Re Joseph Hedrlin

[1987] FCA 182

I

I N THE	FEDEPAL	COURT	O F AUSTRALIA	1
)

GENERAL D I V I S I O N B P J K R U F T C Y D I S T R I C T ) )

OF THE	STATE	O F NEW	SOUTH	HALES	1 No. 448 of 1333
)

AND THE AUSTRALIAN	CAPITAL	1
1
TERRITORY	)

RE :

JOSEPH HEDRLIN

Bankrupt

ORDER

Judge Maklng Order: Gummow, J.

Where Made:	Sydney
Date of Order:	19 Marsh 1987

THE COURT ORDEPS THAT:

(1)	The appllcation for annulment is refused.
( 2 )	The application for discharge is refused.
( 3 )	The bankrupt is to pay the costs of the Trustee.

Note: Settlement and entry of orders is dealt uith in

Bankruptcy Rule 124.

I

m THE FEDERAL COURT OF AUSTRALIA	1 1
GENERAL DI'JISION BANKRUPTCY DISTRICT )
OF THE STATE OF NEW SOUTH WALES	) No. 448 of 1983
)

AND THE AUSTRALIAN	CAPITAL	1 1
TERRITORY	)

PE :	JOSEPH HEDRLIN
Bankrupt

CORAM: Gummow, J.

DATED: 19 March 1987

REASONS FOR JUDGMENT

By hls amended application filed 2 February 1987 Mr

Iiedrlin ("the Applicant") seeks, in substance, an order for

discharge from his bankruptcy, pursuant to s.150 of the Bankruptcy Act 1966 ("the Act"). When the application came on

for hearing the Applicant indicated that reliance was to some

extent also placed upon the provisions a5 to annulment (S. 154

of the Act). Despite the procedural inadequacles of such an

approach, I decided to proceed as if both issues were before

the Court and the hearing was conducted accordingly.

On 3 March 1987 the Trustee sent a notlce to creditors

of the hearing of the application for discharge. There were

five creditors in question, particulars being:

2 .

Name G Address of Creditor	Amount of
Froof Lodqed
ANZ Bankcard
9th Floor, 68 Pitt Street

SYDNEY 2000	618.09
Australia & New Zealand Banking

Group Limited

Foveaux & Commonwealth Street

SYDNEY 2000

2,107.60

Commonwealth Bankcard

4th Floor, 5 Hunter Street

SYDNEY 2000 4,043.16

E.J. Walsh & Company

Level 5, 17 Castlereaqh Street

SYDNEY 2000	720.00
The Proprletors of Strata Plan

N o . 3670

7-9 Loftus Street

ASHFIELD 2131 6,734.04

No creditors appeared at the hearing.

A sequestration order was made m respect of the

applicant's estate on 18th May 1983. An appeal against that

order was dlsmissed by the Full Court on 29 June 1983. Since

that date there have been numerous appllcations to the Court by

the Appllcant. A ten page summary 1 s included as annexure "C"

to the affidavit of the Trustee sworn 20 February 1987 in the

present application. On 6 March 1986 the Trustee filed a notice

of oblection to what otherwise would have been the "automatic"

discharge of the hppllcant by force of 5.149 of the Act upon

the expiration of three years from the date of the bankruptcy.

3 .

Mr Hedrlin represented himself on the present

application. He emphasised with some vehemence his bellef that

he should never have been made bankrupt and that he should no

longer remain so. The Trustee (by his solicitor) opposed the

application f o r discharge and offered submissions to assist the

I Court on the application for annulment.

I turn first to the questlon of annulment. On 30

April 1986 Lockhart J. dismissed what was then the most recent

application for annulment. In doing	so his Honour said of	Mr
Hedrlin -

“Although some of the matters whlch he has

mentioned are expressed dlfferently or with

different degrees of emphasis, they do In substance, in my view cover the same ground that has been covered in previous applications for

annulment.

The same, in my view, remalns true of the latest

application. Plainly the unsecured debts of the Applicant

which have been proved in the bankruptcy have not been paid In

full, nor has he obtained a legal acquittance of them (s.154(1)

(b)). That leaves the pomt whether the sequestratlon order

ought not to have been made (S. 154 (1) (a)). The Applicant asseverates that he ought not to have been made bankrupt. The judgment debt of the petitioning creditor was founded upon an

order for costs in proceedings in the Supreme Court of New

South Wales. The hlstory of the matter and the legal

princlples and statutory pcovisions (lncludlng the New South

&les Strata Tltles leglslatlon’ w h ~ c h a r e Invol./zd are dealt

i

with ln the ~udgment of the Full Court delivered on 23 June

1983. The matters which were there agitated by the Applicant

were reagitated again before me and reference ln particular was made to the Strata Titles legislation of New South Wales.

On le February 1986, Burchett J. delivered a detailed judgment on an application by Mr Hedrlin for annulment of his

bankruptcy. There had been a number of prevlous such

applications. That application was said to be on a fresh

ground, l & the sequestration order ought not to have been made

because the Applicant had in fact been able to pay his debts.

Burchett J. dismlssed that application. His Honour said that

he was unable to accept the appllcant's evidence concernlng his

property a€fairs or income except where it was corroborated.

Further, his Honour said he was unable to accept any

explanatlon of the Appllcant's statement of affairs consistent

with the case he was then seeking to make out on the

application for annulment.

There is nothing that has been put to me upon the

present application which takes the Appllcant's case upon

annulment any further. In	my view no case for annulment has
been made out.

I turn now to the application for dlscharge. As I

have siid, the Trustee oppases the application. IIe does not

rely upon ss.(5j and ( C ! of z.150, ];ut psincz t:) the :;Ldth cf

. . .

the terms of ss.(9) and to decisions such as Re Hardinq (1981)

57 FLR 3 2 0 , and Re Shepherd (1985) 4 FCR 258. I should refer

also to the following passage in the judgment of Woodward J. in

Re Maher (1985) 7 FCR 240 at 246:

“An application for discharge from bankruptcy is

never treated lightly by the court. As wlth the

granting of a sequestration order, an application

for discharge involves looking beyond the

interests of the applicant and his or her

creditors to considerins both the interests - of the

public and commercial morality, (see Re Mallan

(19751 25 FLR 2 0 , Re Hardinq (1981) 57 FLR 320 and

Re Reill~(1979) 36 FLR 268 at 278) . The trustee

reports to the court on an application and may

appear at the hearlng of the applicatlon to

represent the publlc interest. In making a

decision under S 150(9), the court has a wlde,

unfettered discretion ( s e e Re Hardinq, and Re

Gianacas; Ex parte Official Receiver (1983) 48 fi

537). . .

In exercising its discretion under subs ( 9 ) the

court is not restricted to consideration of

matters of the type listed in subs (61, although

these of course will be relevant.”

The Applicant, as I have said, emphasised his belief

that he should not have been made bankrupt and should not

remain so. He gave his account of how hls bankruptcy came

about and made critical remarks as to the conduct of the

Trustee and his solicitor. That criticism is unsupported by

the evldence. The Applicant also referred to the social stigma

and embarrassment suffered by his family and to the long period

that has elapsed smce the Commencement of the bankruptcy.

The Trustee pointed, in partlcuiar, tu the following matters:

6 .

(a) The only realization in the Estate has been $2.08

credlt in a bank account. There is presently before

the Court an application by the Trustee concerning a

property at Moolgoolga. The respondents to the

application are three members of Mr Hedrlin's family.

On 2 November 1983 the Trustee became registered as

tenant-in-common in an half share, in the place of Mr

Hedrlin. Mrs Hedrlin is the other tenant jn common.

Mr Hedrlin contended before me on this present

'I

application that at all natural times he held the r,I.(e+-L

L_

I L 6 .-W!

legal and equitable title purely as trustee for

members of his famlly. A son of Mr Hedrlln was in

Court during the hearing. The Trustee by his pending

application seeks orders and declaratlons which would

operate to deny the creation of any such trust, or

alternatlvely,to establish that by dint of 5.120 of

the Act any settlement is void against the Trustee.

An application by the Trustee under 5.305 of the Act

to fund this proceeding has been successful.

(b)	The administration of the Estate has been extended and
rendered more difficult and expensive by the conduct

of the Applicant, as instanced both by the large

number of u n ~ u c c e s ~ f u l applicatioii: to the C c l m t by

the Applicant, and Sy the concluslons reached by

Eurchett J. in the ~udgment tcj vhlcli I have rsfc?rre6.

1 .

(c) There are passages in the evidence of the Applicant

before Burchett J. on 18 €ebruary 1986 in which he

admitted earning Income slnce his bankruptcy and not

notifying the Trustee of this. On 25 February 1986

the Trustee wrote to the Applicant requiring the

provision to him of particulars of that income. In

response to a question from me, Mr Hedrlln said that

i

he had not replied to that letter, and it is plain

I that he has not provlded any of the particulars sought

in it. Mr Hedrlin showed no willingness even at this

stage to supply that information.

(d) The Applicant still refuses to acknowledge the

exlstence of the proved debt of the petitioning

creditor and indicated strongly to me that he will

continue in that refusal. The proved debt of Messrs

E . J . Walsh and Company is also still repudiated by the

Applicant. He indicated in his submissions to me some

willingness to deal with the other proved creditors'

debts but it would be appropriate first to see whether

this comes to pass.

Each application for dischargc must of course be

viewed in the light of its own circumstances. In the present

case, xhllst tahng into account the complex history 3f thls

bankruptcy (includlng the comparatively small sum of the proved

9

debts and the lapse of time since 1383) and the submissions by

the Applicant, 1 give great weight to the matters stressed by

the Trustee. Having regard tu all the circumstances I have

l

reached the view that the application for discharge should be

refused.

Accordingly, the applications for annulment and

discharge are refused and the applicant should pay	the cost of
the Trustee. The exhibits may be returned.

I certify that this and the seven ( 7 )

preceding pages are a true copy of the

Reasons for Judgment	of his Honour Mr Justice
Gummow.

Assaciate: & &

Date: 19 March 1987

The Applicant in person: Mr Joseph Hedrlin

Solicitor for the Respondent: Mr P.J. Dugqan

Date of Hearing:	16 March 1987
Date of Judgment:	19 March 1987