Kilpatrick, Re D.J.W. Bankrupt, Ex Parte The Summary

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I N

T Y E

F E D E R A L

COTJRT

A U S T R X I A

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GSNERILI,

l 3 I V I S I O N

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BANKRLJPTCY D I S T R I C T O F THE STP-TE OF

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VYCTORIA

!	No. 686 of l984

EX PX?T.TE:

THX BANKRUPT

Respordent

C ~ 3 l X Y

JACKSON

S .

m:	5 PeSruary 1986
PLACE :	MELEOURNE

REASONS FO2 JUDGMENT

On 10th September, 1984, the appllcanc was made

bankrupt on her ohm applicatlon. She now apFlles fcr an order

of discharge under s.150(1) of the Bankruptcy Act 1966.

At the tune when she became bankrupt, the bankrupt's

unsecured credltors smounted In total to $24,433.00.

The

Officlal Receiver has stated In hls report that In hls oplnion

the causes of the bankruptcy

were the fallure of Marvel

Marketlng Pty Ltd, a company wlth whlch she was concerned,

a.?d the personal guarantees given by the bankr-lpt for some of

tne debts of that company.

Marvel Marketlng Pty Ltd was a company whlch was

incorporated C O act as trustee sf the Rllpatrick Family Trust,

the bankrupt and her former husband b e n g the sole dlrectors

of the company at all times after 30th Mar&

1979.

Although the banxrupt performed secretarlal

services

for the conpany, her husban6 was General Yanager and salesman

and the com2ar.y appears to have Seer. cmducted ~n practical

terns by her husband.

The bankrj-lpt's deallngs with the company came to an

end In May, 19el after she separated from htr hLs3and.

consequence of an agreement entersd Into ?ich hia under 5.37

,If the Famlly Law Act,

she had been T l v n an mdemnlty m

respect cf a l l che company debts whlch she had personally

guaranteed.

She expected her former husband to meec che

company debts for which she was personally l l z b l e m d wken he becane a bankrupt, sbe saw no alternatlve >ut to present her

ohm 2etltlon.

Applications under s.150(1) depend very much on thelr

own facts.

In the present case I aa satlsfled that none of

the matters referred to

In s.150(6) of the Act 1 s establlshed

and that there

1 s no purpose whlch m13kt csefuliy be served by

decllning to make an order.

Accordmqly, I make an order of dlscharqe I n respect

of the bankrupt.

I certlfy that thls and r;he

precedlnq pages a r e a trcle copy of the Reasons for Judgment herem of

his Honour Mr Justice Jackson.

CaseChat Overview and Summary

The case of Re D.J.W. Kilpatrick, Ex Parte the Bankrupt involved the bankrupt, D.J.W. Kilpatrick, applying for a discharge under section 150(1) of the Bankruptcy Act 1966. The application was made on 10 September 1984. The Official Receiver had reported that the primary causes of the bankruptcy were the failure of Marvel Marketing Pty Ltd, a company with which the bankrupt was associated, and the personal guarantees given by the bankrupt for some of the debts of that company. The bankrupt had been involved with Marvel Marketing Pty Ltd, which was a trustee for the Kilpatrick Family Trust, with her and her former husband being the sole directors. The bankrupt performed secretarial services for the company, but it was primarily managed by her husband. The bankrupt's dealings with the company ended in May 1984 after her separation from her husband. Under an agreement made under the Family Law Act, the bankrupt had been indemnified in respect of the company debts she had personally guaranteed. She expected her former husband to meet the company debts for which she was personally liable when he became a bankrupt, but as that did not happen, she had no option but to present her own petition.

The legal issues before the court were whether any of the matters referred to in section 150(6) of the Act were established and if there was any purpose that might be served by declining to make an order of discharge. The court was required to consider whether the bankrupt had acted honestly and whether there were any circumstances that would render it unjust to grant a discharge. The court had to weigh the bankrupt's actions against the provisions of the Act and determine whether there was any evidence of misconduct or dishonesty that would warrant refusal of the discharge.

The court found that none of the matters referred to in section 150(6) of the Act were established, and that there was no purpose that might be served by declining to make an order. The court was satisfied that the bankrupt had acted honestly and that there were no circumstances that would render it unjust to grant a discharge. The court noted that the bankrupt had been indemnified for the debts she had personally guaranteed and had expected her former husband to meet those debts when he became a bankrupt. Given the circumstances, the court concluded that it was appropriate to make an order of discharge in respect of the bankrupt. Consequently, the court made an order of discharge in favor of the bankrupt.

Kilpatrick, Re D.J.W. Bankrupt, Ex Parte The

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established