In the matter of an application for discharge from bankruptcy Re Aarons, John Roland Ex Parte Aarons, John Ronald

[1978] FCA 116

1   l

I N THE FEDERAL COURT OF AUSTRALIA )

GENERAL D I V I S I O N )

BANKRUPTCY DISTRICT OF THE STATE OF ) No. NSW 369 of 1 9 7 2

NEW SOUTH WALES AND THE AUSTRALIAN )

TERRITORY CAPITAL )

I n t h e matter of -

THE BANKRUPTCY ACT 1 9 6 6

And l n t he m a t t e r of -

AN APPLICATION FOR DISCHARGE RE -

JonN ROLAND AARONS

E x par te :  John R o l a n d A a r o n s

JUDGE MAKING ORDER: R i l e y J.

DATE OF ORDER:	10 May	1 9 7 8
WHERE	MADE:	Sydney

O R D E R

THE COURT ORDERS THAT:

1. That the appl icat lon s tand o u t of the l i s t genera l ly , t he

bankrupt t o be a t l i b e r t y t o apply f o r i t s restoration

on a date n o t earl ler than 5 A p r i l 1 9 7 9 whlch w i l l permit

h i s g i v i n g no t less than fourteen days not ice t o t h e

2 . C o s t s reserved.

O f f i c i a l R e c e i v e r .

CATCHWORDS

Bankruptcy - Discharge - Appl i ca t ion fo r d i scha rge -

Omission to "keep ... such books ... as s u f f i c i e n t l y d i s c l o s e h i s

b u s i n e s s t r a n s a c t l o n s a n d f i n a n c i a l p o s i t i o n " - Whether

bankrupt ob l iged t o keep books - Whether carrying on bus iness -

Whether cont r ibu ted to bankruptcy by rash specula t ion In

s h a r e s -	Suf f i c i ency of	evidence -	Under tak ing to	make	monthly
c o n t r i b u t i o n s	t o	estate	-	U n d e r t a k i n g n o t d l l i g e n t l y f u l f i l l e d	-

Delay i n f i l l n g s t a t e m e n t o f a f f a i r s - A p p l i c a t i o n f o r d l s c h a r g e

adjourned -	Bankruptcy A c t 1 9 6 6 ,	s s .	150(5),	( 6 ) ( a ) , (e)	(1):
270(1).

*

REASONS FOR JUDGMENT

John Roland Aarons was on 9 August 1 9 7 2 made bankrupt

o n t h e p e t i t i o n o f two c r e d i t o r s . The O f f i c i a l R e c e l v e r 1s

t r u s t e e o f h i s estate. On 16 J u l y 1 9 7 6 he f i l e d a n a p p l l c a t i o n

under S. 150 of the Bankruptcy A c t 1 9 6 6 fo r d i scha rge f rom h l s

bankruptcy. That appl icat ion w a s dismissed on 16 September 1 9 7 6 .

H e has now f i l e d a n o t h e r a p p l i c a t i o n u n d e r S . 150 f o r d i s c h a r g e ,

da t ed 6 February 1978. Each applicatlon has been opposed by t h e

O f f i c i a l Receiver i n o f f i c e a t t h e time.

On t h e h e a r i n g o f t h e p r e s e n t a p p l i c a t i o n o n 5 Apr i l

1978 the Court had before It, as r equ i r ed by S. 150(3) ( b ) , a r e p o r t

o f t h e O f f i c i a l	Receiver	da ted	26	March	1978 which	i n t e r a l i a
r e f e r r e d t o t h e r e p o r t	dated	9	September	1 9 7 6 made	by	t h e

predecessor of the p re sen t Of f i c l a l Rece ive r wh lch was s i m i l a r l y

b e f o r e t h e C o u r t o n t h e h e a r i n g o f t h e b a n k r u p t ' s e a r l i e r

a p p l i c a t i o n . The bankrupt also gave some ev ldence , and ce r t a ln

f a c t s were agreed. The f a c t s r e f e r r e d t o i n t h i s judgment are

. co l l a t ed f rom those sou rces .

Sec t ion 150 p r o v i d e s l n t e r a l i a as fo l lows:

" ( 5 ) The C o u r t s h a l l , i f any of the matters s p e c i f l e d

in t he nex t succeed ing sub - sec t ion 1s e s t a b l i s h e d -

(a) refuse to make an o rde r o f d i scha rge ; o r

(b)	make an order o f d i scha rge bu t suspend t he o p e r a t i o n o f t h e o r d e r a s t h e C o u r t t h i n k s
p r o p e r , e i t h e r u n c o n d i t i o n a l l y o r s u b j e c t t o

c o n d i t i o n s .

( 6 ) The matters upon the e s t ab l i shmen t o f wh ich t he

Court may exercise t h e p o w e r s s p e c i f i e d i n t h e l a s t

p reced ing sub - sec t ion a r e as follows:-

(a) t h a t t h e b a n k r u p t h a s o m i t t e d t o keep and

preserve such books, accounts or r eco rds as

s u f f i c i e n t l y d l s c l o s e h i s b u s i n e s s t r a n s a c t i o n s

a n d f i n a n c i a l p o s i t i o n w i t h i n t h e p e r i o d o f

f ive years immedia te ly p receding the date on

which	he	became	a	bankrupt:
...

(e) tha t t he bankrup t has b rough t on , o r con t r ibu ted

t o , h i s b a n k r u p t c y	by	-
(1)	r a sh or hazardous	specula t ions ;

(ii) u n j u s t l f i a b l e e x t r a v a g a n c e i n l l v i n g ;

( i i i l gambling or wagering; o r

(iv) c u l p a b l e n e g l e c t o f h i s b u s i n e s s a f f a l r s .

(7) Where none of the matters s p e c i f l e d i n t h e l as t

preceding sub-sect ion i s e s t a b l i s h e d , t h e C o u r t may

make an uncondi t iona l o r d e r of d i scha rge . "

The matters on which the Off ic ia l Rece lver relied t o

s u p p o r t h i s o p p o s i t i o n t o t h e g ran t ing of an o rder of d ischarge

may be summarised as being

- t h a t t h e b a n k r u p t f a i l e d t o keep proper books;

- t h a t t h e b a n k r u p t c o n t r i b u t e d t o h l s b a n k r u p t c y by

r a s h s p e c u l a t i o n s ;

- t ha t t he c r ed i to r s have r ece ived d iv ldends amoun t ing

t o on ly 18 .3 c e n t s i n t h e d o l l a r ; a n d t h a t t h e

bankrupt has no t	made	a d e q u a t e c o n t r i b u t i o n s t o h i s
estate.

I s h a l l d e a l w i t h t h o s e matters i n t u r n .

F a i l u r e t o keep books:

The O f f i c i a l R e c e i v e r r e p o r t e d on 9 September 1 9 7 6 :

" 2 0 . The b a n k r u p t a d v i s e d t h a t t h e o n l y r e c o r d s k e p t

by	him	were	banking records whlch had not been
produced	t o t h i s o f f i c e	as	they had been destroyed.

The bankrupt was engaged in p rope r ty and sha re

dealings	wi th	a	view	t o making	p r o f i t s a n d I n
my	opin ion should have kept	a	cash	book	t o r e c o r d

rece ip ts and expendi ture , bank records and

brokers no tes o f sales and purchases to enable a

ready assessment o f h i s	financial	p o s l t l o n t o b e
made a t any time. "

The	O f f i c i a l R e c e i v e r	also	s t a t e d	as	h i s o p i n i o n t h a t t h e b a n k r u p t
had	committed	an	offence under	S .	270(1) ( a ) , and repor ted " the

f o l l o w i n g f a c t p u r s u a n t t o s e c t i o n 150(6) :- (a) t h a t t h e b a n k r u p t

has omi t ted t o keep and preserve such books, accounts or records

as s u f f i c i e n t l y disclose h l s b u s i n e s s t r a n s a c t i o n s a n d f i n a n c i a l

p o s i t i o n w i t h i n t h e p e r i o d o f f i v e y e a r s immediately precedlng

t h e d a t e on which he became a bankrupt" . The r e p o r t 1s evidence

of t h a t f a c t : S . 150(8).

Before be became a bankrupt , M r . Aarons had always been

employed on wages as a law c l e r k . A s s p a r e - t l m e a c t i v l t l e s h e

engaged i n d e a l i n g s i n s h a r e s a n d i n real p rope r ty . A l l t h a t

appears as to h i s d e a l i n g s i n s h a r e s is t h a t t h r e e firms of

s tockbroke r s c l a imed aga ins t h i s estate a t o t a l of $ 8 , 6 4 4 i n

r e s p e c t of s h a r e d e a l i n g s d u r i n g t h e p e r i o d f r o m 1 5 J u l y 1 9 6 8

t o 26 June 1971 , a n d t h a t i n F e b r u a r y 1 9 7 1 he pa id another such f i rm

about $ 4 , 0 0 0 . There were no shares amongs t h l s assets. HIS

d e a l i n g s i n real es ta te conce rned t h ree p rope r t l e s . A s t o t h e

r development s t , it appea r s t ha t he engaged w l th ano the r pe r son i n a

f i

project f rom which, he sald, it was l n t e n d e d t h a t

a f te r an expendi ture of some $1,500 i n 1968 he should emerge with

$ 2 7 , 0 0 0 a n d a n I n t e r e s t i n t h e p r o p e r t y . The o ther person has

had o t h e r i d e a s , a n d a l l t h a t it h a s b e e n p o s s l b l e f o r t h e

bankrupt t o r e c e l v e is $4,000, whlch has been paid to the

O f f i c i a l Receiver. The second property was a home un i t wh lch t he

bankrupt purchased on 2 Apr i l 1970. The purchase money was r a i s e d

on mortgages. The p rope r ty was s o l d by a mortgagee sale on

9 December 1 9 7 2 , and t he re was no surp lus . A t h l r d p r o p e r t y

appa ren t ly cons i s t ed of two seml-detached buildings purchased by

the bankrupt on 1 8 February 1 9 7 1 a lso on mortgage. Its

renovat ion gave	rlse	t o c l a l m s a g a l n s t h i s	estate o f	some	$9,500,
and	on	i t s sale by	the mortgagee on	10 August 1 9 7 2 t h e r e was	a

de f l c i ency .

It is submltted on behalf of the bankrupt (a) t h a t h e

was under no obl igat lon t o keep the books w h i c h t h e O f f i c i a l

Receiver says he should have k e p t , and (b) i f , c o n t r a r y t o t h a t

submission he was unde r t ha t ob l iga t ion , t hen (I) t h e O f f l c i a l

Receiver bears the onus of provlng beyond reasonable doubt that

t he bankrup t was I n b r e a c h o f i t , and (ii) t h e O f f i c i a l R e c e i v e r

has no t d i scha rged t ha t onus . I d o n o t f i n d it necessary t o

consider submission (b) (i) .

Sec t ion 1 5 0 ( 6 ) ( a ) i s set out above . Sec t ion 2 7 0 ( 1 )

p r o v i d e s t h a t a bankrupt who

" ( a ) has not kept such books, accounts and records as

are usua l and p rope r l n any bus iness ca r r i ed on

by him and a s s u f f i c i e n t l y d i s c l o s e h l s b u s i n e s s

t r ansac t ions and f i nanc ia l pos i t i on du rmg any

p e r i o d w h i l e t h e b u s i n e s s	was	b e l n g c a r r i e d	on
w i t h i n t h e p e r i o d	of	f i v e y e a r s	immediately

p r e c e d i n g t h e d a t e on which he became a bankrupt: or

(b) having kept such books, accounts o r r e c o r d s , h a s

not preserved them, "

i s g u i l t y of an o f fence .

Each p r o v i s i o n r e f e r s b o t h to the keeping and t o t h e

p r e s e r v i n g of books accounts and records. Two of the meanings

ascr ibed by the Concise Oxford Dic t ionary , 6 th edn , to the verb

" to keep" a re (a) "malntain (diary, accounts, books) by making

r e q u i s i t e e n t r i e s " a n d ( b ) " r e t a i n p o s s e s s i o n o f , n o t lose o r

des t roy" . I t is clear t h a t it 1s i n t h e former s e n s e t h a t t h e

verb i s used i n b o t h S . 150(6) (a ) and S. 2 7 0 ( 1 ) . What books

a c c o u n t s o r r e c o r d s , t h e n , i s a bankrupt bound t o k e e p , i n t h a t

s ense , and t o p re se rve , so t h a t S . l 5 0 ( 6 ) ( a ) s h a l l n o t a p p l y ?

Predecessors of S . 1 5 0 ( 6 ) (a ) of the Bankruptcy A c t

1966 had, l i k e S . 2 7 0 ( 1 ) and Its predecessor S . 209(g) of t h e

Bankruptcy A c t 1 9 2 4 , r e f e r r ed (w l th minor va r l a t ions o f ve rb iage )

t o the omission to keep such books "as are usua l and proper in

t h e b u s i n e s s c a r r i e d o n by f i n a n c i a l him and a s s u f f i c i e n t l y d i s c l o s e h i s

b u s i n e s s	t r a n s a c t i o n s	a n d	p o s l t i o n " :	see	Bankruptcy
A c t 1883	(Eng.),	S .	28(3 ) ( a ) : Bankruptcy	A c t 1887	(N.S.W.),

S. 38(a) : Bankruptcy A c t 1 9 1 4 (Eng.) , S . 2 6 ( 3 ) (b) : Bankruptcy

A c t 1 9 2 4 ( C t h ) , S. 119 ( 7 ) ( b ) . The words "as are usual and proper

i n t h e b u s i n e s s c a r r i e d on by him and" do not occur in S . 1 5 0 ( 6 ) ( a ) .

I n I n Bankruptcy re Mutton (1887), 19 Q.B.D. 1 0 2 , speaklng of

S. 28 of the A c t 1883 (Eng.), Lord Esher M.R. (wi th

whom Lopes L . J . agreed: a t 1 0 9 ) s a i d ( a t 1 0 6 ) :

"The first thing ment ioned i s the kind of books which he i s

to keep, - such books a s are ' u sua l and p rope r i n t he

b u s i n e s s c a r r i e d o n by him, ' - and the following words

shew t h e manner i n which he i s to keep those books. It

would be o f no use to ins i s t tha t he should keep books

i f he might keep them i n any way he l i ked , and t he re fo re

the s ec t ion goes on t o s a y , ' a n d a s s u f f i c i e n t l y disclose

h i s b u s i n e s s t r a n s a c t i o n s a n d f i n a n c i a l p o s i t l o n . ' I

c a n n o t h e l p t h i n k i n g t h a t a l l these words are jo ined

t o g e t h e r t o d e s c r l b e t h e k i n d of books which he 1s t o k e e p ,

and the manner i n which he i s t o keep them under certain

c l r cums tances . I f he i s engaged i n a b u s m e s s i n which

books	are	u s u a l l y	k e p t of	a	c e r t a l n k lnd ,	he	i s t o
keep those usual	books,	but	he	i s	t o keep	them	so as

' s u f f i c i e n t l y t o d i s c l o s e h i s b u s m e s s t r a n s a c t i o n s

a n d f i n a n c i a l p o s i t i o n . ' It seems t o me t h a t t h e o n l y

reasonable way of reading t h o s e words is, as meaning

h i s f i n a n c i a l p o s i t i o n a s a man o f bus iness . I f you

d i s l o c a t e t h e w o r d s ' f i n a n c i a l p o s i t i o n ' f r o m t h e o t h e r s ,

you would, as I have a l ready sa id , be caus ing a

r e v o l u t i o n i n t h e social l i f e o f E n g l a n d . I t would

come t o t h i s , t h a t e v e r y b o d y i n t h e kingdom must keep

books which w i l l ' s u f f i c i e n t l y d i s c l o s e h i s f i n a n c i a l

p o s i t l o n ' . B e f o r e t h i s s t a t u t e n o o n e e v e r h e a r d of

such a t h i n g , n o r was it even s u g g e s t e d u n t i l now t h a t

a person who i s engaged i n no bus iness a t a l l , t h a t e v e r y

man and woman over twenty-one years of age is t o k e e p

books which w l l l shew h i s o r h e r f l n a n c i a l p o s l t l o n .

I t seems to me t h a t t h i s would be a revolu t ion , and I

cannot	agree	t h a t t h a t	is	the meaning of	the words.
The	s t a t u t e ,	a s	I	have o f t en	s a i d , d e a l s w l t h b u s i n e s s

matters, and w e must give a busmess meaning t o it."

The words "as are usual and p r o p e r i n t h e b u s i n e s s

c a r r i e d on by him and" were s a i d by Matthew J. i n t he Cour t be low

to be " the govern ing descr ip t ion" : (1887) , 1 8 Q.B.D. 615, 617;

and they were so t r e a t e d by Lord Esher M.R. i n t h e p a s s a g e I

have j u s t quo ted f rom h i s ~udgmen t on appea l . Though they are

absent from S. 150(6) ( a ) , I t h i n k L o r d E s h e r ' s i n t e r p r e t a t l o n

of the remaining words of the phrase 1s st i l l v a l i d . I t i s those

words which "descr ibe the kind of books" (e tc . ) which the

bankrupt i s t o keep,	and there has	been no change	i	n	them such
as	to	br ing about the revolu t lon of which	Lord	Esher	spoke.

I n my opinion it is s i g n i f i c a n t t h a t t h e w o r d s are " h i s b u s i n e s s

t r ansac t ions and f i nanc la l pos i t i on" and no t "h i s bus iness

t r a n s a c t i o n s a n d h i s - f i n a n c i a l p o s i t i o n " , a n d t h e y s h o u l d b e r e a d

as mean ing " the t r ansac t ions and f i nanc ia l pos l t l on o f h l s

bus iness" .

I f a man carries on more than one business a t a time

he must keep such books (e tc . ) as s u f f i c i e n t l y d i s c l o s e t h e

t r ansac t ions and f i nanc ia l pos i t i on o f each bus iness . The re i s

n o t h i n g i n S. 150(6) (a ) t o i n v a l l d a t e t h a t p r o p o s l t i o n , a n d it

seems t o be implied for the purposes o f S . 2 7 0 ( 1 ) (a ) by t h e u s e

i n t h a t p r o v i s l o n o f	" a n y b u s m e s s " i n s t e a d o f ,	as	former ly ,
" the bus iness" .

The ques t ion t hen i s whether by engaging in h i s dea l ings

i n s h a r e s and i n real estate t h e b a n k r u p t i n t h e p r e s e n t c a s e

was ca r ry ing on a bus iness or bus inesses as well a s f o l l o w i n g h i s

occupat ion as a l aw c l e rk .

I have stated above a l l t h e e v i d e n c e t h a t a p p e a r s

be fo re me as t o t h o s e d e a l i n g s o f t h e b a n k r u p t . W h e t h e r t h e

s t anda rd o f p roo f r equ i r ed o f t he Of f i c i a l Rece ive r i s proof on

t h e b a l a n c e o f p r o b a b i l i t i e s o r p r o o f b e y o n d r e a s o n a b l e d o u b t , t h a t

e v i d e n c e f a i l s t o s a t l s f y m e t h a t e i t h e r o f t h o s e two a c t i v l t i e s

o f t he bankrup t cons t i t u t ed a bus iness carried on by him. I t

d o e s n o t e s t a b l l s h t h a t a n y t r a n s a c t i o n " w a s undertaken wlth

t h e i n t e n t t h a t it should be t h e flrst o f s e v e r a l t r a n s a c t i o n s ,

t h a t is w i t h t h e i n t e n t o f c a r r y i n g o n t h e b u s i n e s s of which

it is a t r a n s a c t i o n " : I n re G r i f f i n ( 1 8 9 0 ) , 8 Morr. 1, 9 , p e r

Lord Esher land or shares M.R.; o r t h a t t h e r e was any i n t e n t l o n t o buy and sell

f rom time t o tlme: I n re Mutton ( 1 8 8 7 ) , 1 9 Q.B.D.

1 0 2 , 105; or a n y i n t e n t i o n t o make a l i v i n g by d e a l i n g i n l a n d

o r s h a r e s : R e Finlayson ( l 8 9 1 ) , 1 B.C. (N.S.W.) 79.

I n my opin ion the ev idence does no t by any standard

e s t a b l i s h t h a t t h e d e b t o r	was	ca r ry ing on t he bus iness o f
d e a l i n g i n s h a r e s o r i n	real	p r o p e r t y ; a n d t h e r e f o r e t h e m a t t e r

r e f e r r e d t o i n S . 150(6) (a ) i s n o t e s t a b l i s h e d .

Rash s p e c u l a t i o n i n s h a r e s :

The r e l evan t ques t ion unde r S. 150(6 ) (e ) (i) i s whether

it is e s t a b l i s h e d t h a t t h e b a n k r u p t h a s b r o u g h t o n or c o n t r i b u t e d ,

t o h is	bankruptcy	by	r a s h	s p e c u l a t i o n I n	s h a r e s .	I n	Ex	p&te
Brundr i t	( 1 8 6 7 ) , L.R.	3 Ch.	2 6 , Lord	Cairns	L . J .	was	d e a l l n g	w i t h

t h e e q u i v a l e n t o f the "matter" r e f e r r e d t o i n S . 150(6 ) (c ) , namely,

con t r ac t ing deb t s w i thou t r ea sonab le expec ta t ion o f be ing ab le t o

pay them. H i s Lordship said ( a t 27-28) :

"Th i s s ec t ion , be ing a pena l s ec t ion , mus t be cons t rued

s t r i c t l y ; a n d t h e p r a c t i c e of the Court has a lways

been to r equ i r e t he deb t s wh lch a r e a l l eged t o have been

con t r ac t ed w i thou t r ea sonab le expec ta t ion o f be lng ab le t o pay them t o b e s p e c i f i e d , so t h a t t h e C o u r t may

apply i t s mind t o a l l t h e c l r c u m s t a n c e s u n d e r w h l c h

they were con t r ac t ed" .

H i s L o r d s h l p t h e r e s t a t e d a p r i n c i p l e w h i c h i n my

opin ion i s a p p l i c a b l e t o t h e c o n s i d e r a t l o n o f t h e "matter"

r e f e r r e d t o i n S . 150(6 ) (e) (i): cf. R e John Brown & Co. (1906)

22 T.L.R. 2 9 1 , 293, where Mr. R e g i s t r a r L i n k l a t e r so held .

I n t h e p r e s e n t case n e l t h e r t h e t r a n s a c t i o n s a l l e g e d t o

be rash nor the c l rcumstances in which they occur red have been

s p e c i f i e d , so t h a t t h e r e i s no materlal before the Cour t which

enab le s it to determine whether the b a n k r u p t i n f a c t e n g a g e d i n

s p e c u l a t i o n s ,	w h e t h e r ,	i f	so, h i s s p e c u l a t i o n s	were	rash,	and
whether be brought on	o r	c o n t r i b u t e d	t o h ls bankruptcy	by	such

specula t lons . Noth ing more appea r s i n ev idence abou t t he

bankrup t ' s	dea l ings i n sha res t han wha t	I	have a l r eady s t a t ed :
and	t h a t e v i d e n c e	f a l l s	shor t o f p roving by any s tandard the

m a t t e r r e f e r r e d	t o	i n	S .	150(6) ( e ) (l) .
Cont r ibut lons :

A t some time b e f o r e 9 December 1975 the bankrupt had

apparent ly undertaken t o t h e O f f i c i a l R e c e i v e r t o make

c o n t r i b u t i o n s t o h i s es ta te a t a rate whlch does not appear but

which was less than $ 4 0 a month. On 9 December 1975 he undertook

.

t o t h e Off ic ia l Receiver t o make c o n t r l b u t i o n s t o h i s estate a t a

ra te which does not appear but whlch was less than $ 4 0 a month.

On 9 December 1975 he undertook t o t h e O f f l c l a l R e c e i v e r t h a t h e

would cont r ibu te	$ 4 0	a	month,	commencing	on	15 December	1975.
The	r e p o r t o f t h e O f f i c i a l	Receiver	made	on	9	September	1 9 7 6

s t a t e d t h a t h e h a d c o n t r i b u t e d s i n c e h i s b a n k r u p t c y a t o t a l of

$ 2 , 6 8 0 b u t was two months behind i n t h e c o n t r i b u t i o n s d u e u n d e r

h i s most recent under tak ing . In each of the months September,

November and December of 1976 he contributed $40, and then he pald

n o t h i n g u n t i l 23 December 1 9 7 7 when he paid a lump sum of $480

d o l l a r s . The O f f i c i a l R e c e i v e r r e p o r t e d on 2 1 March 1978 t h a t

acco rd ing t o t he unde r t ak ing o f 9 December 1975 $1,080 should have

been paid t h e b a n k r u p t p a i d i n a n o t h e r by then, but that only $920 had been. On 23 March 1978

$100, so t h a t h e was then $ 6 0 i n

arrears on h i s u n d e r t a k i n g .

The bankrupt, by making no payments between December 1976

and December 1 9 7 7 or Between	23	December	1 9 7 7 and	23	March	1 9 7 8 ,
fa i led	t o honour h i s under tak ing	of	9	December	1975	t o make

month ly cont r ibu t ions . In each of those two per iods he had , wi th

t h e l e a v e o f t h e Off ic ia l Receiver , a ho l iday of s l x weeks i n

America. H e e x p l a i n s t h a t as an employee of Ansett Airways he

g o t a d i scoun t on h i s a l r fares, t h a t he was helped by h i s f a t h e r ,

t h a t he had an aunt l lv ing i n America, and t h a t h i s h o l i d a y s cost

him noth ing personal ly . But , he says , he was q u i t e u n a b l e t o make

any con t r ibu t ions du r ing t hose two pe r iods . H e had an income of

$7,000 during the year ended	30	June	1 9 7 6	and	of	$7,500 durlng
the year ended	30 June	1977 ,	and i s now	ea rn ing a	weekly wage	o f
$160 ,	or	58,320 a yea r .	H e i s a	s i n g l e man	wi th no	dependants.
H e w a s pay ing r en t	of	$37 a week	i n J u l y	1976 and of	$42	a week

i n March con t r ibu te any th lng 1 9 7 8 . It i s h a r d t o b e l i e v e t h a t h e w a s u n a b l e t o

a t a l l th roughout the re levant per lods ; and

.

t h e o n l y e x p l a n a t i o n h e o f f e r s o f h l s i n a b i l i t y IS t h a t i n 1977

he had t o pay for a l o t o f d e n t a l work.

Conclusion:

I am l e f t w i t h t h e o p i n i o n t h a t t h e b a n k r u p t h a s n o t t a k e n

h is bankruptcy se r ious ly enough. The O f f i c i a l R e c e i v e r r e p o r t e d

on	9	September	1976	t h a t h e d i d n o t f i l e h i s s t a t e m e n t o f a f f a i r s
un t i l abou t fou r mon ths a f t e r he	was	made	bankrupt ,	and then only

a f t e r committal proceedings had been taken against h im. Further ,

b e i n g i n d e f a u l t i n o b s e r v l n g h i s u n d e r t a k i n g of 9 December 1975

for almost the whole of 1 9 7 7 , he did not p rompt ly and fu l ly in form

t h e O f f i c i a l Receiver o f h l s i n a b i l i t y t o pay and the reasons for

it. (Had he done so, t he Of f i c i a l Rece lve r wou ld have been ab le t o

i n v e s t i g a t e t h e f a c t s a n d , h a d t h e y j u s t i f i e d It, would no doubt

have accepted a mod i f l ca t ion o f t he unde r t ak ing . ) Tha t f a i lu re on

t h e p a r t o f t h e b a n k r u p t , w h i c h came t o l i g h t i n e v i d e n c e b e f o r e

m e , was n o t e x p r e s s l y r e l i e d on by t h e O f f i c i a l Receiver: b u t it i s

p a r t of the conduct of the bankrup t du r ing h l s bankrup tcy , and

c l e a r l y t h e C o u r t i s requ i r ed to cons lde r it.

I t 1s t r u e t h a t i n t h e e n d t h e creditors have not so

f a r s u f f e r e d a p p r e c i a b l y b y t h e b a n k r u p t ’ s lack o f d i l l g e n c e i n

complying wi th h i s under tak ing . On t h e o t h e r h a n d , t h e y c a n a t

p r e s e n t look forward only t o a t o t a l d i v i d e n d o f 1 8 . 3 c e n t s i n t h e

d o l l a r , a n d it is n o t y e t s i x yea r s s ince t he bankrup tcy . The

r easons t he bankrup t gave , i n answer t o ques t ions by t h e

Of f i c i a l Rece ive r , for want ing a discharge are not compel l lng.

They were as fol lows:

“Why do you want a discharge?---I fee l I cannot ge t ahead

a t t h e moment. I c a n n o t s t l c k i n a job where

I cannot get promotion. I a m v i r t u a l l y s t a g n a n t .

I cannot get anywhere a t p r e s e n t . I would l l k e t o

undertake a course. I h a v e t r i e d twlce t o start

s tud ie s and	I	h a v e n o t g o t t h e i n c l i n a t i o n
a t t h e	moment	w i t h t h i s .

Have you been t o l d by your employer that because of

your bankruptcy you cannot get a promotion?---Nr

Does your employer know you are a bankrupt?---I do not

know.

How d o e s t h a t a f f ec t your promotion I f he does no t

know and you have no t t o ld him?---One of t h e main

reasons i s I would have t o t r a n s f e r t o Melbourne

and	I	do n o t f e e l	I	can	do	t h a t w i t h t h l s
hanging	over	my	head.	Our h e a d	o f f i c e	i s i n

Melbourne.

Why do you thlnk being an undischarged bankrupt w i l l

p r even t	you dolng that?--- There	1 s	a	stigma
a t t a c h e d t o it and when	you	a r e I n	a	company
where	competit ion	i s keen,	when people f lnd	o u t
a b o u t t h i s t y p e o f s i t u a t i o n	you	a r e p u t	a t	t h e
bottom of	t h e l i s t for any	promotion.	I	have

appl ied for severa l pos l t ions and been knocked

back on each occasion. There has never been a

r eason g iven a s t o why.

HIS HONOUR: Pos i t ions in Anse t t? - - -Yes .

THE OFFICIAL RECEIVER:  What course of s t u d l e s d id you

contemplate?---Accounting and business management. ‘I

I n my o p i n i o n t h e c o u r s e I should adopt i s I n e f fec t

t o p o s t p o n e d e a l i n g w i t h t h i s a p p l l c a t i o n f o r a y e a r . The

bankrupt has no t been re leased f rom h is under tak ing to cont r ibu te

$40 a month, and i n t h e i n t e r v a l h e w i l l have t he oppor tun l ty o f

demons t r a t lng t ha t he has a p r o p e r a p p r e c i a t i o n o f h i s

r e s p o n s i b l l l t i e s u n d e r it a n d o f h i s d u t i e s a s a bankrupt genera l ly .

That i s n o t t o s a y e i t h e r t h a t f a i l u r e t o comply w i t h t h e

undertaking w i l l n e c e s s a r l l y lead t o a r e f u s a l o f a renewed

a p p l i c a t i o n f o r d l s c h a r g e , o r t h a t c o m p l l a n c e w i t h It w i l l a lone

ensu re t he success o f such an app l l ca t lon . The Court w i l l make

i t s d e c i s i o n I n t h e l i g h t o f a l l t h e c l r c u m s t a n c e s as they then

appear .

I o r d e r t h a t t h e a p p l i c a t l o n s t a n d o u t o f t h e l ist

g e n e r a l l y , t h e b a n k r u p t t o be a t l l b e r t y t o a p p l y f o r i t s

r e s t o r a t i o n on a d a t e n o t earl ler than 5 Apr i l 1 9 7 9 which w l l l

p e r m i t h i s g l v l n g n o t less t h a n f o u r t e e n d a y s n o t l c e t o t h e

Of f i c i a l Rece ive r . Cos t s r e se rved .