Re Loughman, G.I. Ex Parte Bank of Melbourne Ltd ACN 007270448 v Loughman, G.I

[1992] FCA 163

IN THE FEDERAL COURT OF AUSTRALIA )

1

GENERAL DIVISION	1	No VP 1075 of 1991
1
IN THE BANKRUPTCY DISTRICT	1
1
OF THE STATE OF VICTORIA	1

BETWEEN: & GEOFFREY IAN LOUQMiVl

. -

i

- (Bankrupt]-

5

AND: [ EX PmTE: BANK OF MELBOURNE LIMITED A.C.N. 007 270 448

-(Applicant-)-

AND :- - -GEOFFRE-Y-I-AN-MUGHKAN-

L a m :	Ryan J
Date:	18 March 1992

2 APR l9

Place:  Melbourne

AUSTRALIA

EX TEMPORE REASONS FOR JUDGMENT

Rvan J: In this matter the judgment debtor has applied for an adjournment for 14 days to allow his newly retained legal advisers to explore the strength of his claim to set aside a default judgment issued against him in the County Court of Victoria at the instance of the petitioning creditor. His Honour Judge Fagan of that Court has already refused an application to set aside that judgment. The debtor acted for himself in that application.

The debtor has given evidence that his income as an insurance	agent for the National Mutual Insurance Company ("National
Mutual") and as a registered tax agent is of the order of $300 a week, out of which National Mutual is entitled, it appears, to deduct certain expenses referable to the rent of an office, insurance and stationery. The debtor is living in rented premises for which he and his wife are liable to pay $920 a month, or $230 a week. They have two dependent children aged respectively nine and six years. The debtor's wife has been made bankrupt in mid-1991 on the petition of the same petitioning creditor, and is said to earn a salary of $30,000 a year from which she is not required to make any contribution to her bankrupt estate.
The debtor's only assets of any substance are said to be choses in action against his former partners in an accountancy practice which was dissolved two and half years ago, and against an entity called the "Caiazzo Group" which is said to owe the debtor approximately $75,000 for the provision of office accommodation and financial advice. Those services, it seems, were last rendered at least two years ago. No account
no action has been taken to recover the amount allegedly due has been submitted to the Caiazzo Group for those services and to the debtor from the Caiazzo Group.
The other liabilities of the debtor are unclear but it does seem that the Westpac Bank has a claim which, to put it at its most favourable to the debtor, is arguably enforceable in an amount in excess of $10,000. The debtor also owes a sum of approximately $20,000 to the National Australia Bank which represents the balance of an amount contributed by him to the former partnership with Messrs Cramer and Zacarich. The judgment debt claimed by the petitioning creditor is in excess of $51,000. As well, debts are admittedly due to one of the debtor's previous solicitors, JM Brown and Company, in the order of at least $1,600. Moreover, the debtor has not submitted a tax return for the last two tax years and may have a liability for unpaid tax in some unquantified but substantial amount.
Whilst I have a great deal of sympathy for the debtor in his concern to stave off bankruptcy and to preserve his source of income as a National Mutual representative and tax agent, I consider that his liabilities are so substantial and his prospects of realising anything from the choses in action which constitute the bulk of his assets are so speculative, that he is hopelessly insolvent. Except for a vague reference to the debtor's sister or other members of his family, there has been no concrete proposal as to the source from which he
prospects of success in seeking at this very late stage to set is to derive the funds to finance the investigation of his
aside the judgment debt. Nor has there been any demonstration that funds are available to preserve or to pursue the debts claimed to be owed to the debtor by his former partners or by the Caiazzo Group.
For these reasons the application for adjournment is refused.

I certify that this and the

preceding three (3) pages are
are a true copy of the
Ex Tempore Reasons for
Judgment of his Honour

Mr Justice Ryan

Associate: bv&~w

Counsel for the Applicant:  Mr SP Gardiner

Solicitor for the Applicant: Allan Moore & CO Pty

Counsel for the Bankrupt/

Respondent:  M r AK Panna

Solicitor for the Bankrupt/

Respondent: Howie & Maher