sles CATCIMWORDS Bankruptcy - Discharge - Application four years after bankruptcy commenced - Objection by Official Trustee and several creditors - Substantial deposits and withdrawals recorded in applicant's bank accounts: - No contribution for benefit of creditors - Whether discharge prejudicial to administration of applicant's estate - Whether assets of applicant sufficiently disclosed - Whether applicant carried on business as publisher - Nature of applicant's interest in or relationship with Hong Kong company - Whether adequate public examination - Court's discretion in relation to discharge where none of matters specified in s.150(6) of Act established - Whether discharge should be postponed beyond statutory term. Bankruptcy Act 1966, ss. 150, 149, 81 RE: RICHARD JAMES CLEARY No. 399 of 1978 CORAM: ELLICOTT J. 28 January 1983 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA) BANKRUPTCY DISTRICT OF THE No. 399 of 1978 ) ) ) STATE OF NEI SOUTH WALES AND ) ) TUE AUSTRALIAN CAPITAL TERRITORY ) RICHARD JAMES CLEARY Applicant/Bankrupt ORDER JUDGE MAKING ORDER: Ellicott J. DATE OF ORDER: 28 January 1983 WHERE MADE: Sydney THE COURT ORDERS THAT. - 1. The application for discharge be refused. 2. The applicant pay the costs of the Official Trustee. IN THE FEDERAL COURT OF AUSTRALIA BANKRUPTCY DISTRICT OF THE No. 399 of 1978 STATE OF NEW SOUTH WALES AND ) ) ) ) ) ) ) THE AUSTRALIAN CAPITAL TERRITORY RICHARD JAMES CLEARY Applicant /Bankrupt CORAM: Ellicott J. REASONS FOR JUDGMENT Richard James Cleary (''the applicant") was made bankrupt on 8 June 1978 and has applied, pursuant to s.150(1) of the Bankruptcy Act 1966 ("the Act") for an order of discharge, twelve months having expired since @ the date his bankruptcy commenced. An objection to his discharge was lodged by the Official Trustee on 3 June 1981 under s.149(3)(c) of the Act, the reason given being that his discharge would prejudice the administration of the applicant's estate, partic- ularly the investigation of reasons for substantial deposits and withdrawals recorded in an account of the applicant at the Commonwealth Savings Bank in Oxford Street Sydney. An objection was also lodged on behalf of a ereditor, Wilke & Co. Limited on 14 October 1982 after the application for discharge was lodged. Its debt is $68,000. The creditors have been duly served and the application is opposed by several creditors, namely, American Express International Inc. (the petitioning ereditor), Puts} Publications NV ., Colour Scanners Pty. Limited, as well as Wilke & Co. Limited. At the hearing the Official Trustce, Wilke & Co. Limited, Puts} Publications, as well as the applicant, were represented by counsel. Prior to his bankruptcy the applicant had been a school teacher and publisher of books used in schools. For a pexiod prior to 1970 he wrote and published a number of books on mathematics. Because he liked writing and publishing educational books he caused a company, R.J. Clearv Publishers Pty. Limited, to be incorporated on 28 August 1970 and he was the sole beneficial owner of the shares in that company. Shortly after it was formed he geve up teaching and worked full-time for the company. At first it created books and had them printed. They were kept at his home and,as orders were received, suoplied to schools. Subsequent Ly ,the company,under his control,created the works and had them printed but supplied them to a distributor for distribution to hook shops and schools. Ultimately because the company had difficulty in distributing books and the publishing industry appears to have been in a tight situation, he and the company found themselves in financial difficulty and the company went into Liquidation on 16 June 1978. The company R.J. Cleary Publishers Pty. Limited was dissolved on 10 May 1979 and no dividend was paid to its creditors. The Official Trustee has filed a report pursuant to the Act. According to it, the applicant, in his statement of affairs, disclosed, as assets, his shares in the company and a debt due to him by the company, both of which are valueless. He also disclosed fourteen unsecured creditors whose liabilitics totalled approximately $104,000. Of this amount, approximately $98,000 represented debts of the company which he had gear eee' Eight creditors have lodged claims totalling $33,000 but as yet no dividend has been paid. T ihe public examination of the bankrupt was held on 12 September 1978 and it was then adjourned to a date to be fixed. Since his bankruptcy the applicant has earned income as follows:- Year Year Year Year ended 30 June ended 30 June ended 30 June ended 30 June 1979 $7171.00 1980 $2279.00 1981 $14883.00 1982 $20847.00 Ld He is currently employed as a school teacher at St. Vincent's College at Potts Point where he earns $318.00 per week after tax. He has given evidence that (6) The matters upon the establishment of which the Court may exercise the powers specified in sub-section (5) are as follows - (a) (b) (c) (da) (e) (f) that the bankrupt has omitted to kecp and preserve such books, accounts or records as sufficiently disclose his business transactions and financial position within the period of 5 years immedtately preceding the date on which he became a bankrupt; that the bankrupt has, after knowing himself to be insolvent, continued to trade or obtained credit to the amount of $100 or upwards; that the bankrupt has contracted a debt provable in the bankruptcy without having at the time of contracting it any reasonable ox probable grounds of cxpectation (prooE of which lies on him) of being able to pay 1t after taking into consideration his other liabilities at the time, that the bankrupt has failed to account satisfactorily to the trustee for any less of, or depreciation of, assets or for a deficiency of assets; that the bankrupt has brought on, or contributed to, his bankruptcy by - (i) yash or hazardous speculations; (ii) unjustifiable extravagance in living, (iii) gambling or wagering, or (iv) culpable neglect of his business affairs that the bankrupt has, within the period of 6 months immediately preceding the presentation of the petition on which, or by virtue of the presentation of which, he became a bankrupt - (1) put any of his crecitors to unnecessary expense by a frivolous or vexatious defence to an action brought against han, or (11) incurred expense by bringing a frivolous or vexatious action; en eee on - - - - OSE re ret ha RP ARISE RENN ALITA hr ARR GER AN ELT AAT I BEI 1 RAE TEES Arh Eat TRY SORE rer aera oe (gz) that the bankrupt has, within the period of 6 months immediately preceding the presentation of the petition on which, or by virtue of the presentation of which, he became a bankrupt, when unable to pay his debts as they became due, given an undue preference to any of his creditors, (h) that the bankrupt has been guilty of fraud or fraudulent breach of trust; or (i) that the bankrupt has been convicted of an offence against this Act or the repealed Act or of any other offence releted to his bankruptcy. (7) The Court shall not, under sub-section (5), suspend the operation of an order of discharge subject to conditions that require, or havegtne effect of requiring, the bankrupt to make mence from has income at any time after the exvirat.on of the period of 5 years commencing on the date - of the bankruptcy. (9) Where none of the matters specified in sub-sectioi (6) is established, the Court may - (a) refuse to make an order of discharge; (b) make an order of discharge; or (c) make an order of discharge but suspend the operation of the order as the Court thinks proper, either unconditionally or subject to conditions. (10)The Court shall not, under sub-section o@ suspend the operation of an order of discharge beyond the period of 3 years commencing on the date of the bankruptcy." If,therefore, the provisions of s.150(5) are not anplicable,J have a discretion under s.150(9) which, in the circumstances of this case, is limited to making or refusing to make an order of discharge because a period of three years has already elapsed from the date of the bankruptcy. 7. It is also important to bear in mind that if I do not make an order or no order is made pursuant to s.149(8) (9) or (12) of that section the applicant will be discharged by operation of law (s.149(14)) on 8 June 1983 because, on that date, the objections already lodged will lapse and the bankrupt is, by force of s.149, discharged upon the lapsing of the objections, The principal grounds upon which the creditors heave opposed an order for discharge are that the bankrupt has, since the date of his bankruptcy: - (a) (b) (c) (d) (e) carried on business as a publisher of books and acquired property thereby.divisible amongst his creditors; purported to act as managing director of R.J. Cleary Publishers Pty. Limited and acquired property so divisible; been the beneficial owner of the share capital of Bahloo Publishers Limited, a Hong Kong company, and received substantial amounts which are divisible amongst his creditors; received amounts from L. & S. Educational Supply Corporation Limited ("L. & 8.") and Edward Arnold (Publishers) Limited which have not been made available to his creditors; conducted bank accounts in Sydney and Hong Kong; and 8. ; rr, (£) failed to make sufficient contribution to his estate despite his carnings as a school teacher and a publisher. The creditors also claim that the applicant had failed to disclose matters (a) to (e) and that there has been an unadeauate public examination. In the circumstances it is said that the grounds of objection permissible under s.149(4) have been established, narely,- (a) that he is able or likely, within five years from the date of his bankruptcy, to be able to make a significant contribution to his estan (b) that his discharge would prejudice the administration of his estate, (c) that he has failed to co-operete in the administration of his estate, (d) that his conduct after the dare of his bankruptcy has been unsatisfactory It is also claimed that he has been guilty of fraud. Some of the allegations made against the applicant are inter-connected. The allegation that has concerned me r most has been the suggestion that he is the owner of the shares in Bahloo Publishcrs Limited ("Bahloo"). JI shall deal subsequently with the allegations concerning this company. Hovever, subject to this, I am satisfied with the applicant's explanations of the allegations contained in the paragraphs set out above. ee ELE Dade Eat le ctrl A Sze Esti EL ett OTIS Re rE S RA FNS gS . ania ec 9. It is first alleged that he has been carrying on business as a publisher. This, it is claimed, is borne out by the fact that his name has been shown in a publication "Australian Books in Print" in 1931 and in "Australian Book Scene" 1982-1983 as a publisher of books. In "Australian Books in Print" 1981, he is showm as the publisher of "Australiana, general, educational and childrens books". In connection with this entry he supplied a long list of publications as at 29 May 1980. Some of these were shown as out of print. . r ln the 1979 and 1980 editions of "Australian Books in Print" he is shown as the Managing Director of R.J. Cleary Publishers Pty. Limited. He was a member of the Australian Book Publishers Association from 1980 to 1982 and paid subscriptions appropriate to that category of publishers whose turnover was below $50,000. For the purposes of his membership, annual statistics were supplied to the Australian Book Publishers Association on a confidential basis and the actual returns for 1980 and @ 1981 are before me. In the first return under "Sales in Australia" an amount of $2279 is shown against "income from sales of rights in Australia" and approximately $7,000 as "value of work in progress at balance date". In relation to 1981 he showed against "income from sale of rights outside Australia" $14,883 and as the "value of stock and work in progress at balance date" approximately $16,000. me a 10. , There is no positive evidence that he was carrying on the business of publishing books after the commencement of his bankruptcy either on his own behalf or on behalf of R.J. Cleary Publishers Pty. Limited except the evidence relating to Bahloo and the assertions made e1ther in the publications I have refexred to or to the Australian Book Publishers Association. His explanation was that he held out that he was engaged in publishing to keep up with professional information so that he could ultimately get back into the publishing induscrv, He agreed that in each case it was untrue and apologised for 12. In relation to the sales and stock Figures in hy returns to the Australian Book Publishers Association, he says that these Figures actvally represented his earnings or a proportion of his earnings as a teacher and therefore were not true. His membership of the Association has not been renewed because he is a bankrupt. The information about his bankruptcy was not passed on to the Association by him but by some other person. The list of books sent to "Australian Books in Princ" represented titles of books in whose publication he had peo involved. He agrees that he was representing that,as at Mey 1980, they were still in print except to the extent indicated. He says that at that point in time they were being distributed by the company L. & S. His name appeared un relation to them,he says, because he was the creator of the particular books. They were being supplied by Bahloo and he was acting here as agent for Bahloo. 11. Although this evidence leaves one in some doubt as to the true position it does not enable me to find positively for the purposes of these proceedings that the applicant is or has beon carrying on, since June 1978, the business of publishing. At the same time 1t¢ does not give me any great confidence in the reliability of the applicant as a witness or of the statements he makes. It may well be that he wished, following his bankruvtecy, not to publicise the Fact any further than was needed and to continue to give the umpression that he was a publishcr of books to the trade even. thovgh he was not. However, in doing so he was repared to make assertions which were wntruc and abour cs wiich he now feels embarrassed and for which he apologises. Tnere is no evidence that he has acted as ranaging director of R.J. Cleary Publishers Pty. Limited since his bankruptcy except that he may have received £900 from Edvard Arnold (Publishers) Limited for royalties. On the evidence, it is more likely than not that it was paid in 1977. Wowever, even if received subsequently, I am not satisfied that it formed part of his estate or that his action in receiving 1t arfected his estate. 12. ' A further allegation by the ereditors relates to the receipt of certain amounts from the company, L. & S., namely, $1,000 paid in May 1979 and $6084 in February 1980. As to the sum of $1,000, the applicant says he received 1t on behalf of Bahloo and with its approval he treated it as a loan from that company which he applied towards expenses associated with the books he was then preparing. As to the sum of $6084 he says he agrees it was paid into the account of Bahloo but, having no interest in TY the company, he has no interest in the moneys. Both these payments therefore are to some extent connected with the relationship between the applicant and Bahloo. At the moment I am not satisfied, on the evidence, that the ereditors had any interest or retain any interest in either of these amounts. It was also alleged that he had maintained two bank accounts, one 1n Hong Kong and the other at the Commonwealth Savings Bank in Oxford Street, Sydney. He @ denies having an account in Hong Kong and there is no other evidenee before me of 1t. He admits however the existence of an account with the Commonwealth Savings Bank. He also had accounts vwith the National Bank Savings Bank Limited and rear ER BRIE SE tt See atten eatin ete Eee eRe See TOT earn Sef cnet on cee eer e 13. there 1s seme account with St. Vincent's College. So far i as the evidence goes, I do not think these accounts have emy relevance except so far as they contazn entries oe ee en HELEVA to his assoczatien wit Bahlco. Otherwise they ; 2 ET AAS Peet Sty do ner indieate the conduct of any busines of the rececipl of any srolerty oched then thit which 'las been erplaineda, : | @ narcty, the inconc from his occupation as a teacher. 4 further ground of cbjection Was chat he ha | earned subdiertial income as a teacher but had made no corprz- bution to his escate cut of that imeenme. 4s to this ho apders to have a conpleie answer because s,13Ll provides : that a benkcupt 1s entitled te recain income For kis om | benefit subject to anv ordes made by tha court unZer that secrioy. To such ordcer has been made of scught rotwithstandins the passage of time since June 1978. he vom UA SAMOT Sprig Fae @ "ais brings ne to the matter which, as T indieeted erslier, bas concerned me mest, nemelv, hss \ assoc.erton with the Hong Kon ua s} corpany know as Bahlno Je co weare that thrs commary was incorporated im Wovenscr 1475 and aos a small pacd up Caprcal of §2.00. Contact 1S £ or a tirm of accuunrenes, mode with re ak the regisyce Jon. B.2 Berne & Co ut therr premises iP Reng Vong. Thre aceerntunts provide the admanisrretiv2 services Tor the compcny end do all its Vamaneial work Pie shareholders are Sou 14, two other companies, Edgworth Limited and Bericom Limited. He says that Bahloo is a nominee company but that he does not know specifically for whom it 1s a nominee. Tle deals with two persons in Hong Kong, Mr Jeff MeLcan and a Mr Leung. The company's business is acting as an agent between printers in Hong Kong, typesetters in Jlong Kong and other publishers outside of ilong Kong. In addition to L. & S.,Bahloo has clients such as Nelsons in Caneda, Sackett & Merlin in Londen , Southdown Press and Rigby Press. The applicant claims @ that he has no knowledge of what business Bahloo dees or bas done vith anybody clse outside L. & S. In 1981 and 1982 no business was done with L. & S. He says that during 1979 the business done with L. & S. was appronimately $39,000 and in 1980 $6,000. Mr Mci.ean and Mr Leung 1? he says, were employed by the accountants, John B.P. Byrne & Co. and their services were apnarently sub-contracted to Bahloo. The epplicant claims that efter his bankruptcy he spoke to Mr McLean and told ham about - it and that 1t was agreed that the anplicant could act @ on an agencv basis for Bahloo in Australia. He also asked if Bahloo would help him out in getting some books published which he was in the process of writing. There was to be P & 15. no cash remuncration in the sense of payment for acting as agent. What he did for Bahloo was to be on a voluntary basis but in turn it was going to help him out with some loans to get his books "off the deck", Before the bankruptcy, R.J. Cleary Publishing Pty. Limited had arranged with Bahloo to have books printed in Hong Kong. The company ordered from Bahloo instead of ordering from a printer. It is claimed on behalf of the creditors that the applicant is the beneficial owner of the shares 'in Bahloo and that he ha» concealed his interest in that cerpany. He denies this and says his only relationship has been as an agent. In support of their assertions, the creditors relied on the evidence of Ian Robert Stevenson, now the Educational Publications Manager of David Syme & Co. Limited, but until recently the Managing Darectcr of L. & S. He says that in 1973 when Mr Cleary came to them asking them to undertake distribution of some of his products, he told Mr Stevenson he intended to set up a Fong Kong company to produce books or handle the Australian market and that Nr Cleary felt that there were a lot of advantages having a company located in Hong Kong, namely, access to extremely low cost printing, the tax rate and because it is a place used extensively to produce books. During the course of discvssions in 1978, at the time of his pending bankruptcy, 16. Mr Stevenson says he asked the applicant what he was going to do and how would he continue and the applicant said it did not concern him at all as he could stall trade and produce books in Hong Kong. The applicant told him that he owned the shares in Bahloo. In cross-examination Mr Stevenson was asked: - "Do you recall the words he used, the exact words®--- We were discussing his proposed activities for the future, and he said he had no worries about continuing to produce books. He said it was impossible to fine out who owned Banloo Publishing but that he ownec the shares in 1t, he was able to conduct the business and to continue to produce goods through it. , Are you sure he did not use words to the effect Bex he vas associated with that company?---He was more than associated with it, I have known it since the . day it started. I am suggesting to you that he indicated that he was associated with that company--~-i am afraid he did not I suggest to you that he used words to the effect that he had an interest in the company?---No." The applicant denies the conversations in 1973 and 1978. He asserts that his only relationship is as agent. (e) cr The creditors also rely on letters From him L. & S. These appear to relate to business L. & S. was doing vith the applicant involving Bahloo. It is claimed they ©. he regarded this business as part of his publishing business. For instance, in one of 3 October 1979, he wrote to Mr Stevenson.- "The last reprint delivery has been made toa you and 1t seems an ideal time to summarise where we both stand. Much has happened with me over the past year; it has been the most profitable period of 12 months ever! Not in turnover, but simoly cash profit and I'll certainly not hold my head down to anvone in Australian publishing - especially since it was done from scratch." 17. In the letter he also speaks of "one of my confirming houses in Hong Kong", 'There are other letters. Some are written by him on behalf of Bahloo Publishers Limited of Hong Kong, others are directly from himself. "us'' and is The correspondence, in parts,refers to "we" and perhaps not conclusively indicative of being 1n business on his own account particularly in view of the reference to Bahloo Publishers Limited. However, it does, in my vier, leave outstoanding the question of his relationship with that. company and there is left an impression that 1s at least consistent with the view that what he is doing on behalf of Bahloo he is really deing for his own benefit, Mz Stevenson says that, in October 1981, he visited ong Kong and attempted to ascertain the whereabouts of Bahloo. He visited the firm of John B.P. Byrne & Co. He was told at first there was no such company as Bahloo Publishers Limited registered there but after prevailing upon them they apparently admitted it. ITleasked if he could speak to somebody connected with it and he was introduced to a Mr Dennis Mee who said they had Bahloo registered there. Mr Stevenson's evidence then proceeded:- "I said would it be posszuble to talk to someone from the staff of Babloo and perhaps visit somebody from the company. They said there is nobody here in Hong Kong connected with the company AL1l the instructions are received from Australia. I asked who owned the company and they said they were not at liberty co tell me. [It was a nominee compuny. I said co you get your instructions from Mr Cleary. They said Mr Cleary is the only person we have ever dealt with in relation to the company." 18. . Mr Stevenson said he could not find Bahloo listed in the Hong Kong telephone directory. He agrecd that L. & S. had done business with Bahloo since the date of the applicant's bankruptcy i.e. in LY/79 and 1980 and that it was about $20,000 in value. Another aspect of the evidence which is relevant 1s the applicant's evidence that he has received amounts totalling $20,000 from Bahloo which he says was provided for use in the writing oF his books. The last payment made to him by Bahloo was in February 1980. The books in question are maths tent books for use in schools which come in a @ kit form. He says he has done work on them but it will be a considerable time before he obtains any remuneration from them. They have sections on computers and because no decision has been made about the computer system to be taught he has been unable to complete and sell them. Their preparation has involved travelling to the various states and conferring with officers of the education departments, In his affidavit he said he used the whole of the arount for writing books whereas in his oral evidence ) he agreed that a large part of it, possibly halZ, had been used for his owm support and upkeep at a time when he was fanding it difficult to get employment as a teacher. Ile also said that these loans were in the course of repayment. He explained this by saying that the preparation of the books had gone on and on and as they are still under preparation he had decided to pay back some oi the money. In all he has rcpaid something between $2,000 and $2,500. 19. The latest payment was $500 in May or June 1982. He said there had been no pressure on him to pay the amounts back and he started making payments in approximately Christmas 1981. Ile says he has had no discussion with anybody in Bahloo since December 1980 and he simply transferred the Funds through the bank to their account. He could not recall telling the Official Trustee about the repayment of these funds. As stated earlier, the applicant denies that he beneficially owns the shares in Bahloo. He apparently knows that the shares are held in trust but he does not know who the beneficiaries are. He says that the only sense in which he has an interest in Bahloo 1s that he wes acting as epent to get business with L. & S. The only positive evidence that the applicant has a beneficial interest in the shares of Bahloo 1s his alleged statement to Mr Stevenson. Having observed Ile Stevenson in the witness box, I find no reason to reject his evidence. He appears to have had a reasonably close relationship with the applicant in business. He also appeared to have a reasonably clear recollection of the substance of the conversations he had regarding the Hong Kong arrangements. He appeared to me to be an honest witness. The applicant on the other hand has admitted the untruth of some of his statenents. Even though these statements were made for purposes which he felt were 20. justified, I am not prepared to accept his evidence as reliable. In the face of the positive evidence of Mr Stevenson, I am therefore not prepared to accept, for the purpose of these proceedings, the applicant's denial of his interest in Bahloo. I am satisfied that he did say to Mr Stevenson that he owned the shares in Bahloo. ¢ does not follow from this that he in fact had or still bas such an interest but as I will indicate, his statement to Mr Stevenson is, I think, a relevant circumstance in deciding whether I should make an order of discharge at this stage. . @ I have already referred to the provisions of s.l50 sub-s.(6) and I am not satisfied that any of the matters specified in that sub-section have been established. It follc-?s from this finding that s.150(5) 1s not applicable and I am left to exercise the discretion conferred on me by s.150(9). Under that sub-section, in the events which have happened, [ must either make or refuse to make an order of discharge. In the light of the findings I have made, I have decided that I shovld, un the exercise of my discretion, refuse to make an order of discharge, @ In the ordinary course, 1t appears that unless an order is made by the Court under s.149(8) or (12), the applicant will be discharged, by operation of law, in June this year. I was asked by the creditors to make an order that the bankrupt should not then be discharged but on the evidence before me I am not prepared . ne —_— ee ee - ow eee me al. to do so. They, of course, would be at liberty to make a fresh application For such an order before June next 1f so advised. At the outset of the hearing, counsel For the Official Trustee indicated that his client proposed to take a neutral stance stating, in effect, that he was satisfied with the information provided by the applicant. However, during the heering counsel for the creditor, Wilke & Co. Limited, indicated thar his client was prepared to meet Fn the costs of further enquivies into the ownership ot the shares in Bahloo. At the conclusion of the hearing counsel for the Official Trustee indicated that his client's satisfaction related to the activities or transactions on the applicant's benk account and that, in the light of the ereditors' offar to meet costs, there were mattcrs that he wished to investigace further. lt 1s clear that the creditors have been aware for some time of the possible beneficial interest of the applicant in the shares of Bahloo and presumably were aware that he had noc revealed any interest in his statement of affairs. Mis examination was adjourned in September 19758 and no application has been made to have it continued or for the conduct of an examination under s.81 of the Act as to the shares in or the dealings of the applicant wit Banhloo. hese are all factors which might incline a court to make an order of discharge because it could be saied that there has been more than adequate time for the ereditors and the Official Trustee to investigate this matter. 22. . However, when a bankrupt applics for a discharge 1t is for him or her to satisfy the Court in the exercise of its discretion that an order should be made, Where the Court is not satisfied by the bankrupt that all substantial assets have been disclosed that is a strong rcason for refusing an order. Tn this case I am not satisfied with the applicant's explanation of the role of the company Bahloo in his affairs or of his relationship with it. The loans made to him by the company seen to point to the existence of something other than the ordinary relationship of principal and agent oven allowir; for the exigencies of the publishing trade. He has made @ repayments of these loans without any request for repayment - undeéd without any contact with Bahloo at all. In my opinion, the circumstances of these loans and their partial repayment are consistent with his having a relationship with the company much closer than that of an agent, for instance, as a person yho either controls it directly or indirectly or has a beneficial interest in it. When I add to this the evidence of Mr Stevenson, which I accept, that the apolicant told him he owned the oe and that as late as October 1981 a representative of the accountants, John B.P. Bryne & Co. told Mr Stevenson that the epplicant is the only person with whom that company has dealt with in relation to Bahloo, my doubts as to the true relationship betveen the applicant and Bahloo are confirmed. 7 te ty L Ka ; : zu yl ay =i { a a mow, 9 0 0 8 Le c ATO anise pn eh tee! A wes L, : 713 "44 09TTT , ¥ Hoe PhS ay jot , oucyj sty oi ince TfT,<a0 T 4 youy 7 TIL 'sy te] ' puv 'EMOIn}. Ol oy omy. 23. Therefore, notwithstanding the delay that has occurred, I have decided that it would not be proper to grant an order for discharge until the Court is either satisfied of the truce relationship between the applicant and Bahloo or until the trustee has had a further reasonable opportunity to make enquiries as to that relationship. The period between this date and his discharge by operation of Jaw should be sufficient to enable the Official Trustee to make those enquiries. Because the applicant, on anv viev, has a close association with the company, he should be able to assist the trustee in his enquirics. If the log truth 1s that he 1s not the beneficial owner of the sheres, 1t vould be in his interest to do so. If it appears, on further encuizies, that the bankrupt has an interest in the shares, 1t will be open to the trustee or the creditors to make an application for orders preventing his discharge by operation of law. It was alleged that the applicant has been guilty of fraud. On the evidence at present before me, I am not satisfied of this. In the exercise of my discretion, I have decided not to make any order as to costs in these vroceedings, except those of the Official Trustee. In the circumstances I think they should be paid by the bankrupt. I therefore order that.- 1. The application for discharge be refused. 2. The applicant pay the costs of the Officxzal Trustee.