Re Kolomy, Miloslav Anthony Ex Parte The Official Receiver

[1983] FCA 289

IN THE FEDERAL COURT OF AUSTRALIA	)
1

DIVISION	GENERAL	)
1
BANKRUPTCY DISTRICT THE STATE OF	) )

NEW SOUTH WALES AND THE AUSTRALIAN ) )

TERRITORY CAPITAL 1 No.mO9 of 1980

RE :	MILOSLAV ANTHONY KOLOMY
EX PARTE:	THE OFFICIAL RECEIVER

ORDER

Judge making order:	Beaumont, J.
Date order made:	18 October, 1983.
Where made:	Sydney.

THE COURT ORDERS THAT:

1. The public examlnatlon of the bankrupt shall be

deemed to have been concluded on 26 June, 1980.

2. I order the discharge of the bankrupt.

3 . The operatlon of the order of dlscharge shall be

suspended until 1 January, 1985.

IN THE FEDERAL COURT OF AUSTRALIA ) )

DIVISION	GENERAL	) )
BANKRUPTCY DISTRICT THE STATE OF	)
1

NEW SOUTH WALES AND	THE AUSTRALIAN	)
1
TERRITORY	CAPITAL	) No.N309 of 1980

RE : MILOSLAV ANTHONY KOLOMY

EX PARTE: THE OFFICIAL RECEIVER

CORAM: Beaumont, J.

DATED: 18 October, 1983.

REASONS FOR JUDGMENT

Thls 1 s an appllcatlon for discharge from bankruptcy.

The appllcant was made bankrupt by a sequestration order made on 14 April, 1980. In 1981, the appllcant applled for a dis-

charge but was refused (see Re Rolomy (1981) 5 6 F.L.R. 157).

The evidence then showed that the appllcant had unsecured

creditors In an amount exceeding $100,000 and negllglble

assets. McGregor, J. held that the applicatlon should be

refused for a number of reasons. He referred to the clrcum-

stance that the applicatlon was premature and relled upon the

discreditable record of the bankrupt In commercial proceedings

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in coming to his concluslon that the application should be

refused. He concluded hls reasons as follows (at p.167):

"In my view the appllcatlon is, to say the least,

premature. It would be lnappropriate to grant a

discharge to this applicant having regard to his

commercial history, recent and otherwise whlch

my attention has been drawn to and the nature of

offences and comments which have been made, for

example, by McClelland J. in the Industrlal Commlsslon

concernlng his conduct. He 1s not, at thls tlme

anyway, 'a proper person

(per Cave J. m Freeman's case). My deolslon would ... to be allowed to trade'

be the same If havlng regard to the meaning o r

'fraud' In s.150(6) (h) it could be said that 'none

of the matters specified in sub-s.(6) is establlshed':

see s.150(9). I consider that fraud'within the

meanlng of s.150(6) (h) has been established."

The present posltlon is that proved credltors ln the estate now total $109,577, consisting in the main, of a debt owed to Mahel Investments Pty. Limrted (In Liquidation) ("Mahel") in the sum of '$97,357.00. There are no assets and no contrlb-

l ' utions have been made to the estate. The appllcant IS now 62

years of age. He 1 s divorced from his wife. He was formerly

unemployed but In February, 1983 he left for Hong Kong and

took up a posltion as a commission agent with Lepage Co. Ltd.

On 26 November, 1982 ob~ections to dlscharge of the

bankrupt from bankruptcy by force of s.l49(3)(c) of the

Bankruptcy Act, 1966 ("the Act"), were entered by the liquidator

of Mahel and the Corporate Affalrs Commlsslon. The ground of

ob~ection in each case was:

"That the conduct of the bankrupt during the perlod

before the date of bankruptcy has been unsatisfactory."

Leave to enter the objections had been granted by the

Court on 11 November, 1982. Neither objection has been withdrawn. The bankrupt becomes eliglble for discharge from

bankruptcy pursuant to the provisions of s.l49(7)(a) of the

Act subject to, sub-s.(ll) on 14 April, 1985.

In the application for leave to enter the ob~ectlons

to discharge, the applicant gave evidence by affldavit that

attempted to explain away some of the misdemeanours relied

upon by McGregor, J. in refusing his previous application for

discharge. In particular, the applicant asserted that he was

threatened by his partner on a number of occasions. The applic-

ant said that these threats "completely unnerved" him and

lessened his concentration on hls business affairs. He said

that as a new migrant he felt that he was "being stood over by

a trickster in the American extortion style". He also said

that, in the case of a number of the proceedings in which penalties

or other orders were visited against him, he dld not have legal

representation or, in sane cases, adequate legal representation.

In the case of one of the criminal trlals, he says that he could

not afford legal representation and dld	not appreciate the con-
sequences of pleading gullty.

In an affidavit filed in thls applicatloh, the appllc-

ant says that he deslres to obtain a dlscharge for the reasons

(inter alia) he has not told his employersthat he 1s bankrupt

because he is fearful that they will react by terminating hls

employment and that his bankruptcy means that he is unable to

obtain a credit card for use for travel in the course of hls

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employment as a commlsslon agent.

The Official Receiver appeared at the hearing of this

application. He tendered a letter from the sollcitor for the

Corporate Affairs Commission in whlch the Commission expresses the, view that the application is still premature. The Officlal Receiver also referred to a letter from the llquldator of Mahel explaining that he lacked the resources to appear at the hearing

of this application. In the result, the hearlng before me was

brief and no cross-examination of the applicant occurred.

The applicant has now been bankrupt for a period ex-

ceedlng the statutory three year term. However, although his

recent evidence goes some dlstance towards explaining the origins

of his dlsastrous trading record, the explanatlons proferred

hardly ~ustify his conduct overall. Although the appllcant was

not cross-examined, I am no; persuaded, even on his own evidence,

that the applicant was by any means free of blame In the matters

raised against him. On the other hand, he has already suffered

the criminal penalties visited against him, and to some extent,

it may be unfair if he were to be punished agaln on that

account (see Re Martyn (1936) 9 A.B.C. 238 at p.241).

At the same time, even If it be assumed that the

appllcant were to be acqultted, to some degree, of moral

culpability in connection with the matters raised against hlm,

it does not follow that he is entitled to an uncondltional

discharge. As Street, J. observed in Re Todd (No. 2) (1910)

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10 S . R . 490 (at p.504), the functlon of the Court is not

merely to relieveunfortunate debtors; it is an equally important

part of its duty (inter alia) to protect the trading communlty

and the public generally against persons who have shown themselves

in the past to be unfit to trade.

The case 1 s a marginal one. In all the circumstances,

I think that a dlscharge should be granted but, by reason of the

unsatisfactory features of the case, it should be suspended for

a significant perlod. I propose to order that the applicant

be discharged from hls bankruptcy but to suspend the operatlon

of the order until 1 January, 1 9 8 5 .