Re Bastow, P.D. Ex parte Bastow, P.D

[1985] FCA 443

E< PARTE: FETEE DEAN BASTOW

. Applicant

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C m :	TOOHEY J.
24 June 1985

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EX TEMPORE H&% : / ' 1

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A sequestration order was made against Mr. Bastow order W; on 24

January 1984, so that in the ordinary course he would be

discharged from bankruptcy in January 1987. He seeks an order for dlscharge rouuhly l8 months earlier than would be the case if the Bankruptcv Act 1966 took its course.

The hasls of the application lies, Mr. Bastow says, in

the difficulties his position as a bankrupt places in the way of him qettlnq employment. Also there is medlcal evidence provided

bg Dr. Kusel sugqestlng that a discharge from bankruptcy would

red'Jce 5clme uf the stk-ess he has been under. There IS nothing in

the C'fficlai Receiver S report r n stand in the of a discharge, nor have any cred1tnt-E objected other than PIA Seafnnd Exporters.

The bas-rs of that objectrnn ir three fold:

Mr. Bastow, after knowing himself to be insolvent, continued

to trade and obtain credlt of an amount exceeding $100;

He contracted a debt provable in bankruptcy without having at

the time of contracting it any reasonable or probable ground

for expectation of being able to pay it;

Within the SIX months preceding his bankruptcy he gave an undue preference to creditors.

Mr. Orifici says that his client cannot adduce any

evidence of those matters other than the evidence which is to be

found in the record of public examination of Mr. Bastow. It may

be that in a general sense the evidence shows that Mr. Bastow

embarked upon the restaurant huslness without much prospect of

being able to make it a profitable venture. It may be, too, that

he contracted some debts wlthaut much prospect of being able to

pay them. It may also be that in some respects, fairly limited

respects it would appear, he may have given a preference to

creditors by paying some in cash.

These matters to which sub-s.150(6) refers are matters

of some seriousness when they emanate from the Official Receiver's

report. The report itself, by reason of the Act, provides prima facie evidence of statements obtained in it. If it emanates

otherwise, for instance from a creditor, it seems to me there is

an obligation upon the creditor to state with some precision the

rezpects In whlch it is said the Act has been breached or, more

specifically, in whlch sub-s.l5G(E) is said to arise.

I appreciate the position of the credltor in this case in having difficulty in getting that evidence and being compelled to rely upon the record of public examinatlon. Whlle a reasonably convincing case can be made out from that record of some conduct which in a general way falls wlthin sub-s.150(6), I am not

persuaded that the creditor has made good the specific matters

which the subsection requires to be established. At the same

time, sub-s.150(9) gives the Court power to refuse to make an order of discharge, to make an order of discharge, or to make an order and suspend Its operation. There are some unsatisfactory features of the conduct of the business which I think should be reflected In any order for discharge which I make. I am minded to make an order, because on the positive side it may assist Mr. Baatow in respect of employment and his condition generally; on the negative side there seems to be nothing to be gained from the point of view of the creditors in maintaining the bankruptcy. There is, however, an aspect of the commercial morality of the conduct of a business and also the interest of the community in respect of business ventures.

I think I can best reflect that and also give effect to

such evidence as does emerge from the record of public examination

if I grant an order of discharge but suspend it for a period of

three months. That is what I propose to do. There will be an

order of discharge, suspended until 24 September 1985.

I certify that this and the two preceding

pages are a true copy of the Ex Tempore

Reasons for Judgment	herein of his Honour
Mr. Justice Toohey.

Dated: 19 /98(