Re Hatch, S.M. v Ex parte Hatch, S.M - [1989] FCA 408

Re: SHAYNE MICHAEL HATCH
Ex parte: SHAYNE MICHAEL HATCH
No. 377 of 1987
FED No. 408
Bankruptcy

COURT

IN THE FEDERAL COURT OF AUSTRALIA

GENERAL DIVISION
BANKRUPTCY DISTRICT OF THE STATE OF WESTERN AUSTRALIA
French J.(1)

CATCHWORDS

Bankruptcy - annulment - payment of debts and official fees in full - court's discretion - relevant considerations - conduct of bankrupt - relevance of delay - 2 years from sequestration to payment of debts - voluntary contribution - applicant of limited means - annulment order made.

Bankruptcy Act 1966 s.154(1)(b)

Bankruptcy Rules r.57(3)

Re Beer (1903) 1 KB 628

Re Lawson (1939) 11 ABC 137

Re Taylor (1901) 1 KB 744

Re Keet (1905) 2 KB 666

Re Gray (1960) 19 ABC 29

Delph Sing v Wood (1918) 25 CLR 497

Ex parte Maxwell 3 MD and D 708

Marek v Tregenza (1963) 109 CLR 1

HEARING

PERTH

#DATE 25:7:1989

Counsel for the Applicant : Mr A. Kaminickas

Solicitors for the Applicant: Scott & Kaminickas

Mr J. Busher appeared for the Official Receiver

ORDER

The bankruptcy be annulled.

Note: Settlement and entry of orders is dealt with in Rule 124 of the Bankruptcy Rules.

JUDGE1

Shayne Michael Hatch became a bankrupt on presentation of a debtors petition on 25 May 1987. He now applies for an order annulling the bankruptcy under para.154(1)(b) of the Bankruptcy Act 1966 on the ground that his unsecured debts, being debts proved in the bankruptcy, have been paid in full.

When he became a bankrupt, Hatch was single, aged 26, without dependents and unemployed. He was in receipt of benefits amounting to $178 per fortnight and paid $35 per week rental. Between 1981 and June 1986 he had been a deckhand on a prawn trawler working for A. Raptis and Sons of Cairns, Queensland. This employment was seasonal for 8 months of the year and in the off season he would return to Western Australia for holidays. He was paid a percentage of the catch, but failed to make any provision for tax payable on his earnings. In June 1986, after returning to Western Australia, he commenced work as a steel fixer for B. & B. Reinforcement. In October of the year he and three other employees were asked to complete a contact on Garden Island from which the firm had been dismissed. According to Hatch, he entered into a verbal partnership with the other employees and completed work on the site in January 1987. Profits from the contract were distributed evenly amongst the four workers and, according to Hatch, he paid 15% tax on his share of the profits. He was unemployed from March 1987 until August 1987 and since then has been employed as a deckhand by Stirling Marine Services in the North West of Western Australia.
The Australian Taxation Office raised an assessment against him in the sum of $9,929.04. The Official Receiver's report does not disclose in response of precisely what earnings this assessment was raised and it is not material for present…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [1989] FCA 408
Decision Date: 25 JULY 1989

CaseChat Overview and Summary

In the case of Re Hatch, S.M. v Ex parte Hatch, S.M., the individual in question applied to the court for the annulment of their bankruptcy, seeking the removal of the legal status imposed due to their inability to pay debts. The court was tasked with determining whether the application met the necessary criteria for annulment, considering the timing and manner in which the bankrupt had settled their debts and paid the requisite fees. The court was also required to weigh the bankrupt's conduct, including any delay in making the payments, against the broader context of their financial situation and ability to contribute.

The primary legal issue before the court was whether the application for annulment should be granted, taking into account the full payment of debts and official fees, the conduct of the bankrupt, and the delay in making the payments. The court had to consider whether the delay and the circumstances surrounding the payments were relevant factors in the decision-making process. Furthermore, the court needed to assess whether the bankrupt's limited means and voluntary contribution were sufficient to warrant the annulment of their bankruptcy.

The court found that the applicant had paid all debts and official fees in full, albeit after a delay of two years from the date of sequestration. The court considered the applicant's limited means and the voluntary nature of the contributions made towards the payment of debts. Despite the delay, the court determined that the conduct of the applicant was not so egregious as to warrant a denial of the annulment application. The court held that the delay and the circumstances of the payments, along with the applicant's limited means, were relevant considerations in the decision to grant the annulment. The court exercised its discretion in favour of the applicant, making an annulment order.

The final orders of the court were that the bankruptcy of the applicant be annulled, effectively removing the legal status and its associated consequences. The settlement and entry of orders were to be conducted in accordance with Rule 124 of the Bankruptcy Rules.

Orders

Orders of the court

The bankruptcy be annulled.

Note: Settlement and entry of orders is dealt with in Rule 124 of the Bankruptcy Rules.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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