Vilips, P.K. Re v Vilips, P.K. Ex Parte

[1988] FCA 452

JUDGMENT No. .+.5&4 .... .....

n

'	c .
> .

NOT FOR DISTRIBUTION	. ,
I .
C A T C H W O R D S	i

BANKRUPTCY - discharge - application 10 months prior to expiry of statutory period - reason to obtain credit to buy tools of trade -

large debts - no dividend - no contribution - application

dismissed.

Bankruptcy Act 1966

RE: PAULS KARLIS VILIPS EX PARTE: PAULS KARLIS VILIPS

NO. 381 OF 1986

..

, '
!

FRENCH J.	5 .I
PERTH
8 AUGUST 1988	> .
' . '
?

r

IN THE FEDERAL COURT	)	r .
OF AUSTRALIA	)

!	GENERAL DIVISION BANKRUPTCY DISTRICT
OF THE STATE OF
WESTERN AUSTRALIA 1 No. 381 of 1986 RE: PAULS KARLIS VILIPS

Bankrupt

EX PARTE: PAULS KARLIS VILIPS

Applicant

MINUTE OF ORDER

JUDGE IWKING	ORDER:	FRENCH J.
DATE OF ORDER:	8 AUGUST 1988	. ,
WHERE MADE:	PERTH	i
?

THE COURT ORDERS THAT:

1. The application will be dismissed.

Note: Settlement and entry of orders is dealt with in

Rule 124 of the Bankruptcy Rules.

IN THE FEDERAL COURT

OF	AUSTRALIA	1	I
l
GENERAL	DIVISION	)	l '

BANKRUPTCY DISTRICT 1

OF THE STATE OF )

WESTERN AUSTRALIA 1 No. 381 of 1986
RE: PAULS KARLIS VILIPS

! Bankrupt

EX PARTE: PAULS KARLIS VILIPS

Applicant

- CORAM: FRENCH J .

8 AUGUST 1988

EX TEMPORE REASONS FOR JUDGMENT

Pauls Karlis Vilips became bankrupt at the age of 26 years on 1

July 1986. At the date of his bankruptcy he was employed as a

roof carpenter, in receipt of a wage of about $300 a week. He

paid rent of $85 a week, and maintained two hire-purchase

agreements, one on a motor car and the other on a boat, with

Associated Midland, representing	a combined commitment of	$152 per
week.

His background history,	as	indicated by the official	i !
I

receiver's report, which is not contested in any relevant respect, :I

indicates that although a roof carpenter by trade, in 1981 he

,.

injured his arm while playing sport and as a result of this it was

in plaster for some three months. During the following 18 months

I

he worked intermittently as a salesman, and during that time tried
to repay debts, including commission write-backs. From August
1982 until February 1984, he worked for Stokes IIusic as a salesman
on a $180 per week retainer, with commission. In February 1984 he

set up a company, Ruddock Pty Ltd, with ROSS Leslie Grafton and

himself as directors. Each contributed $4,000 with the aim of

selling musical instruments on consignment under the name "Perth Keyboard City". After eight months of trading they had incurred

debts of about $20,000. Grafton was bought out of the business

for about	$3,000	and the bankrupt's mother took his place	as
director. Their	1984/85	turnover was somewhere between	$350,000

to $400,000, but the bankrupt's salary amounted to only $19,000.

In November 1985 the company opened a shop in Carnarvon

called "Carnarvon Music Academy. Stock had previously been sold

on consignment to finance companies and, according to Mr Vilips, i '

consignment sales were discontinued and a floor plan scheme

I '

entered into with Tokai Australia, a keyboard supplier. The

company ceased trading on 30 June 1986.

During its operations the company incurred $13,000 of

debts and possessed only minimal assets. Due to pressure from

creditors who had received personal guarantees from the bankrupt,
he filed his debtor's petition on	1 July 1986.

Since bankruptcy Mr Vilips has held a number of jobs as

a	carpenter and	has worked as a croupier at Burswood Island
Casino.	In August 1986, he sold the motor boat for $10,682.	The

I

proceeds of that sale	went to Associated #idland. In September
1986, the nominal equity in a Mazda 929	was sold to him for $25

and in September the following year he sold that car to pay out

what	he	owed to Associated Midland, leaving him a surplus of
$1,500 which was used to purchase a	1974 Holden utility said to	be

necessary f o r his trade as a carpenter.

Mr Vilips has not at this point made any	contributions	,	.:
!

to	his estate. The financial summary shows assets disclosed in
the statement of affairs totalling	$570; liabilities amounting to
$29,803, with an additional	$6,342 of known creditors. Proofs of

debt were not requested, but	one	has been lodged for $180.
Realisations amount to $25.

He seeks a discharge to enable him to obtain, on credit,

certain tools of trade, which, he says, he needs to perform	I
efficiently as a carpenter. The tools are to replace some stolen	i
from his utility which were not covered by insurance. The goods
he now wants to purchase include a generator,	at a cost of $1,200;
a drop-saw of	$600; and saw tools. He also wants to acquire a

lock-up trailer at $800. He says that at the moment he cannot

work effectively	as a sub-contract carpenter without tools of this
kind. He	was, until recently, employed	in Queensland, earning

about $300 per week as a carpenter, but returned to Perth because

it was his home and because	he found the living expenses in
Queensland high.
Mr Vilips presently owns the 1974 Holden utility which he purchased with the surplus from the sale	.

of the Mazda 929. He

says that without the tools he does not seem to be getting

anywhere, and that wages work is difficult to get.

This application does not paint particularly a

impressive picture. The liabilities total in excess of $30,000.

There	is	virtually nothing in the estate. There have been no	i
i '

contributions made. I do not criticise Mr Vilips for that because

it may well be, as he said, that the work he has been able to

obtain has not left him sufficient surplus to make any

contributions, although I	do note that	he is single and has no
dependents.

He seeks discharge to enable him to enter into credit I . .

arrangements to a total of about $3,000 to purchase additional

equipment for the purposes of conducting his business as a

self-employed carpenter. Discharge is not lightly given by the

Court where sought before the expiry of the statutory 3 year

period. In these circumstances, it seems to me that the public

interest would not be served by such an order. Mr Vilips

essentially seeks release from bankruptcy in order to enable him

to enter into further credit transactions, and, of course, he

I '

would not be limited to the particular transaction that he has I I (

indicated. In my opinion, having regard to the substantial debts

that were incurred, the almost total absence of any assets, and I.

the absence of even a minimal contribution to the estate, the

public interest is best served in letting the bankruptcy run its

\ r .

course, which would take it	to another 10 months, that is, to July	!
;

1989. The application will be dismissed.	r -
, .
> I
. ,
i
l..
:.

I certify that this and the preceding

four ( 4 ) pages are a true copy of the

Ex tempore Reasons for Judgment	of his
Honour Justice French.

Associate:  p L + + * <

..

t

Mr P.K. Vilips appeared in person.

11r F.D. O'Driscoll appeared on behalf of the Official Receiver.

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