Re Cummins, R.G. & L.J. v Ex parte Cummins, R.G. & L.J

[1989] FCA 391

IN THE FEDERAL COURT	)
OF AUSTRALIA	)
GENERAL DIVISION	)

BANKRUPTCY DISTRICT 1

OF THE STATE OF	)
WESTERN AUSTRALIA	) NO. 127 of 1988

RE: ROBERT GORDON CUMMINS and

LAUREL JUNE CUMMINS

Bankrupts

EX PARTE: ROBERT GORDON CUMMINS and

LAUREL JUNE CUMMINS

Applicants

CORAM:  FRENCH J.
10 July 1989

EX TEMPORE REASONS FOR JUDGMENT

These applications for early discharge from bankruptcy are brought by Robert Gordon Cummlns and his wife, Laurel June Cummins, who became bankrupt on 19 February 1988. The statement of assets and llabllities and financial affairs generally put this in the class of a small bankruptcy. The total assets in the ~olnt

estate comprise some $950. There are no assets in the separate estates. Liabilities disclosed in the statement of affairs in the joint estate came to $8,744. The Offlclal Trustee's report indicates that the estimated value of unrealised assets is nil. Proofs of debt have not been called for as it appears from the ~nformatlon available that no dlvldend would be pald in either estate. Two were however lodged by Australian Guarantee Corporation in the joint estate totalling $6,886 in relatlon to a continuous credlt arrangement and the shortfall incurred-qfter the

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sale of a motor vehlcle. There being no funds in the estate those
clalms have not been considered for admission.

At the date upon whlch they became bankrupts, Mr and Mrs Cummins had one dependent child. They have had another child since then. That child is now some 11 months old. At the time of the bankruptcy Mr Cummlns was 22 years of age, was employed as a casual labourer with the Dardanup Shlre Councll and earned an average of $306 per week. Mrs Cummins 1s aged 29, was engaged in home duties with no additional income. They then paid $90 per week rental accommodation.

According to Mr Cummins, in the five years prlor to

bankruptcy he had held a varlety of jobs. For 6 months in 1983
he worked as a television operator with Mid Western Television.
He was unemployed for about 4 months, then secured employment as a
courier in Perth. There he worked for 9 months until January 1985
when he started employment with the Golden West Network as a
television operator in Bunbury but after 18 months that lob
flnished and he became unemployed for a further 6. In January
1987 he was employed as the hostel manager for Calvary Welfare in

Bunbury. He left that employment in July of the same year.	He
was thereafter unemployed for several months before working as a

store manager at a fast food outlet in Bunbury. In February 1988 he started the job as a casual labourer with the Dardanup Shire. He and hls wife also nominally started a business to be called "Capstone Family Video Store" in August 1988 but never traded. In 1986 Mr and Mrs Cummins had purchased a Nissan Bluebird motor vehicle for some $7,400 under a hire purchase agreement with Esanda Finance. The repayments then were $350 per month. At that time Mr Cummins was earning about $320 per week as a television operator and they were able to meet their financial commitments. when he lost his employment in July 1986, they began to experience financial difflcultles. MrS Cummins says she made an arrangement with Esanda to have car repayments reduced to $200 per month in January 1987. After several months however, Esanda lnsisted on full repayments and these they were unable to meet. The vehicle was repossessed in July 1987. They subsequently received a claim for about $6,000 after sale deficlt, but having no means to repay the debt, they filed debtors' petitions in February 1988.

The Trustee's report lndlcates that Mr Cummlns ceased employment with Dardanup Shire In May 1988 and was unemployed for 2 months before being employed as a compiler for the Mornlng Star newspaper in Bunbury where he worked for 4 months until December. They operated a lunch bar business in Kulin, but it was only open for about a month. The Cummlns claim they only required $500 to supply initial stock for the business which was to be operated in a bullding that had been lying empty for some tlme and whlch they had rented from a Mr Macchla. They thought sales from the inltial purchases of stock would be sufficient to fund further purchases.	They had intended to register the business as "R.G. and L.J.	Cummins trading as 'Our Place Cafe'". They never got round to
this because the business dld not operate for long enough. Nor did they pay any rent as the lease was not signed. The buslness did not incur any debts.
Mr Cummins was then unemployed for a further 2 months and in March this year he enrolled as a full time student at the Carine Technical College studylng for a diploma in electrical engineering. In his capacity as a student, he is currently in receipt of the Austudy allowance and that is the sole source of the family income. Mrs Cummins has been engaged in home dutles. Mr Cummins has, ln the meantime, sought to enlist in both the Australian Regular Army and more recently, the Royal Australian Air Force. The latter application shows some sign of success. He has undergone preliminary tests and medicals and subject to the success of this application, will go back for a final interview shortly. He Indicates in his application that he was told that he could not become enllsted whlle s t ~ l l an undischarged bankrupt. The Officlal Trustee has made his own enquiries in thls regard and while it is not the case that bankruptcy is an absolute bar to enlistment in the Services, he has been Informed that it is a significant obstacle and that the Air Force doesn't usually accept persons who are still undlscharged bankrupts. So there is some independent support for Mr Cummins' contention in this regard.
The Official Trustee's report indicates that, as appears from the facts already reclted, excessive use of credit facilities would seem to be the major cause of bankruptcy, wlth unemployment
as a contributing factor. There have been no offences proved to
have been committed by either Mr or Mrs Cummlns nor is there any suggestion that their conduct prlor to or since the date of bankruptcy should be considered unsatisfactory. There has been no opposition to the applications for discharge.
The question of early discharge from bankruptcy prior to the expiry of the statutory minimum of three years provlded by s.149 of the Bankruptcy Act 1966 is a matter whlch is never dealt with lightly by the Court. Becoming a bankrupt is a serious matter. Discharge from bankruptcy is not a light matter. The interests of creditors, the public interest and the interests of commercial morality have to be considered. In this case it is quite plain that the interests of the creditors will not be served in the least by the continuance of the bankruptcy. There is no prospect of any recovery of any assets from the bankrupts nor that In the lmmedlate future, given their present sltuatlon, they wlll be able to earn sufflcient Income or acqulre sufflcient funds to make any worthwhile contribution to their estate. Whllst the hlstory is one of misfortune and perhaps, as is so often the case, disorganisatlon in financial arrangements together wlth bad luck or intervening events in relatlon to continuity of employment, there 1s nothlng in the papers to suggest that the public lnterest or questions of commercial morallty arlse in a way that would require me to refuse discharge of the bankruptcy. In the circumstances, I am satisfied that it is appropriate for orders to be made that the bankruptcies should, in each case, be discharged and I wlll so order.

I certify that the preceding

five (5) pages are a true copy of the
EX Tempore Reasons for Judgment of his

Honour Justice French.

Date:  1 D/ 7 / ~

Mr and Mrs Cummins appeared in person.

Mr R. Thompson appeared on behalf of the Official Recelver

Date of Hearing:  10 July 1989

Date of Judgment: 10 July 1989