Staehr and Official Trustee in Bankruptcy

[2002] AATA 345

DECISION AND REASONS FOR DECISION [2002] AATA 345

ADMINISTRATIVE APPEALS TRIBUNAL)        V2001/1241
  )
GENERAL ADMINISTRATIVE DIVISION )

Re:     DARREN LESLIE STAEHR

Applicant

And:OFFICIAL TRUSTEE IN BANKRUPTCY

Respondent

DECISION

Tribunal          :        Mr B. H. Pascoe, Senior Member

Date                 :        3 April 2002

Place               :        Melbourne

Decision:        For reasons given orally at the hearing the decision under review is affirmed.

(sgd) B.H. Pascoe
  Senior Member

BANKRUPTCY – application for early discharge – unsecured liabilities exceeded 150 per cent of prior year – whether disqualified from early discharge – whether discretion available
Bankruptcy Act 1966

REASONS FOR DECISION

3 April 2002  Mr B.H. Pascoe, Senior Member

1. This was an application to review a decision of the Official Trustee in Bankruptcy made on 27 April 2001, that the applicant was disqualified from early discharge from bankruptcy.

2. At the hearing the applicant, Mr D. Staehr, was unrepresented and the respondent was represented by Mr M. O'Brien, solicitor.  Prior to the date of the application to this Tribunal, the applicant requested the Inspector-General in Bankruptcy to review the decision of the respondent and, on 26 October 2001, the Inspector-General affirmed the decision of the respondent.

3. Mr Staehr was made bankrupt after acceptance of a debtor's petition on 22 September 2000. The accompanying statement of affairs showed unsecured liabilities of $83,874.89 and income of $7000.00 in the 12 months prior to bankruptcy. Mr Staehr applied to the respondent on 29 March 2001 for an early discharge from bankruptcy. The application was rejected pursuant to s.149Y of the Bankruptcy Act 1966 ("the Act").

4. Section 149S of the Act allows a bankrupt to apply for early discharge if he meets the eligibility criteria in ss.149T to 149W and is not disqualified from such early discharge under ss.149X to 149ZE. Section 149Y states:

   149Y(1)   Subject to subsection (2), a bankrupt is disqualified from 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 date of the bankruptcy.
   149Y(2)   Subsection (1) does not apply where:

   (a)the unsecured liabilities were wholly or principally attributable to a tort committed by the bankrupt; and

   (b)the bankrupt was not insured against liability for that tort.

   149Y(3)   The trustee may determine any matter referred to in subsection (1) on the basis of the information provided to the trustee by the bankrupt, whether in the bankrupt's statement of affairs or otherwise.
   149Y(4)   The trustee may also have regard to any other information in the possession of the trustee but is not required to seek any such information. 

5. Mr Staehr did not dispute the figures shown in his statement of affairs and acknowledged that the unsecured liabilities exceeded 150 per cent of the income derived during the year immediately before his bankruptcy and that such liabilities were not attributable to a tort.  However, he considered that being disqualified under such a provision was unfair.  He outlined his reasons for seeking early discharge which can be summarised as a need to undertake a specific course to enable him to develop a business idea which will allow him to become economically independent and work from his home while caring for a young son with special needs.  He is not eligible for the course as an undischarged bankrupt.

6. Unfortunately, there is no discretion provided by the legislation to the respondent or the Tribunal. The wording of s.149Y is clear and straightforward in providing that Mr Staehr is disqualified from early discharge. While the Tribunal has sympathy for Mr Staehr and may believe that a discretion in such circumstances would be appropriate, the law is clear and cannot be ignored. Consequently, the Tribunal has no option other than to affirm the decision that Mr Staehr is disqualified from early discharge from bankruptcy pursuant to s.149Y of the Act.

   I certify that the six [6] preceding paragraphs are a true copy of the reasons for decision herein of
   Mr B.H. Pascoe, Senior Member
   (sgd)     Catherine Thomas
               Clerk

   Date of Hearing  3 May 2002
   Date of Decision  3 May 2002
   Solicitor for the Applicant            Nil — IN PERSON
   Solicitor for the Respondent        Mr M. O'Brien, Messrs Phillips Fox