Re Trajkoski, Bozin

THE BANKRUPTCY ACT 1966

IN THE FEDER- COURT OF AUSTRALIA	)
1

DIVISION	GENERAL	)
)

BANKRUPTCY DISTRICT'THE STATE

) )

NEW SOUTH WALES

AXD THE AUSTRALIAN )

CAPITAL

TERRITORY'

No.@04 of 1978

RE:

BOZIN TRAJKOSKI

ORDER

Judge making order:	Beaumont, J.
Date of order:	21 July, 1983.
Where made:	Sydney.
THE COURT ORDERS:

1. The public examination of the bankrupt shall be deemed

to have been concluded on 31 October, 1979.

2. I order the dlscharge of the bankrupt.

3. The operatlon of the order of discharge shall be suspended for a perlod of twelve months from this date.

THE BANKRUPTCY ACT 1 9 6 6

I N THE FEDERG COURT OF AUSTFSiLIA	)
)

GENERAL

D I V I S I O N

BANKRUPTCY DISTRICT 'THE STATE OF

NEW SOUTH WALES AND THE AUSTRALIAN

CAPITAL TERRITORY'

)

M . W904 of 1978

RE:	BOZIN TRAJKOSKI
-

CORhi:

BEAUMONT, J.

DATED :

2 1 J u l y ,

1983

REASONS FOR JUDGMENT

Bozin

Wajkoski

(" the bankrupt")

sometimes

known

a s

Erosko Wajkoski and as Bob

Way has

made

an a p p l i c a t i o n f o r

discharge from bankruptcy pursuant to

s.150 of t h e Bankruptcy

A c t 1 9 6 6	(Cth.)	("the	A c t " ) .
-

The app l i can t became bankrupt on

23 November,

1978

h i s own

p e t i t i o n .

h i s

statement

af fa i r s , the bankruptcy revea led

the fo l lowing a s se t s :

- 2 -

f ia tor vehlcle	$3,000.00
Less amount owing under hire

purchase

agreement

Australian Guarantee Corp. Ltd.

3,628.00

D e f

i c ienc

6 2 8 . 0 0

Cash i n hand

$85.00

Stock

I n

t r a d e s l t u a t e d a t

Shop

Canberra Arcade and

177 Belconnen Mall	(at c o s t )	$9,000.00
$9,085.00

This s tock

was

s u b j e c t t o a b i l l of

sale t o The Bank

Adelaide and pursuant

t o t h e b l l l of

sale, t h e Bank

took

possession of the

stock.

A t o t a l o f

$233.06

has been

, .

brough t t o the c red i t

t h e estate as follows:

Proceeds

from

amonwealth

Savings Bank of

Aust ra l ia

account	$6.97
Proceeds from sale of

s t o c k s i t u a t e d

a t

177 Belconnen Mall

$121.70

Less expenses of

sale

81.29

40.41

Refund of

lncome

t ax assess-

ment	for the years ending

30 June, 1975 t o 30 June,

1 9 7 9

185.68

$233.06

- 3 -

In his sta-cement 01 a1Ialr-s the bankrupt

dls-

c losed for ty seven unsecured c red l tors for

amounts

to-cal-

l ing $47,596.00.

Ywen-cy

n lne proofs

02 debt

have

been

lodged agalnst

the estate,

twenty seven of vhlch have been

admit ted to

r ank

f o r d l v l d e n d a s o r d i n a r y c l a m s f o r

unoun-cs

to ta l l ing $25 ,617 .00 .

The

remslning

claims

lodged

by the

Bank of Adelalde

i n t h e amount of $10,961.47

and Mutual

Acceptance Limlted

f o r $727.64

a r e s u b J e c t t o f u r t h e r

enquiry.

dividend will

b e p a i d t o t h e c r e d i t o r s

and

amount

$1,065.00

is s t i l l r e q u i r e d t o

pay

the balance

of fees

and

cos ts of adminls t ra t ion .

The

public examination of the bankrupt

was

he ld on

31 October, 1979

and was

ad journed to

a d a t e t o

be fixed.

The bankrupt is a divorced m a n aged 41 yea r s .

unemployed

and

i s

r e c e i p t

o f

s o c i a l s e r v i c e b e n e f i t s

of $160.00

p e r week

out of which he

requi red to suppor t

h i s

f ac to wi fe

and

th ree

ch i ld ren .

has

been

unem-

ployed

since 1978. He gave

evidence

t h a t i n the event of

h i s discharge he would

l l k e t o

engage i n a one m a n opera t ion

doing repair work on

an hour ly r a t e

basls,

s o t h a t h e

would

not have to depend

unemployment

bene f i t s .

The

bankrupt migrated to Austral ia

from Yugoslavia

i n May,

1963 and

s e t t l e d in t h e Wollongong

d i s t r i c t . I n

1965, he moved t o Canberra and

became involved In labora tory

research work with t h e C.S.I.R.O.

untll 1970-71.

He is a

q u a l l f i e d b i o l o g i s t

with

Diploma

B l o l o g y

conce rung

tobacco

from

Macedonla.

In September, 1973,

company

c a l l e d

Tray Consn-uctlons

Ptjr.

Limited

was

lnco rpora t ed in the Aus t r a l i an Cap i t a l

Te r r l t o ry .

The bankrupt was one o f ~ T S

d i r e c t o r s

and

shareholders .

The

company

car r ied on

the busmess

gen-

e r a l commercial

constructlon.

Its business

operat

ions

were

not successfu l

and it was wound up by order of the

Supreme

Court

the

Terr l tory

March,

1976.

The companyls

s ta tement of ar"fairs disclosed

es t imated def ic lency

$226,683.75

as a t 24 May,

1978.

The l i q u l d a t o r s '

r e p o r t

t o

c r e d l t o r s a d v i s e d t h a t

unexplained t rading

loss

$84,311.96

was

Incurred dur ing the per iod

1 Ju ly ,

1975 t o

26 March, 1976.

Another company, Tray Formwork

F'ty.

Limited

was

incorporated on 5 February, 1976. The bankrupt was again

one

i t s d i r e c t o r s and

shareholders .

The

company

was

formed

t o

operate in conJunct ion with Tray Construct ions

Pty.

Limited

carry

out

construct ion

formwork.

This com-

pany also ceased

its opera t ions about the

same time as dld

I ts a s soc ia t e company.

Another

dlrector ,

Adrian Hayley

paid

ou t an amount o f $ 1 0 , 0 0 0

t o t h e

Bank o f New

South Wales

i n

respec t of

an overdraft account

and obtalned an attachment

order from the Court In

1977 i n t h e

sum

$5,283.33

agains t the bankrupt for

amount

h e l d I n

s e c u r l t y

depos i t

a t

t h e

Dickson branch of the

Commonwealth

B a n k .

The bankrupt says	t h a T t h e company is now dormant wlth	no
debts ou ts tandmg.

- 5 -

Tray Concreze Pty.

i m x t e d was

a lso mcorpora ted

5 February, 1976

with the bankrupt

and Adrian Hayley a s

d l r e c r o r s and shareholders .

This company was

formed t o

carry

out

small

scale

construct ion:

short ly

aTterwards,

the

oxher two Tray

companles

ceased

Trading.

The

bankrupt

c l a i m s t h a t h e t r a n s f e r r e d h i s I n t e r e s t

i n

Tray Concrete

Pty. Llmlted to

Mr.

Hayley

f o r a

nomlnal conslderatlon of

$1.00.

A search made of

the

company r e g i s t e r i n t h e

Aus t ra l ian Capi ta l

Territory

f a i l e d t o l o c a t e

any

records

w i t h r e g a r d t o t h i s

company.

5 June, 1976,

the bankrupt

became

The

r e g i s t e r e d

s o l e p r o p n e t o r o f t h e b u s i n e s s

name

Dune

Constructions.

On 26 June, 1976 the bankrupt and Il i+iatkoski

formed a

par tnersh ip and commenced busmess as concrete formers

trad-

ing under

the business name

Dune

Cons t ruc t ions . Prof i t s

and

l o s s e s were

t o be

shared equally.

Each partner mtroduced

c a p i t a l o f $60.00

and both made

drawings of approximately

$200.00

p e r week.

The bankrupt said t h a t

t h e p a r t n e r s h i p

was	successfu l , but it ceased its opera t ions i n December,

1976 a f t e r m argument

between

the pa r tne r s .

It appears

t h a t

when

the par tnersh ip d isso lved , the bus iness possessed

only a few hand

t o o l s and

a l i a b l l i t y of approxlmately

$6,000.00

t o $7,000.00 owing

t o Accord ConcreTe

f o r t h e

supply of concrete,

The

debt was

not d i sc losed

t h e bank-

rupt ' s s ta tement of

affairs.

In Ju ly ,

1975 The bankrupt commenced business on

- 6 -

h l s own account uqder The busmcss name o f "Zodiac A r t

Gal lery".

The name pias registered I n t h e

name of Bob

TraJkoskl on

6 November,

1975 but was

x raxs fe r r ed to the

bankrupt 's parents , Peter

and

Nar la Tra jkoskl for the per iod

1 February,

1976

t o 1 6

Itovember,

1977.

It was then trms-

f e r r e d back t o Bob TraJkoskl.

The bankrupt

c la imed

that

t h i s was

because

an o f l e r made

the bankrup t ' s pa ren t s

t o p u r c h a s e t h e b a n k r u p t ' s i n t e r e s t i n

this

bus iness fo r

mount of

$15,000.00

d id not eventua te .

Durlng the per iod July

1975 t o November

1978,

The

bankrupt carried on business a t a number of premises In

Canberra. On 9 January, 1976,

the

bankrupt

was

granted a

lease of the premlses being

Shop

Canberra Arcade, Canberra

C i t y f o r

te rm of f ive years

a t a

r e n t of

$10,400.00

p e r

annum. He obtained a personal

loan from

Mutual

Acceptance

Limited t o o u t f i t t h e

shop.

The buslness was apparent ly

successful between

mid

1976 t o e a r l y

1977 but then began

decl

ine because of

increased competi t ion.

December

1978, t h e Bank of Adelaide, pursuant

its b i l l of sale,

entered	t h e	premlses	and took possession of	t h e	remaining
s tock .

In June,

1 9 7 7

the

bankrupt acquired

t h e

bus iness car r led

on a t premises being

Shop 5 , Clnema Centre Bullding, Canberra

C i ty ,

a s

a going

concern

for

$ 1 4 , 0 0 0 . 0 0 .

deposit

$ 7 , 0 0 0 . 0 0

was

paid w l t h moneys

advanced by

means

of overdraft

accommodation granted by the Bank of

Adelalde.

The

balance

$ 7 , 0 0 0 . 0 0

was

t o be

pald

I n lns ta lments of

$ 1 , 0 0 0 . 0 0

per

month t o t he vendors.

The bankrupt

advlsed

that

the

vendors

- 7 -

were paid from trading recelpts. Due

to a temporary closure of

the car park and subsequent decllne in patronage, the buslness

became unprofltable. In July 1978 the bankrupt sold the buslness

as a golng concern for	$5,000.00, resultlng In a capltal loss of
$9,000.00.

In August, 1978 the bankrupt obtalned a lease of recently

constructed premises belng Shop

143, Belconnen Mall, Canberra.

The bankrupt furnished the shop with the funds being provided

- <

from the sale of the previous buslness. On 18 October,

1 9 7 8

the

bankrupt executed a blll

of sale over the trade fixtures, flttlngs,

equipment and stock situated in the premlses at Shop

8, Canberra

Arcade and Shop

143, Belconnen Mall to the Bank

of Adelaide. Thls

secured an overdrawn account wlth the bank

in the

sum of $9,985.96

which was collaterally secured on

30 May, 1978 by a registered

mortgage over the bankrupt's house property at

5 2 Nicholas Street,

Hlgglns, A.C.T.

Shop 143 was closed by the Canberra Commerclal

Development Authorlty for arrears in rent.

On 9 June, 1 9 7 2 the bankrupt and hls former wlfe, Silvana

Trajkoskl, became the registered proprletors of a house property

situated at

5 2 Nicholas Street, Higgins. The purchase prlce was

$10,750.00.

A deposit of $500.00 was paid.

The balance of funds

were provided by an advance from the Department of Capltal the subject property.

- 8 -

Pursuant to an order of the Supreme Court

of the

Australian Capltal Terrltory made on

4 November, 1 9 7 4 the

sub~ect

property was transferred to the bankrupt as sole

proprlstor on 1 October, 1 9 7 5 in accordance with the terms of

a dlvorce settlement. The bankrupt's former wife was given an

amount of $8,000.00

for her lnterest

In the house property.

The funds were raised out

f a loan from Mutual Acceptance Llmlted

In the

sum of $14,000.00,

secured by a reglstered second mortgage

on 7 May, 1976.

The balance of loan moneys were used to meet the

bankrupt's current business debts.

On 3 0 May, 1 9 7 8 a third mortgage was registered in

favour of the Bank of Adelaide as colateral security for an

overdrawn account styled "Zodiac Art Gallery".

The subject property was sold at auction on

23 September,

1 9 7 8 for a sale price

of $26,500.00.

The mortgage to the

Department of Capital Territory was discharged

In full on

settlement wlth Mutual Acceptance Llmited receiving a dis-

bursement of $12,882.79.

This creditor has lodged a claim In

the bankrupt estate for an amount of

$727.64 belng the defic-

iency on sale. The third mortgagee, Bank of Adelaide, recelved

no money.

On 29 February, 1 9 8 0 m the Australlan Capital Territory

Court of Petty Sesslons the bankrupt was convicted and fined

$100.00 each in respect of four charges under

s . 2 6 9 ( b )

of the

Bankruptcy Act

1966.

- 9 -

An ob~ection

to the dlscharge of the bankrupt from hls

bankruptcy by force

of S .l49 of the

Bankrupxy Act 1966 was

lodged on 19 November, 1980	by the Official Recelver as trustee
on the followlng grounds:

"The bankrupt has been convicted of offences under the

Bankruptcy Act. The bankrupt failed to comply wlth

the provisions of Section

80(1) in that he failed to

notify the Registrar and the trustee in writing of a

change in his name that occurred during the bankruptcy."

The Official Receiver in his report on thls application

expressed the view that the conduct of the bankrupt during hls

bankruptcy had been unsatisfactory in that:

1. He left Australia without the written consent of the trustee of his estate.

2. He had been convicted in respect of four charges under s.269(b) of the Bankruptcy Act, 1966.

The bankrupt departed from Australia on

4 May, 1982 for

Belgrade, Europe and returned on

18 June, 1982. It would appear

that the bankrupt did write

to the Official Recelver about per-

mission to leave Australia but he anticipated such permission.

The trip was paid for by the parents of his

de facto wife. The

Official Receiver's report also stated that the bankrupt failed to produce sales docket books, invoices, bank cheque books and

bank statements posted to 21 November,

1978.

He was also of

the view that the bankrupt should have

kept a columnar cash

book for each of his business dealings to record income and

- 10 -

expenditure, and a ledger to record his deallngs wlth debtors

and credltors.

The bankrupt clalmed that his bankruptcy was due to ex-

cesslve competltion and

a general declining market situatlon.

This application for discharge from bankruptcy must be

consldered in the

hght of s.150(5),

(6) and ( 7 ) of the Act

follows: _I

provide

which

"(5)

The Court shall, lf any of the matters speclfied

in subsection (6) 1s establlshed:

(a)

refuse to make an order

of discharge;

(b) make an order of discharge but suspend

the operation of the order

as the Court

thlnks proper, elther unconditionally or

subject to condltions.

(6)

The matters upon the establlshment of which the

Court may exercise the-powers specified in sub-

section (5) are as follows:

...

(i) that the bankrupt has been convicted of

an offence against this Act

or the re-

pealed Act or of any other offence

related to

the bankruptcy.

The Court shall not, under subsectlon

( 5 ) sus-

pend the operatlon of an order of dlscharge sub~ect to conditions that requlre, or have the effect of requiring, the bankrupt to make pay-

ments from hls income at any time after the expir-

ation of the period of

5 years commencing on the

date of the bankruptcy."

It is well established that

In consldering the questlon

of a bankrupt's discharge, the court

1 s bound to have regard

- 11 -

not merely to the interests

of the bankrupt and of the cred-

ltors, but also to the lnterests

of the publlc and

of commerclal

morallty (see, for example, Re Halnes

( 1 9 3 7 )

A.B.C.

8 3 ) .

Further, the dlscredltable record of a bankrupt ln commerclal

transactions has been held to be relevant to the grantlng

withholdlng of a discharge from bankrupcy (see Re

Kolomy

( 1 9 8 1 )

56 F.L.R.

157.).

In the present

case, the bankrupt has been engaged In

number of unsuccessful business operations. Further, he has been

convicted on a number of charges under

s . 2 6 9 ( b )

of the Act

presumably for failure to dlsclose his true name and the fact

that he

1 s an undischarged bankrupt.

In Re Martyn

( 1 9 3 6 ) 9 A.B.C.

239,

Luken, J.

consldered an

applicatlon for discharge by a bankrupt who had served a sentence

of imprisonment for a crimlnaloffence

mder the Bankruptcy Act

and had been a bankrupt for six years. The court took into

account the fact that the bankrupt was "struggling towards the

betterment of his family and himself". Luken,

J. there expressed

the n e w that the bankrupt had commltted a crlmlnal offence against the Act for whxh he had been duly convlcted and for which he had duly suffered hls punishment. The court granted

a dlscharge but suspended its operation for six months.

The appllcant has been

a bankrupt for nearly flve

y ars,

since 23 November, 1 9 7 8 .

He has been unemployed for some time

and It 1s qulte unllkely thac any further contrlbutlons to

h l s

Having

considered

the

backrapt

conduct

his. w x a c i s -

fac tory dea l lngs before

and a f c e r his

bankru2tcy and

t k e

offences against

c!Ie Act fcr which :?e was 6 ~ 1 2 -

con-n.cte6, I

propose t o make an order of

d l scharge , h t

t o suspend l t s opez-

a t i o n f o r

period of twelve moaths.

order that the public exarmnatlon of the bankrllpt

sha l l

be deemed t o have

been

concluded

3 1 October, 1979 .

I o r l 2 r

the d ischarge

the bankrupt .

f u r t h e r o r d e r t h a t

t h e o p e r -

a t i o n of

t h e order of

discharge be suspended for

period of

twelve months

from

t h i s d a t e .

. .. ,

[1983] FCA 149

21 Jul 1983