Tunn, Re J.T. Ex Parte The Bankrupt

[1986] FCA 244

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C A T C H W O R D S

BANKRUPTCY - application for discharge - bankrupt solicltor - desire

for full practlsing certificate

- role of Law Society - test to be

applled.

Bankruptcy Act, 1966 5.150

Re: John Thomas Tunn

Ex Parte: The Bankrupt

Qld. E214 of 1984

PINCUS J.

BR I S BANE

11 JUNE 1986

IN THE FEDERAL COURT OF AUSTRALIA	)
GENERAL DIVISION	) QLD E214 of 1984
BANKRUPTCY DISTRICT OF THE SOUTHERN 1 DISTRICT OF THE STATE OF OUEENSLAND )

RE: JOHN THOMAS TUNN

M PARTE: THE BANKRUPT

MINUTES OF ORDER

JUDGE MAKING ORDER:	PINCUS J.
DATE OF ORDER:	11 JUNE 1986
WHERE MADE:	BRISBANE
THE COURT ORDERS THAT:

1. The appllcation for an order of dlscharge from

bankruptcy be dlsmlssed.

NOTE:

Settlement and entry of orders is dealt wlth m Order 36

of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA	)
GENERAL DIVISION	) QLD E214 of 1984
BANKRUPTCY DISTRICT OF THE SOUTHERN ) DISTRICT OF THE STATE OF OUEENSLAND 1

RE: JOHN THOMAS TUNN

M PARTE: THE BANKRUPT

PINCUS J. 11 JUNE 1986

REASONS FOR JUDGMENT

Thls is an applicatlon for an order of dlscharge from

bankruptcy. The appllcant, J.T. Tunn, was made bankrupt on 13

April 1984 on a creditor's petltlon and has somewhat less than a

year to go before he would be discharged by effluxion f tlme.

The appllcant 1 s a young solicitor who began practlce

seven years ago on the Gold Coast. Hls practice prospered for a few years and he took In partners. However, in 1982, when real

estate activity on the Gold Coast diminished, the earnings of the

applicant's firm fell and "real difficulties" were experlenced,

which presumably means financial difficulties.

Early in 1983, the applicant's then partner, one Alroy,

left the practice and it was subsequently found that Alroy had

engaged in unlawful financlal dealings which ultimately resulted

in his being struck off the roll of solicitors. The applicant

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says that after Alroy left, the applicant found that he had

stolen from the firm. It is not clear, however, to what extent

Alroy's unlawful activities cost the applicant,	as opposed to the
firm's clients, money.

The applicant continued to carry on practice on his own

account until mid 1983, since when he has been employed by a firm

of solicitors in Brisbane. He has been, since his bankruptcy

allowed to continue in practice on the basis that he works as an

employee only. His salary is $18,200 per annum, in addltion to

which the employer pays the rent on the applicant's home and

other expenses.

The trustee, Mr. J.G. Allpass, has made a well-prepared

report In which he complains that the applicant has, in some

respects, not co-operated in the administration of the estate. only got one after repeated requests. The trustee had a slmllar

experience with respect to preparatlon of tax returns. In

summary, the conduct of the bankrupt was In other respects

satlsfactory. The applicant has made an affidavit in answer to

what the trustee says, in whlch he explains that his defaults in

relation to the trustee were due to his being preoccupied with

lnvestiqations bemq carried out by the Queensland Law Society.

According to the statement of affairs, the appllcant's

debts are a little in excess of $100,000. It seems clear they

have been incurred in large part in connection with the practice

he formerly carrled on at the Gold Coast. One of the reasons the

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applicant gave for his bankruptcy was free availabllity of credit

on an unsecured basis.

Senior counsel for the applicant invited me to apply, as

has been done in a number of other cases, the tests stated by

Woodward J. In re Maher 61 A.L.R. 592. It appears to me that the

most important part of his Honour's reasons, for present

purposes, is the passage at p.601:

"The Court ... must be persuaded to exerclse its	discretion in favour of the granting of discharge
order ... Whllst I agree wlth Toohey J. in Re Benda
that an applicant eed not show 'speclal
clrcurnstances' to succeed, he OK she must, In my
opinlon, show some cogent ground or grounds for the
exercise of that discretion in his or her favour.
A mere dlslike of belng bankrupt - a consciousness
of the stlgrna of bankruptcy, attaching to a l l
bankrupts but felt more by some than by others -
cannot of Itself be enough."

Apart from getting rld of the stlqma of bankruptcy, the applicant

seeks to be free again to practlse on his own account as a

solicitor. Counsel sald, and I accept, that the Law Soclety has

a functlon to perform in determining whether to give an

unconditlonal practlslng certiflcate. I do not thlnk, however,

that the Court is entltled to treat as a matter for the Soclety

determlnation of the question whether the appllcant should be

inhibited from again going into business on his own account;

insofar as that depends on his having the status of a bankrupt,

the questlon 1 s entirely the Court's responslbillty.

The important aspects of the case are, in my view, that

the applicant incurred substantial debts in a fairly short time

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and seems llkely to make but a small contribution towards payment

of them, that he is in employment, despite his bankruptcy, that

he has not been guilty of any important misconduct, but on the

other hand has been somewhat careless of his obligations in

respect of the trustee. The case is very much a matter of

impression, but I have come to the conclusion that no reason of

sufficient strength has been shown to abbreviate the applicant's

bankruptcy. No doubt it is frustrating for hlm to have to accept

subordinate status in his profession u til next April

(particularly as he appears to be very competent, at least in

respect of his litiglous work). But unless the Court is to adopt

the practice of grantlng dlscharges In rather a routine fashion,

such a case as this cannot, in my view, quallfy for an early

discharge. The applicatlon wlll be dismissed.