Stewart, C.B. Re v Stewart, C.B. Ex Parte

[1988] FCA 453

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NOT FOR DISTRIBUTION

C A T C H W O R D S

BANKRUPTCY - discharge - application for discharge 14 months after

bankruptcy - substantial contribution made to creditors -

discharge suspended conditional on further part contribution.

Bankruptcy Act 1966 s.150

RE: CHRISTOPHER BRUCE STEWART	EX PARTE: CHRISTOPHER BRUCE STEWART
NO. 425 of
FRENCH J. PERTH a AUGUST 1988

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IN THE FEDERAL COURT

AUSTRALIA	OF	1
GENERAL DIVISION	1

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BANKRUPTCY DISTRICT )

OF THE STATE OF 1

WESTERN	AUSTRALIA	)	No. 425 of 1987
RE: CHRISTOPHER BRUCE STEWART .

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Bankrupt

EX PARTE: CHRISTOPHER BRUCE STEWART

Applicant

MINUTE OF ORDER

JUDGE MAKING ORDER:	FRENCH 3 .
DATE OF ORDER:	8 August 1980
WHERE KADE:	PERTH

THE COURT ORDERS THAT:

1. The bankrupt will be discharged, but the discharge is

suspended until 0 December 1900 on condition that the

bankrupt do, within that time, make further a

contribution of $3,000 to his estate.

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

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IN THE FEDERAL COURT	)
OF AUSTRALIA	1

GENERAL DIVISION 1

BANKRUPTCY	DISTRICT	1	!
OF THE	STATE	OF	1

WESTERN AUSTRALIA 1 No. 425 of 1987

RE: CHRISTOPHER BRUCE STEWART

Bankrupt

EX PARTE: CHRISTOPHER BRUCE STEWART

Applicant

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CORAM :	FRENCH J.
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8 AUGUST 1988

EX TEMPORE REASONS FOR JUDGMENT

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This is an application for discharge from bankruptcy

under s.150 of the Bankruptcy Act 1966.

Christopher Bruce Stewart became bankrupt on his own

petition on 11 June 1987, and in the ordinary course would be

entitled to statutory discharge in June 1990. His statement of

affairs disclosed assets totalling $603 and liabilities amounting

to $8,700. A further creditor, not disclosed, was the

Commissioner for Taxation in the amount of $130. The Official

Receiver's report indicates that although initially it appeared

that a dividend was unlikely to be paid, realisations effected

after the date of bankruptcy made the payment	of	a	dividend
possible.

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Realisation of shares yielded $1,338, the proceeds of

sale of a 1975 Ford LTD under hire purchase from AGC, yielded a

surplus of $1,639.05, and significantly this in case,

contributions by Hr Stewart himself amounted to a further $5,000,

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making total realisations of $7,977.05. The official fees of

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$40.14 and the Official Trustee's remuneration of $1,070.80	have
been paid.

The estate has to date paid a dividend of $5,044.64,

being just over 58 cents in the dollar. The report indicates, and

the bankrupt does not contest it, that at the date	of bankruptcy
he was 23 years of age, unemployed and single with	no dependents.

He then paid rent of $30 per week and maintained a hire purchase

agreement on a 1974 Suzuki Carry Van with Custom Credit.

He had worked as a labourer for Boral K Windows for 6

months in 1982 and he continued on a casual basis until October

1983.   At that time he began work as a truck driver for the Shire

of Leonora and in October 1984 worked as a farmhand.

In April 1986, his father died leaving a half share of a

house which yielded $15,000. Shortly after this I4r Stewart went

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into a partnership arrangement with one Scott with a view to the
sale of videotext information systems to small businesses. He
made $10,000 of the $15,000 inheritance available to the business.

In July 1986 it became apparent to him that the business was not

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going to succeed and, he says, his partner departed to the Eastern I

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i States. There were, however, known no creditors from that

business venture. He did	not take any legal action	to recover
money as he considered	he had lost it through his	own negligence.

The remaining $5,000 was used to buy a 1975 Ford LTD,

with finance from	AGC, in which he drove to Melbourne for	a
holiday. He did not work for	6 months until November 1986 when	he

commenced employment with Kresta Blinds until April 1987. At that

time he bought the Carry Van for	$3,136 with finance from Custom
Credit, but that vehicle was repossessed shortly after bankruptcy	i
and sold with a shortfall of $2,116. The Ford	LTD, under finance
to AGC, was sold with a surplus of $1,639.05 to which I have	,
already referred.
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Mr Stewart became unemployed in Nay 1987 and being

unable to pay his debts filed his debtor's petition in June of

that year. Since bankruptcy he has worked on and off as a

labourer in the north-west, and in the course of that work has

saved some $5,000, which he contributed as a lump sum to his

estate.

He has told this Court in evidence, that he is presently

employed as a labourer with Thiess Contractors. Although he is

working on a particular contract job at the moment he expects to

continue that employment into the indefinite future as he has

already been transferred from contract to contract on three

occasions. He therefore appears to have established some degree
of continuity in employment. He says his weekly earnings with

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Thiess Contractors presently range between $600, after tax, to

$900, after tax. He has to supply his own accommodation and food.

He has to this date saved $625 which is in his bank account. I

put to him when he gave his evidence, that he might yet be in a

position to make a further contribution to his creditors and he I .
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said he felt he could be in a position to contribute another

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$5,000 wlthin a period of four or five months.	!'
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The Official Trustee's report indicates that there have

been no offences committed by the bankrupt in this bankruptcy and
there is no suggestion that his conduct has been other than
satisfactory. There is no opposition from any creditor, and it
appears from the evidence that all creditors have been notified.

The reason given for seeking early discharge, as set out in a

statutory declaration accompanying the application, is that Mr

Stewart wishes to start a new life, as he feels he has shown that

he is now a more responsible person, having made the effort to pay

off his bankruptcy. He hopes in the near future to be able to buy

a house or block of land, thus becoming, he says,	a	responsible
member of the community.

There are competing interests to be considered here.

There is the legitimate interest of the bankrupt in shaking off

the stigma of bankruptcy and returning to full financial capacity

in the community. There is also the public interest which

requires that persons who are capable of doing so, should meet

their obligations to their creditors.

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In this case, it is a factor in favour of Mr Stewart's

application that he has made a substantial contribution to his

estate. In my opinion, however, an unconditional and immediate

discharge would be unfair to his creditors given his present and

prospective earning capacity. It seems to me that justice will be

done and he will be given an incentive to make a contribution if I , I

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make an order for discharge suspended for a period of four months,

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conditional on him making a further contribution of $3,000 to his

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estate in that time.

Given his own evidence, that should be well within his

I reach. If it is not, if for example, he loses his employment and

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cannot meet that condition then his discharge will not take	I
effect, but he will be in a position to make further application on the basis of those changed circumstances. So the order that I
propose to make, pursuant to	s.150(9) of the Act, is that the

bankrupt will be discharged, but the discharge is suspended until

8 December 1988 on condition that the bankrupt do, within that

time, make a further contributlon of $3,000 to his estate.

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I certify that this and the preceding L .

four ( 4 ) pages are a true copy of the

Ex tempore Reasons for	Judgment of his
Honour Justice French.

Associate: 7LLfiLA

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Mr C.B. Stewart appeared in person.

Mr F . D . O'Driscoll appeared on behal f o f the Off ic ia l Rece iver .

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Date of Hearing:	8	August	1988
Date	of	Judgment:	8 August 1988

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