Re Dudley, T.F. Preston

THE FEDERAL COURT

)

NOT F O R GENERAL DISTRIBUTION

OF AUSTRALIA

)

GENERAL

DIVISION

)

BANKRUPTCY

DISTRICT

)

OF THE

STATF

)

WESTERN

AUSTRALIA

)

No. 523 of 1985

RE: DUDLEY THOMAS FORDE PRFSTON

Bankrupt

EX PARTE: DUDLEY TIIOMAS FORDF

PRESTON

Applicant

MINUTE OF ORDER

JUDGE

MAKING

ORDER:

FRENCH

DATE OF ORDER:	22 JUNE 1987
WHERE MADE:	Perth

THE COURT ORDERS

THAT:

That

the

bankrupt

dlscharged

from

bankruptcy,

the

discharge to be suspended	until 23 September 1987, on
the following condition.

The condltlon

1 s that the bankrupt undertake to the

court not to carry on buslness as

partner ln any

partnership or as a director of any company OK otherwise

on hls own account until

12 March 1988; provlded that

thls undertaklng does not prevent the bankrupt from

engaglng in casual manual labour.

Note : Settlement and entry of orders 1s dealt wlth in

Rule 124 of the Bankruptcy Rules.

, -

..- ,

IN THE FEDERAL COURT	NOT FOR GENERAL DISTRIBUTION
OF AUSTRALIA
GENERAL DIVISION
BANKRUPTCY DISTRICT
OF THE STATE OF
WESTERN AUSTRALIA	KO. 523 of 1985
RE: DUDLEY THOMAS FORDE PRESTOX

Bankrupt

PARTE:	EX	DUDLEY	THOMAS	F O R W
PRESTON

Applicant

CORAM:

FRENCH

22 JUNE 1987

EX TEMPORE REASONS FOR JUDGMENT

On 11

March

1985

Dudley

Thomas

Forde

Preston,

pensloner of Stone Crescent, Darlington,	filed his own petitlon In
bankruptcy and thereby became a bankrupt.

At the date of hls bankruptcy he was a divorcee, aged 76

years with no dependants. He was in recelpt

of an old age penslon

of $213.00 per fortnlght and out of that he pald rental of $75.00

a week for his residence.

He had been

involved In real estate

for some 17 years

prior to the date of

bankruptcy.

The trustee's report discloses that his involvement was

principally as the director o f two companies, Preston Leonard

Nominees Pty Ltd and Whit Pty Ltd. The companies were involved In

the development, subd~vlsion	and sale of €armlets in the Russelton
area.

2 .

W i t h o u t

q o i n g

l n t o

d e t a i l ,

t h e

c o n 7 a n y

h h i t

P t y

L t d ,

w h i c h

P r e s t o n

w a s

d i r e c t o r ,

t o q e t h e r

w i t h

one

R o b e r t

N l c h o v l c h ,

e m b a r k e d

u p o n

subdivision

o r a b o u t

1 9 8 0

w h l c h

was

u n s u c c e s s f u l

f o l l o w l n q

u p o n

b a d

p u b l l c l t y

a n d

p o o r

s a l e s .

I n

N o v e m b e r

1 9 8 2

t h e

c o m p a n y

p u r c h a s e d

r e t a l l

f u r n i t u r e

b u s i n e s s

€or

$ 5 5 , 0 0 0 . 0 0 .

I n

r e l a t i o n

t o

t h a t

p u r c h a s e

P r e s t o n

a n d

h 1 s

d a u q h t e r

q a v e

p e r s o n a l

g u a r a n t e e s

i n

resDect

o f

d e b t s

o f

some

S10,OOO.OO

owed

t h e

v e n d o r s .

Pres ton

s a y s

t h a t

t h e

t u r n o v e r

t h e

b u s i n e s s

was

m i s r e p r e s e n t e d

t o

h i m .

S h o r t l y

p r l o r

t o a c q u i s i t i o n

t h e b u s i n e s s o n

11 March

1 9 8 3 ,

P t y

L t d

so ld

i t s

i n t e r e s t

t o

Els te r

P t y

L t d ,

a n o t h e r

company

wh ich

P r e s t o n was

d i r ec to r .

A f t e r

s e t t l e m e n t

f o u n d

h e

t h a t

h a v i n g

m a n a g e d

t h e

b u s i n e s s

f o r

s h o r t

p e r i o d ,

i t

r a n

down

s i g n i f i c a n t l y

a n d

t h a t

w e e k l y

t u r n o v e r

r e p r e s e n t e d

t o

h a v e

b e e n

$ 4 , 2 5 0 . 0 0

was

I n

f a c t

o n l y

a r o u n d

$ 2 , 0 0 0 . 0 0 .

A s

r e s u l t ,

t h e

b u s i n e s s

was

sold

a f t e r

o n l y

two

m o n t h s

t o

c r e d i t o r ,

T.V.

D a v l d s o n

P t y

L t d ,

f o r

$ 1 3 , 0 7 0 .OO.

T h e

p e r s o n a l

g u a r a n t e e

g i v e n

b y

P r e s t o n

was

s a t i s f i e d a t t h a t time

was,

f o r l a c k of

f u n d s ,

u n a b l e

t o

c o n t i n u e

w i t h

l e g a l

p r o c e e d l n g s

w h l c h

were

i s s u e d

o n

b e h a l f

t h e two

c o m p a n i e s ,

b y

P r e s t o n

a n d

h i s

d a u g h t e r ,

a g a l n s t

t h e

v e n d o r s

t h e

b u s i n e s s

and

t h e i r

a g e n t s .

3 .

Since the sale

the buslness

b ! ~ -

Preston ha5 been

malnly unemployed except

f o r a

Derlod when he obtalned part-tlme

work as a real estate salesman.

As a result of that unemployment a number of hls assets

were repossessed lncludlng

photocopler and two motor vchlcles;

26 acres of property were sold by a mortgagee at Ralvldls pursuant

to the mortgagee's sale.

'Ihls property had been acqulred In 19El.

In the event, he was unable to meet the demands

of hls

creditors and flled hls debtor's petltlon.

In the statement

o €

affairs he dlsclosed liabilities

totalling some $80,497,00: of thls sum $49,800,00	was said to have
been a personal Income tax liability.

the

event, 1t appears that thls was

slgnlflcant

over-estimate of hls llablllty posltlon as only some

$22,000.00

that amount was owed

h m personally, the balance beinq Income

tax due by the chlldren, beneflclarles under

a trust distribution.

Proofs of debt totalled some

$25,073.00.

Reallzations

have been nil and there are no unrealised assets.

No	funds have been received ln the estate and the

official fees have not been pald.

A dlvldend has not been pald In

the estate and there will	be no surplus avallable for distrlbutlon
to him.

4 .

T h e

o f f l c i a l

t r u s t e e ,

h i s r e p o r t ,

i n d i c a t e s

t h a t

s l n c e

b a n k r u p t c y

Elr

P r e s t o n ' s

c i r c u m s t a n c e s

h a v e

n o t

c h a n g e 6

a n d

h e

1s s t l l l

i n

r e c e l p t

p e n s i o n .

T h e r e

h a s

b e e n

s u q g e s t ~ o n

t h a t

h e

h a s

c o m m i t t e d

a n y

o f fences

i n t h e

b a n k r u p t c y

o r

t h a t

h l s c o n d u c t

p r l o r

t o

t h e

d a t c

o f

t h e

b a n k r u p t c y

h a s

b e e n

o t h e r

t h a n

s a t i s f a c t o r y .

I t

a l s o

a p p e a r s ,

a n d

s a t i s f l e d

t h a t there

were

n o m a t t e r s

s p e c l f l e d

u n d e r

D a r a . l 5 0 ( 6 ) ( b )

t h e

B a n k r u p t c y

Act

w h l c h

would

O F

t h e m s e l v e s

provide

s u f f i c i e n t

r e a s o n

f o r

t h e

r e f u s a l

o r

s u s p e n s i o n

o f

o r d e r of

d l s c h a r q e .

I n

h l s a f € l d a v l t 1 n s u p p o r t

o f

t h e

a p p l l c a t l o n

f o r

d i s c h a r g e ,

P r e s t o n

s a y s

t h a t h l s o n l y source of

Income

o v e r t h e

p a s t

y e a r

or so h a s

b e e n

t h e

p e n s l o n

a n d

t h a t

h a s

likelihood

a g a l n

d e r l v l n g

f u r t h e r

Income.

His

t o t a l assets,

h e

s a y s ,

w o u l d

n o t

amount

t o more

t h a n

$ 1 , 0 0 0 . 0 0

w l t h

savlnqs

a c c o u n t

w h l c h

f l u c t u a t e s

b e t w e e n

$200 .00

a n d

$600 .OO.

is now 79 y e a r s

o f

age

a n d

b e l l e v e s

t h a t

I f

h e

c o u l d

b e

d i s c h a r g e d

f r o m

b a n k r u p t c y

h e

may

b e

a b l e

t o

g e t

part-t lme

]ob

w l t h a

r e a l e s t a t e

f l r m and

f o r

t h a t

p u r p o s e

h e

w o u l d

n e e d

t o

acqui re

r e a s o n a b l y

r e l l a b l e

v e h l c l e .

p r e s e n t l y

Dossesses

w h a t

d e s c r l b e s

a s

v e r y

o l d

borrowed

v e h l c l e " ,

w h i c h

h e

f e e l s

is a	l i a b i l i t y when h e seeks employment w l t h r ea l e s t a t e Elrms.

In the ordinary course, Yr Prestcn would be entitled to

automatic discharqe from his bankruptcy on

12 March 1988. An

application for early discharge is not lightly to be entertained

and it

important in such

case to have reqard to the

considerations of the publlc interest

and

conmercial morality.

There

in this case no opposition either from the o€ficial

trustee

from

creditors who have

been

notified

the

application.

Having

regard to the circumstances

leading

the

bankruptcy as have been outlined, the principal causes of that

bankruptcy

have

been

described

his

involvement

the

unsuccessful land development

scheme

Busselton

and

the

unsuccessful furniture retail buslness.

I do not

believe

that

there

are

any

overwhelming

considerations of public interest or commercial morality which

would militate against discharge at

a time earlier than the period

of three years laid down by the statute. However,

I do think it

important that Mr Preston not, at least for the balance of

the

period of three years, be entitled to participate in any business

on his own account or as a director or partner. To achieve that

end I propose to make an order of discharge which I will suspend

for a short period and attach conditions limiting his ability to

take part in any commercial enterprise on his own account until	12
March 1988.

I	think ln the clrcumstances that an approprlate perlod

for the suspenslon would be some three months.

I certlfy that thls and the preceding

five pages are a true copy of

the Reasons

for Judgment herein of hls Ponour M r

Justice French.

Counsel :

. the appllcant appeared in person

. Mr F.D. 0'~rlscoll

for the Officlal Recelver.

Date of Hearlnq:	2 2 June 1987
Date of Judgment:	2 2 June 1987

6 .

I think in the circumstances that an appropriate period for the suspension would he some three months.

I certify that this and the preceding

five paqes are a true copy of the Reasons

for Judqment herein of his Honour Mr

Justice French.

Counsel :

. the applicant appeared In person

. Mr F.D.

O'Driscoll for the Officlal Receiver.

Date of Hearinq:	2 2 June 1987
Date of Judgment:	2 2 June 1987

IN ?FE FEDERAL COURT	NOT	F O R	G E N E R A L	DISTRIBUTION
OF AUSTRALIA
GENERAL DIVISION
BANKRUPTCY DISTRICT
OF THE STATE OF

WESTERN AUSTRALIA

No. 523 of 1985

RE: DUDLEY THOMAS FORDE PRFSTON

Bankrupt

EX PARTE: DUDLEY THOMAS FORDE

PRESTON

Applicant

MINUTE OF ORDER

JUDGE

MAKING

ORDER:

FRENCH

DATE

ORDER:

22 JUNE

1987

WHERE MADE:	Perth
THE COURT ORDERS THAT:

That

the

bankrupt

be discharged

from

bankruptcy,

the

discharge to be suspended until	23 September 1987, on
the following condition.

The condition

that the bankrupt undertake to the

court not to carry on business as

partner in any

partnership or as

a director of any company

or otherwise

on his own account until

12 March 1988; provided that

this undertaklng does not prevent the bankrupt from

engaging ln casual manual labour.

Note : Settlement and entry of orders is dealt wlth in

Rule 124 of the Bankruptcy Rules.

T H E

F E D E R A L

COURT

)

NOT

FOR

G E N E R A L

D I S T R I B U T I O ~ .

AUSTRALIA

GENERAL DIVISION

)

BANKRUPTCY

DISTRICT

)

OF THE STATE O F

WESTERN AUSTRALIA

)

No.

1 9 8 5

o f

5 2 3

R E : DUDLEY THOMAS FORDE PRESTO?:

R a n k r u p t

E X

PARTE:

D U D L E Y

TtlOM4S

FORDE

PRESTON

A p p l i c a n t

CORAM :

FRENCH J.

2 2

J U N E

1 9 8 7

E X

TEMPORE

REASONS

FOR

J U D G M E N T

O n

March

1 9 8 5

D u d l e y

T h o m a s

F o r d e

P r e s t o n ,

p e n s i o n e r

S t o n e

Crescent,

D a r l i n g t o n ,

f i l e d

h i s

own

p e t l t i o n I n

b a n k r u p t c y

a n d

t h e r e b y

b e c a m e

b a n k r u p t .

A t t h e

d a t e

o f

h i s

b a n k r u p t c y

h e

was

d i v o r c e e ,

a g e d

y e a r s

w i t h

n o d e p e n d a n t s .

was

i n

r e c e i p t

a n

o l d

a g e

p e n s i o n

$ 2 1 3 . 0 0

p e r

f o r t n i g h t

a n d

o u t

o f

t h a t

h e

p a i d

r e n t a l

o f

$ 7 5 . 0 0

w e e k

f o r h i s

r e s i d e n c e .

h a d

b e e n

i n v o l v e d

i n

r e a l

e s t a t e

f o r

some

1 7

years

p r i o r

t o

t h e

d a t e

o f

b a n k r u p t c y .

T h e

t rus tee ' s

r e p o r t

d i s c l o s e s

t h a t

h l s

i n v o l v e m e n t

was

p r l n c l p a l l y a s t h e

d i r e c t o r

O E

two

c o m p a n i e s ,

P r e s t o n

L e o n a r d

Nominees

P t y

a n d

W h i t

P t y

L t d .

c o m p a n i e s

were

I n v o l v e d

l n

t h e

d e v e l o p m e n t ,

s u b d l v l s i o n

a n d

s a l e

o f

f a r m l e t s

i n t h e

R u s s e l t o n

a r e a .

2 .

Without going into detail, the con3any Iri-lt Pty Ltd, oE

which Mr Preston was

director, toaether wlth one Pobert

Nichovich, embarked upon a suhdivislon in cr about 1980 which was unsuccessful followinq upon bad publicity and poor sales. In

November 1982 the company purchased	a	retall furniture buslness
for s55,ooo.oo.

In relation to that purchase

Mr Preston and hls dauqhter

gave personal guarantees

ln resoect of debts of some $10,000.00

owed by the vendors.

Preston says that the turnover of the

business was mlsrepresented to him.

Shortly prior to acquisition

of the business on 11 March

1983, Whit Pty

Ltd

sold its interest to Elster Pty Ltd, another

company of which

Mr Preston was a director.

After

settlement

found

that

having

managed

the

business for a short period,

it ran down slgnlficantly and that

weekly turnover represented to have been

$ 4 , 2 5 0 . 0 0

was

fact

only around

$2,000.00.

As a result, the business was sold after

only two months to

credltor,

T . V .

Davidson Pty Ltd, for

$13,070.00.

The personal guarantee given by Mr Preston was

satlsfled at that time.

He was, for lack of

funds, unable to continue with legal

proceedings which were issued

on behalf of the two companies, by

Preston and his daughter, agalnst the vendors

of the business

and their agents.

3 .

Since the sale

O E

the

D U S L ~ ~ S S

r r Preston has

Seen

malnly unemployed except for a perlocl when he obtalnecl part-time

work as a real estate salesman.

As a result of that unemoloyrnent a nunber of hls assets

were repossessed lncludlng

photocooler and two motor vehlcles;

2 6 acres of property were sold by a mortgaqee at Balvldls pursuant

to the mortqagee's sale. Thls property

had been acqulrea I n 1981.

In the event, he was unable to meet the demands

of bls

creditors and filed hls debtor's petltion.

In the statement

affalrs he dlsclosed llabll1tles

totalling some 580,497,OO; of thls sum $49,800,00	was sald to have
been a personal income tax liability.

In the event,

appears that thls was

slgnlflcant

over-estlmate of hls llablllty posltlon as only some

$22,000.00 of

that amount was owed

him personally, the balance being incone

tax due by the chlldren, beneflclarles under

a trust distribution.

Proofs

debt totalled some

$ 2 5 , 0 7 3 . 0 0 .

Reallzatlons

have been nil and there are no unreallsed assets.

No	funds have been recelved ln the estate and the

official fees have not been pald. A dlvldend has not been pald ln the estate and there wlll be no surplus avallable for dlstrlbutlon

to him.

4 .

The official trustee, in

hls report, ind~cates that

since bankruptcy EIr

Preston's c~rcumstances have not chanqer! and

he is still in receipt oE a penslon.

There has Seep

no suqgestlon that

he has commltted any

offences in the bankruptcy or that his conduct prior to

the date

o f

the

bankruptcy has been other than satisfactory.

I t

also

appears, and I am satisfied that there were

no matters sDeclfled

under oara.l50(6)(b) of the Bankruptcy Act whlch would of themselves provide sufficient reason €or the refusal or suspension of an order of discharge.

In his affidavlt

in support of the application

f o r

discharge, M r Preston says that his only source of Income over the

past year or so has been the pension and that he has no likelihood

of again deriving further income.

His total assets, he says, would not amount to more than

$1 .000 .00

wlth a savings account whlch fluctuates between $200.00

and $600.00.

He is now 79 years of age and believes that if he could be discharged from bankruptcy he may be able to get

a part-tlme

)ob

with a real estate firm and for that purpose he would

need to

acquire a reasonably

reliable

vehicle.

He presently

possesses

what he describes as "a very old borrowed vehicle", whlch

he feels

is a liability when he seeks employment with real estate

firms.

5 .

In the ordinary course, blr Prest@n would

be entltled to

automatic dlscharqe from

hls bankruptcy on

12 Yarch 1988. An

application for early dlscharge 1s not llqhtly to

be entertalned

and it

important

such

case to have reqard to the

considerations of the publlc Interest

and conmerclal morality.

There

ln thls case no opposltlon either from the offlclal

trustee or from credltors	who	have	been	notifled	of the
appllcatlon.

Having

reaard

the clrcumstances

leading

the

bankruptcy as have been outllned, the prlnclpal causes

that

bankruptcy

have

been

described

his

involvement

in the

unsuccessful land development

scheme

Busselton

and

the

unsuccessful furnlture retall buslness.

I do not

belleve

that

there

are

any

overwhelmlng

considerations

publlc Interest

commerclal morality whlch

would militate agalnst dlscharge at

a tlme earller than the perlod

of three years lald down by the statute. However, I do thlnk It

1s important that Mr Preston not, at least for the balance of the

period of three years, be entltled to partlclpate in any buslness o n hls own account or as a dlrector or partner. 'To achleve that end I propose to make an order of discharge whlch I wlll suspend

for a short perlod and attach condltlons llmitlng hls ablllty to

take part In any commerclal enterprlse on his own account untll	12
March 1988.

6 .

I	think in the circumstances that an appropriate perlod

for the suspenslon would be some three months.

I certify that this and the preceding

five pages are a true copy of the Reasons

for Judgment herein of his Honour Mr

Justice French.

Counsel :

. the applicant appeared In person

. Mr F.D.

O'Driscoll for the Official Receiver.

Date of Hearlnq:	2 2 June 1987
Date of Judgment:	2 2 June 1 9 8 7

6 .

t h i n k

i n t h e

c i r c u m s t a n c e s

t h a t

a n

a p p r o p r i a t e

p e r i o d

f o r

t h e

s u s p e n s i o n

w o u l a

h e

some

th ree

m o n t h s .

c e r t i f y

t h a t

t h i s

a n d

t h e

p r e c e d l n g

f i v e pages

a re a

t r u e

c o p y

t h e

Reasons

f o r

J u d g m e n t

h e r e i n of

h i s Honour

J u s t i c e

F r e n c h .

C o u n s e l :

. t h e

a p p l i c a n t

a p p e a r e d

I n

p e r s o n

. M r F.D.

O'Drlscoll

f o r

t h e

O f f i c i a l

Receiver.

Date

H e a r i n q :

2 2

J u n e

1987

Date

o f

J u d g m e n t :

2 2

J u n e

1987

[1987] FCA 394

22 Jun 1987