Re Byrom, M.J. v Ex parte Byrom, M.J

[1989] FCA 390

NOT FOR DISTRIBUTION	JUDGPJENT NO. 3.?0. ..I.-=
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IN THE FEDERAL COURT
OF AUSTRALIA
GENERAL DIVISION
BANKRUPTCY DISTRICT
OF THE STATE OF

WESTERN AUSTRALIA No. 754 of 1987
RE: MICHAEL JOHN BYROM

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Bankrupt

EX PARTE: MICHAEL JOHN BYROM

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Applicant .. \

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CORAM :  FRENCH J.
10 JULY 1989

EX TEMPORE REASONS FOR JUDGMENT / . .

Thls is an application by Mlchael John BY^

approval of a composition and for annulment of his bankruptcy.

Mr Byrom became a bankrupt on 19 October 1987. His statement of affairs showed assets totalling $7,350 and liabilities of $64,083. Four proofs of debt have been admitted in the estate for $62,204. There have been no asset realisations. The background to the bankruptcy as set out in the Offlcial Trustee's report, which is not contested in any respect, is that in April 1979 the bankrupt was a CO-director with a Ms.K.J. Pin1

of a company called Plnrom Nomlnees Pty Ltd whose buslness was the buying and selling of gold futures on the Stock Exchange. The company, after some claimed inltlal success, began incurring losses and ceased trading in 1983. In 1985 its registration was cancelled. A c l a m was made against Mr Byrom by Ms. Plni for $15,000 in respect of moneys allegedly due to her from the conduct

Glendalough which he had purchased in 1976 for $30,000. That	of that business and a caveat was lodged over a property in
property was sold in 1986 for some $79,000 out of which Mr Byrom says he received $63,000. According to the Trustee, it is not clear how this money was expended, however there were claims of payment of a fine of $25,000 and $12,500 to Ms. Pini together with a deposit on a property at Leeder Street In Glendalough.
Between 1983 and 1987 Byrom says he was mainly unemployed except for a 2 year perlod. In 1983 to 1984 he worked as disc jockey at Gobbles Nlght Club. In mld 1987 he went to Queensland in search of work but returned to Perth in August of that year. In August 1987 he received an income tax assessment for $58,353 and being unable to pay that debt flled hls debtors petition. Subsequent to his bankruptcy, Mr Byrom returned to Queensland and apart from some part-tlme work as a disc jockey has been principally unemployed slnce that time.
On 29 December 1988 he lodged a composition proposal in which he, in effect, offered to pay the sum of $9,400 which would be provlded by hls father, John Edward Byrom. That sum represents his one third Interest in a property at 42/16 Leeder Street, Glendalough, an interest which the Trustee says it has been impossible to sell to other CO-owners or other partles.
In a notlce which convened a meeting of creditors on 14 March 1989, the Offlclal Trustee reported on the proposal for composltlon and said that the terms of the bankrupt's proposal were, in his opinlon, calculated to benefit the general body of creditors. The sum of $9,400 belng offered as a composition together with funds presently in hand, which would seem to have been nil, was sufficient to pay approximately 11 cents in the dollar. The Official Trustee's report indicates that there has been no conduct on the part of the bankrupt either prior to or since the date of bankruptcy which has been other than satisfactory and he accepts the bankrupt's explanatlon of the cause of bankruptcy as unemployment and inab~lity to pay a substantial income tax assessment.
I must say that the history of some of the transactions In 1986 and the dispositlon of the proceeds of sale of the property don't quite gel, but they have little or no bearing upon the position that has arlsen as at the time of bankruptcy in 1987
and the questions that now arise for determinat~on on the approval
of this composition. It is qulte evident from the Officlal
Trustee's report that the cred~tors have no prospect of obtaining any return other than through the medlum of the proposed composition and in those circumstances and having regard to their approval of it, I propose also to approve the composition.
The annulment of bankruptcy does not automatically follow approval of the composition. It is a matter which gives rise to questions of public Interest and commercial morality. Nr
Byrom is presently unemployed and has been so for the past 18
months. He is seeking employment in either the sales or entertainment industries and has, it would seem, no Intention of commencing a business on his own account and in any event lacks the means to do so. In the c~rcumstances, I am not satisfied that any element of public interest or commercial morality would be served by refusing annulment in this case and I will declare that the bankruptcy be annulled.

I will order:

1. The composition be approved.

2. The bankruptcy be annulled.

I certify that this and the preceding
three (3) pages are a true copy of the
Ex Tempore Reasons for Judgment of hls

Honour Justice French.

Date:  /Q/ 7 /V

Counsel for the Bankrupt: Miss S.L. Howell

Solicitors for the Bankrupt: Phillips Fox

Mr R. Thornpson appeared on behalf of the Official Trustee

Date of Hearing: 10 July 1989

Date of Judgment: 10 July 1989