1. That guidance seems a little more appropriate to a case other than what might be described as the ordinary one where, as here, a substantial period has elapsed since bankruptcy, no suggestion of misconduct is made, but substantial sums are owing, and there is little or nothing in the way of assets. Should such applicants ordinarily be able to obtain an early discharge or not?

2. I have been inclined to follow and apply the remarks of Woodward J. in Re Maher (1985) 61 ALR 592 at pp 601, 602 in which his Honour said:
   
   

"Although I have stated that I am of the opinion that there is no presumption that a bankrupt should be discharged by effluxion of time under s. 149, it does not follow that every applicant under s. 150 is entitled to a discharge simply by reason of the fact that there is nothing to be said against the granting of that order. The court still must be persuaded to exercise its discretion in favour of the granting of a discharge order. It is for the applicants to persuade it. Whilst I agree with Toohey J. in Re Benda that an applicant need not show 'special circumstances' to succeed, he or she must, in my opinion, show some cogent ground or grounds for the exercise of that discretion in his or her favour. A mere dislike of being bankrupt - a consciousness of the stigma of bankruptcy, attaching to all bankrupts but felt more by some than by others - cannot of itself be enough."

1. Authorities are to be found going back at least to In re Gaskell (1904) 2 KB 478, in which the suggestion that there is a presumption in favour of an early discharge is set out. In that case Vaughan Williams L.J., with whom the other members of the Court of Appeal agreed, said at p. 482:
   
   

". . . the overriding intention of the Legislature in all Bankruptcy Acts is that the debtor on giving up the whole of his property shall be a free man again, able to earn his livelihood, and having the ordinary inducements to industry."

See also per Lord Greene M.R. in Re Smith (1947) 1 All ER 769 at p. 771.

1. I concede that there is rather a fine line between showing special circumstances and showing some cogent ground.

2. Not without doubt, I have concluded that the considerations advanced by Mr. Thompson on behalf of the applicants are sufficient to fulfil the latter test. The order will be that the applicants be discharged.