Re Markey, R.J. & Anor v Ex parte Markey, D.M

[1987] FCA 179

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BANKRUPTCY - husband wlfe ~ o l n t bankrupts - appllcation by wlfe

i I for dlscharge - failed buslness partnership - wlfe separated with

child - government low cost houslng not provided to bankrupts - no

liabilities disclosed In wife's separate statement - no unsatisfactory conduct - no relevant opposltion - no relevant consideratlon of commercial morality to preclude discharge.

Bankruptcy Act 1966 s.56, s.150

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Re: Maher (1985) 61 ALR 592

RE: RONALD JOSEPH MARKEY and DEBORAH MARGARET MARKEY Bankrupts

EX PARTE: DEBORAH MARGARET MARKEY Applicant

NO. 422 Of 1985

FRENCH J.

2 3 March 1987

Perth

\ FEDERAL COURT OF

AUSTRALIA

PRINCIPAL

! REQISTRY

___ -_-- -h-- --.L

IN THE FEDERAL	COURT	1
OF AUSTRALIA	1

GENERAL DIVISION )

BANKRUPTCY DISTRICT 1

THE OF STATE OF 1

WESTERN	AUSTRALIA	1	NO. 4 2 2 of 1985
RE: RONALD JOSEPH MARKEY and
DEBORAH MARGARET MARKEY

Bankrupts

EX PARTE: DEBORAH MARGARET MARKEY

Appllcant

MINUTE OF ORDER

JUDGE MAKING ORDER:	FRENCH J.
DATE OF ORDER:	2 3 March 1987
WHERE MADE :	Perth

THE COURT ORDERS THAT:

1. The applicant be discharged.

Note: Settlement and entry of orders is dealt with in Rule 1 2 4 of the Bankruptcy Rules.

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I N THE FEDERAL COURT	1
OF AUSTRALIA	1

I GENERAL DIVISION 1

BANKRUPTCY DISTRICT 1

OF THE STAT OF 1

~

WESTERN AU RALIA 1 NO. 4 2 2 Of 1985

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RE: RONALD JOSEPH MARKEY and

DEBORAH MARGARET MARKEY

Bankrup t s

EX PARTE: DEBORAH MARGARET MARKEY

A p p l i c a n t

23 March 1987

I	REASONS	FOR	JUDGMENT
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Ronald Joseph Markey and Deborah Margaret Markey became

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b a n k r u p t on 10 S e p t e m b e r 1 9 8 5 o n t h e i r own p e t i t i o n p u r s u a n t t o S.

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! 56 t h e B a n k r u p t c y o f Act 1 9 6 6 .

A l t h o u g h h u s b a n d a n d w i f e , t h e y h a v e b e e n l i v i n g apar t

s i n c e 23 A p r i l 1 9 8 6 . Mrs Markey has cus tody of t h e i r 8 y e a r old

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d a u g h t e r .

S h e p r e s e n t l y earns $175.00 p e r week from par t time work

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a n d i s i n r e c e i p t o f $ 1 2 3 . 0 0 per f o r t n i g h t s u p p o r t i n g p a r e n t s

b e n e f i t .

T h e b a n k r u p t c y a r o s e f r o m t h e f a i l u r e o f t h e b a n k r u p t s '

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e a r t h w o r k s c o n t r a c t i n g b u s i n e s s w h i c h t h e y c o n d u c t e d a t B u s s e l t o n

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I

. - _

I -

_. .

2.

u n d e r t h e name "Handl-Joe" from Janua ry 1980 u n t l l t h e y ceased

t r a d i n g i n J u n e 1 9 8 4 .

The b a n k r u p t s b e g a n o p e r a t i n g t h e i r b u s i n e s s I n

p a r t n e r s h i p i n J a n u a r y 1 9 8 0 .

V e h l c l e s a n d e q u i p m e n t f o r t h e b u s i n e s s were a c q u i r e d

u n d e r f l n a n c i n g arrangements.

Net p r o f i t s f o r t h e f i r s t 3 y e a r s o f o p e r a t i o n were a s

fo l lows : -

Year Ended 30 J u n e 1 9 8 1 $ 9,626.00

Year Ended 30 June 1982 $14,660.00

Year Ended 30 J u n e 1 9 8 3 $11,786.00

T h e b u s i n e s s r a n i n t o d l f f l c u l t i e s i n 1 9 8 4 . Work began

t o d e c l i n e a n d p a y m e n t s d u e t o t h e p a r t n e r s h i p were n o t m a d e

p rompt ly .

T h e y c o n t r a c t e d t o a o n e p e r s o n o p e r a t i o n b u t b e c a u s e o f

f i n a n c i a l p r o b l e m s h a d t o s e l l most of t h e i r e q u i p m e n t . Some

items were r e p o s s e s s e d .

S u b s e q u e n t l y t h e c o u p l e moved t o P e r t h . T h e r e t h e male

bankrup t had a number of jobs a s a sa lesman and as a storeman.

3 .

Mrs Markey obtained temporary work.

As they were unable to pay debts outstanding from their

business they filed their petition under s.56 of the Act.

Since thelr bankruptcy Mrs Markey continued in her then capacity as an employee in the Land Titles Offlce. Thereafter she obtained part-time employment as a typist wlth Firetech Pty Ltd for which she was paid $154.90 per week.

In September 1986 Mrs Markey ceased working for Firetech

Pty Ltd and for about 1 month was in receipt of a full supporting

parent's benefit at $292.50 per fortnight.

Joint assets of the two bankrupts were as follows:-

(a) Cash	$ 50.00
(b) Household furniture	$1000.00

(c)	Debt due by Australian
Taxation Off ice $ 678.00

$1728.00

- - - - - - - -

Joint liabilities as disclosed in the Statement of

Affairs amounted to $12,003.00.

Mr Markey's separate estate dlsclosed unsecured

creditors of $2,367.00 and partly secured creditors with a net

4 .

deflclency of $ 8 , 2 0 0 . 0 0	maklng a total unsecured liability of
$10,567.00.

There were no liabilities disclosed in the separate

estate of Mrs Markey.

At the date of the Offlcial Trustee's report, 3 claims

totalling $7,321.90 had been received In the joint estate and 4

claims totalling $7,161.52	agalnst the separate estate of Mr
Markey.

No claims have been received against the separate estate

of Mrs Markey.

Assets in the joint estate have realised $236.98 and in

the separate estate of Mr Markey $100.00.

There are, it seems, no other unrealised assets in the

- .r -% - --

joint or separate estates.

There are insufficient fees to pay out the official fees

and costs of administration in the joint estate and in the

separate estate of Mr Markey.

-

.1-.. . _._ - ~-

- ... .

, . . _ L _ _ ._ - - r , . Adequate books of account were maintained with respect

to the partnershlp business. There is according to the Official

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Trustee's report no reason why the conduct of the bankrupts since

I	the date of bankruptcy	should be considered unsatisfactory.
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"- .-_ .

5.

There are, ~t 1s s o l d , no mattcrs of thc klnd spcclflcd under sub-s.150(6) of the Act to ground a refusal or suspension of discharge.

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All credltors certified by the Offlclal Trustee have

been served with notice of the date, tlme and place for the

hearing of Mrs Markey's application.

Notice of intention to oppose the application has been filed by the following persons:-

(1) E.P. L S.M. Hunter

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( 2 ) A.G. White

In the case of Mr L Mrs Hunter the ob~ection is

expressed as follows:-

"...no attempt has been made by either Ronald Joseph or Deborah Margaret Markey to pay back any part of the amount owing to E and S Hunter. In 1983 and 1984 we supported and assisted this couple by supplying fuel to them so that they could continue to operate their

business even though they were experiencing financial

trouble at that time. We gave them service and trust

and feel greatly disappointed at the lack of courtesy

that they have given in return. The amount of over $930

has been owing to E and S Hunter since the abovementioned date and at no time have they attempted

to either phone, write or visit US."

In the case of Mr White the ob~ection is in the

I	following terms:-
i
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' .

' \ 6.

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l .

Th

a t

t h e

B a n k r u p t

h a s

c o n t r a c t e d

a

d e b t

p rov

a b l e

i n

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t h e b a n k r u p t c y w i t h o u t h a v i n g a t t h e time o f

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c o n t r a c t l n g i t a n y r e a s o n a b l e or p r o b a b l e g r o u n d s

o f e x p e c t a t i o n o f b e l n g ab1,e t o pay i t a f t e r t a k i n g

l n t o c o n s i d e r a t l o n h e r o t h e r l i a b i l i t i e s a t t h e

i

I	time ;
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l 2 . T h a t t h e B a n k r u p t h a s b r o u g h t o n or c o n t r i b u t e d t o

h e r b a n k r u p t c y by c u l p a b l e neglec t of h e r b u s l n e s s

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!	a f f a i r s ;
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3 . T h a t t h e c o n d u c t o f t h e B a n k r u p t b o t h I n r e s p e c t of

I t h e p e r l o d b e f o r e a n d t h e p e r i o d a f t e r t h e date o f

B a n k r u p t c y h a s b e e n u n s a t l s f a c t o r y . "

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Mrs Narkey i n h e r a f f i d a v i t s u p p o r t I n t h e f

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I	a p p l i c a t i o n	s a y s : -
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" 1 . I n o l o n g e r res ide w i t h Mr Markey . I r e c e l v e

I s u p p o r t i n g p a r e n t s b e n e f i t f o r my d a u g h t e r a n d work

I 20 h o u r s p e r week a n d t h e r e f o r e I am a low income

I	e a r n e r .
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2 . The d e b t s o c c u r r e d from a b u s i n e s s p a r t n e r s h i p w i t h

my f o r m e r h u s b a n d . I was a p a r t n e r f o r m a i n l y

t a x a t i o n p u r p o s e s .

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! 3 . Debts were f r o m p u r c h a s e s a r r a n g e d by Mr Markey f o r

m a c h i n e r y a n d g o o d s f o r t h e b u s i n e s s o n h i s t r i p s

f rom Busse l ton t o P e r t h . T h e p u r c h a s e s were made

! w i t h o u t p r i o r k n o w l e d g e t o m e . I o n l y f o u n d o u t

when t h e L e a s e or Hire P u r c h a s e p a p e r s were g i v e n

t o me t o s i g n . I d i d n o t w a n t t o s i g n them b u t d i d

so a f t e r a r g u m e n t s a b o u t t h e p u r c h a s e , " to t r y a n d

k e e p t h e p e a c e " .

4 . On s e v e r a l o c c a s i o n s I u rged Mr Markey t o s e l l t h e

m a c h l n e r y o r g o o d s b e c a u s e o f c a s h f l o w a n d t h e

f a c t t h a t t h e y w o u l d s i t i d l e f o r w e e k s o n e n d

w i t h o u t b e i n g u s e d or h l r e d o u t . On e a c h o c c a s i o n

Mr M a r k e y r e f u s e d p o i n t b l a n k . T h e s e a r g u m e n t s

were t h e s t a r t o f my marr lage b reakdown. I t r ied

t o g e t him t o see r e a s o n a n d t h e e c o n o m i c s o f t h i s

a c t i o n b u t h e w o u l d n ' t .

5. On a p p r o x i m a t e l y t h r e e occasions I approached bo th

Mr Markey and M r R. J . A r m s t r o n g t h e a c c o u n t a n t , t o

d raw u p p a p e r s t o c e a s e my a s s o c i a t i o n w i t h t h e

b u s i n e s s H a n d l - J o e b u t h e y were r e f u s e d . I s t a y e d

I
I -
I ----.
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1	, .

. 7.

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o n much a g a l n s t my b c t t c r j u d g m e n t . T h c worry d i d

I a f f e c t my as thma .

i	6 .	I , a s f a r	a s I	am	aware ,	do	n o t	and	have	neve r	h a d
I

d e b t s of my o w n .

l . I make a p p l i c a t i o n t o t h e Federal C o u r t t o

d i s c h a r g e my b a n k r u p t c y i n t h l s m a t t e r . "

1 I

I	I	On 9 March 1987 Mrs Markey	appeared	In	person	and Mr
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W h i t e by counse l . The re was n o a p p e a r a n c e by t h e H u n t e r s .

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i

I Mr Thompson of t h e O f f i c i a l T r u s t e e I n f o r m e d t h e C o u r t

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t h a t

t h e

H u n t e r s '

n o t

ice

h a d

b e e n

s e r v e d

o

n

t h e

O f f i c i a l

R e c e i v e r

l

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I b u t n o t o n t h e b a n k r u p t . No p roof o f deb t had been l odged by M r

I	Whlte.
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Mr D u n d o a p p e a r i n g f o r M r W h i t e , h a d o n l y r e c e n t l y

r e c e l v e d I n s t r u c t i o n s a n d a s k e d t h a t t h e credi tor be g i v e n time t o

f l l e a n a f f i d a v i t w i t h respect t o h i s o p p o s i t l o n t o t h e

a p p l i c a t i o n f o r d i s c h a r g e .

T h e a p p l i c a t i o n was t h e n a d j o u r n e d t o 23 March a t 8 .45

am.

On t h e a d j o u r n e d h e a r l n g Mr Dundo i n f o r m e d t h e c o u r t

t h a t t h e c red l tor W h i t e , s o u g h t l e a v e t o w i t h d r a w h i s not ice of

o p p o s i t i o n a n d l e a v e was g r a n t e d a n d Mr Dundo wl thd rew f rom the

p r o c e e d i n g s .

T h l s a p p l l c a t l o n is b r o u g h t u n d e r s.150 t h e o f

Bankruptcy A c t .

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8 .

It 1s not a case in which any of the categories of

misconduct referred to in sub-s. 150(6) have been made out.

It 1 s therefore open to the Court o grant an

unconditional discharge as sought by Mrs Markey.

However as Woodward J. observed in Re Maher (1985) 61

ALR 592:-

"An application for discharge is never treated lightly

by the Court. As with the granting of a sequestratlon

order, an appllcation for discharge involves looking beyond the interests of the applicant and his or her creditors to considering both the interests of the

publlc and commercial morality."

It is plainly not enough that the bankrupt wishes to

shake off the stigma of bankruptcy.

In this particular case little has been given by way of

reason for early discharge.

It should however be noted that on the adjourned hearing Mrs Markey Informed the court that she was applying to Homeswest for a purchase property to be occupied by her and her daughter. Mr O'Driscoll was good enough to make available to the court a copy of a letter from the manager of Home Ownership Services of Homeswest, written in response to a query by his Honour Mr Justice Toohey on a previous occasion in relation to the Homeswest policy

with respect to purchase assistance.

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9.

i	b
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I	I n	t h a t	l e t t c r i t IS d i s c l o s e d	t h a t	Homcswcst	h a s	a
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l o n g s t a n d l n g p o l l c y t h a t p u r c h a s e a s s i s t a n c e wlll n o t b e p r o v l d e d

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I t o an und i scha rged bankrup t or to a p p l l c a n t s who have e n t e r e d I n t o

I	a n	a g r e e m e n t	f o r	t h e	b e n e f l t	o f	c r e d i t o r s .	A p p l i c a t i o n s	f o r
j
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i a s s l s t a n c e c a n b e a c c e p t e d , b u t t h e a p p l l c a n t 1s i n f o r m e d t h a t

a s s i s t a n c e w i l l not b e p r o v i d e d u n t l l h e or s h e h a s d i s c h a r g e d

i	t h e i r r e s p o n s i b i l i t i e s .
I
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A l t h o u g h a s I o b s e r v e d e a r l l e r , l i t t l e h a s b e e n g l v e n b y

i

way r e a s o n o f f o r e a r l y d i s c h a r g e , t h e c o n t l n u a n c e t h e o f

b a n k r u p t c y w o u l d n o t a p p e a r t o b e n e f i t t h e creditors I n t h i s c a s e

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o r t o s e r v e t h e p u b l i c i n t e r e s t i n any way . No r e l e v a n t

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c o n s l d e r a t i o n o f commercial m o r a l l t y a p p e a r s t o a r i s e I n t h i s

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p a r t i c u l a r case.

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I t may o n t h e o t h e r h a n d , be t h e case t h a t t h e e f f e c t of

a l l o w i n g t h e b a n k r u p t c y t o c o n t i n u e is to p l a c e a n obstacle i n t h e

way of Mrs Markey i n c o n n e c t i o n w l t h t h e a c q u i s i t i o n of low cost

h o u s i n g f o r h e r d a u g h t e r a n d h e r s e l f .

I n a l l t h e circumstances w i t h o u t n o t a n d some

h e s i t a t i o n , I h a v e d e c i d e d t h a t t h e a p p r o p r i a t e c o u r s e i n t h i s

case is t o make a n order t h a t	t h e	b a n k r u p t c y	be	d l s c h a r g e d	a n d	I
w i l l so o r d e r .

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' r 10.

I ccrtify that the preceding

nine (9) pages are a true copy herein

,

of the Reasons for Judgment of His Honour

I	Mr Justice French.
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Counsel.

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. Mr F. O'Driscoll for the Official Receiver

. Mrs D. Markey appeared in person.

. for the Creditor : Mr K. Dundo

instructed by Robinson Cox

Date of Hearing:	9 March 1987
Date of Judgment:	23 March 1987