Re Nguyen, Van Quyen (A Debtor)

[1997] FCA 71

IN THE FEDERAL COURT OF AUSTRALIA           No QB 1235 of 1996

GENERAL DIVISION  
BANKRUPTCY DISTRICT OF THE
STATE OF QUEENSLAND

RE:VAN QUYEN NGUYEN  (A DEBTOR)

MINUTES OF ORDERS

CORAM:  Drummond J
DATE OF ORDER:  10 February 1997
WHERE MADE:  Brisbane

THE COURT ORDERS THAT:

1.  The application is dismissed.

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

IN THE FEDERAL COURT OF AUSTRALIA                 No QB 1235 of 1996
GENERAL DIVISION  
BANKRUPTCY DISTRICT OF THE
STATE OF QUEENSLAND

RE:VAN QUYEN NGUYEN  (A DEBTOR)

CORAM:Drummond J

DATE:10 February 1997

PLACE:Brisbane

REASONS FOR JUDGMENT

This is an application by the bankrupt for an abridgment of the time within which the bankrupt will be discharged from bankruptcy.  The bankrupt became bankrupt on his own petition on 18 April 1996.  His statement of affairs accompanying his petition was filed that same day.  It shows that he had few assets and unsecured creditors totalling approximately $32,000.  It showed that his income in the preceding 12 months was $6,370 from a Social Security pension. 

The Official Trustee has filed a report in which he sets out the result of his administration of the estate, confirming in effect the information contained in the statement of affairs.  It is an estate in which no debts have been proved. It is an estate in which there is, for practical purposes, probably nothing of realisable value.  The only property of the bankrupt which the trustee considered it worthwhile selling was a second hand motor car which brought in a very small amount of money indeed.

The Official Trustee, in his report, says that Mr Nguyen, by letter dated 13 December, sought the abridgment of time now claimed. The Official Trustee, not having any authority to grant the abridgment, treated it as an application for early discharge under s 149S(1) the Bankruptcy Act 1966 (Cth).

By force of s 149(2), Mr Nguyen would be discharged at the end of a period of three years from 18 April 1996, when he filed his statement of affairs. Under s 149S(1), the bankrupt is entitled at any time after six months from the filing of his statement of affairs to apply to his trustee for early discharge. However, s 149Y prohibits the trustee granting early discharge if the bankrupt's unsecured liabilities exceeded 150% of the income that the trustee determines to have been derived by the bankrupt during the year immediately before the bankruptcy. The Official Trustee made a determination that the bankrupt's income for the period referred to in the section was the amount of the pension disclosed in the bankrupt's statement of affairs. It followed that the Trustee was bound to determine that the bankrupt was disqualified by s 149Y from obtaining an early discharge.

There are provisions in the Bankruptcy Act for review of a trustee's determination by  the Inspector-General and by the Administrative Appeals Tribunal.  But it seems that, in the circumstances of this case, any such applications would have been doomed to failure because the Inspector-General and the Administrative Appeals Tribunal would, so far as the evidence before me shows, have been bound to uphold the Official Trustee's determination that the bankrupt was disqualified, by force of s 149Y, from early discharge.

The Court, however, has power under s 33 to abridge any time fixed or limited by the Act and I regard that section as empowering the Court to abridge the period of three years which s 149(2) fixes as the period that should elapse from filing the statement of affairs before automatic discharge from bankruptcy takes place.

There is no opposition by the Official Trustee to the relief sought by Mr Nguyen in this case.  His affairs have been investigated by the Official Trustee.  The limited evidence before me shows that no purpose is likely to be served by Mr Nguyen being kept in bankruptcy and it might therefore be thought appropriate to make an order abridging the time provided by s 149(2) for discharge.

However, Parliament has nevertheless declared that in circumstances where a bankrupt's unsecured liabilities exceed by 150% his income in the year preceding his bankruptcy, he is to spend a period of three years in bankruptcy.  The Court's power to shorten that period can, in my view, only be exercised if the circumstances of the particular case show that there is a good reason why the particular bankrupt should not be subject to the general rule that Parliament has enacted.

Mr Nguyen has given evidence as to desiring early discharge from bankruptcy, essentially because if some opportunity presents itself to engage in some form of business, his bankruptcy might be an impediment to him doing that.  Mr Nguyen has been for some time on the pension.  He does not suggest that he has in mind any possible business venture to which his bankruptcy might be an impediment.

In these circumstances I am not prepared to exercise the discretion to abridge the three year period fixed by the section during which Mr Nguyen must be bankrupt.  This does not, of course, mean that Mr Nguyen cannot make a further application to the Court, if circumstances are such as to make him think that he will be able to demonstrate to the Court that there is a good reason why he should be exempt from the rule that Parliament says should generally apply to all bankrupts in his position.  I dismiss the application.

I certify that this and the preceding three
pages are a true copy of the reasons
for judgment herein of the Honourable
Justice Drummond.

Associate:

Date:  10 February 1997