Lovelock, Re S.J. & Anor Bankrupts, Ex Parte The

[1988] FCA 587

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IN THE FEDERAL COURT	OF AUSTRALIA	1
GENERAL	DIVISION	) E885 QLD Of 1986

BANKRUPTCY DISTRICT OF THE SOUTHERN	)
DISTRICT OF THE STATE	OF QUEENSLAND

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RE:	STEPHEN JOHN LOVELOCK and
HENREIKE GERADA  PlARIA LOVELOCK

EX PARTE: THE BANKRUPTS

MINUTES OF ORDER

MAKING JUDGE ORDER: PINCUS J.

ORDER:  DATE OF 19 SEPTEMBER 1988

WHERE MADE:  BRISBANE

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THE COURT ORDERS THAT:

1. the bankrupts be and they hereby are discharged

from their bankruptcy.

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NOTE :  Settlement and entry of orders is dealt with in

- Rule 124 of the Bankruptcy Rules.

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IN THE FEDERAL COURT OF AUSTRALIA )

GENERAL DIVISION . . ) QLD E885 Of 1986

BANKRUPTCY DISTRICT OF	THE SOUTHERN
DISTRICT OF THE STATE	OF QUEENSLAND

RE:  STEPHEN JOHN LOVELOCK and
HENREIKE GERADA NARIA LOVELOCK

EX PARTE: THE BANKRUPTS

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PINCUS J. 19 September 1988

EX TEMPORE REASONS FOR JUDGMENT

These applications for discharge from bankruptcy relate

to two persons, husband and	wife, who became bankrupt on their own
petition on 2 October 1986, somewhat less than two years ago.	The
evidence is that there are three creditors, Mr	P.J. Kelly who has
appeared today by Mr	Percy, Mr S.J. Lovelock, and a Mr Jurd.

The cause of the bankruptcy is said to be the failure of

a restaurant business in Sydney which the two bankrupts opened in

1981.   The major creditor, Mr Kelly, is said In the affidavit to

have had a dual role; that is, he was the owner of the shopping

complex in which the restaurant was situated and he was also a ,

guarantor of debts incurred by the bankrupts	in relation to the
setting up of that business.

The business was a failure and there is nothing in the

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materlal to suggest that that was the fault of the bankrupts

except in the'sense, of course, that they must have made some

error, whether in selection of site or otherwise, to produce the result which ensued. However, it is a matter of common knowledge that many restaurants fail and it is by no means unusual to find

the failure resultlng in a bankruptcy as it has here.

The report of the trustee, Mr Adsett, says that there

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has been a proof of the debt from Mr Kelly in the sum of

$56,617.93.	The other creditors have not lodged proofs and there
is no money in either estate from which	a dividend might be paid.

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M r Percy has informed me that Mr Kelly claims that the sum due to

him is in fact of the order of $90,000, there having been another

$40,000 lost. The period which has elapsed, namely about two

years, is such as to enable one to say that there has been a

substantial time durlng which the bankrupts have suffered the

disabllities attaching to that status.

The matter which has concerned me somewhat is the

position of Mr Kelly. There is an affidavit by Mr R.I.C. Hirst,

the managing director of a company called Tucker and Co. Australia

Proprietary Limited, which I have read, which explains that Mr

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S.J. Lovelock, the male bankrupt, now has a good position with I.

good prospects which will be improved, or may well be improved, if

the applications are granted.

The law, as I understand it, is that it is necessary to

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show some good reason to found the jurisdiction to order a !

premature discharge. Even when	a good reason is shown, however,
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there is still a discretion to refuse a discharge, if in the

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circumstances that seems to be the proper course. Here it appears

to be plain enough that there is a good reason for a discharge,

i	namely the circumstances as set out in the affidavit of Mr Hirst, those matters not being challenged. It remains to be considered,
l	however, whether the objection by IsIr Percy on behalf of Hr Kelly
l	should be acceded to.

The purposes of doing so would be two-fold. One is, so

l	to	speak,	to	let	the	ordinary	penalty	for	business	failure	I-.
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operate; secondly, and more importantly perhaps, to increase the	I ..
pressure upon Mr S.J.	Lovelock, in particular, to try to produce

some money for n r Kelly. I have, in the end, determined that I

should not give effect to those considerations.

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I think it is right to say, as Mr Templeton has argued,

that the mere fact that a creditor or credrtors will be unpaid is

not in itself a reason to refuse the discharge. It is, of course, !

a necessary consequence of there berng a bankruptcy that the

remedy which would otherwise be available against the bankrupt is

at an end and that the creditors' access is only to the assets in

the estate, which here are nil. It seems to me that the proper

course is to order a discharge in each case and it will be	so	I ..
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ordered. i certify that this and the ,& preceding

pages are a true copy of the reasons for

judgment hcrein	of	HIS Honour
Mr. Justice	Pincus	e-+>

l Associate