IN THE FEDERAL COURT OF AUSTRALIA GENERAL DIVISION BANKRUPTCY DISTRICT THE STATE OF NEW SOUTH WALES AND THE AUSTRALIAN wwe eww SS CAPITAL TERRITORY No. w309 of 1980 RE: MILOSLAV ANTHONY KOLOMY EX PARTE: THE OFFICIAL RECEIVER ORDER Judge making order: Beaumont, J. Date order made: 18 October, 1983. Where made: Sydney. THE COURT ORDERS THAT: 1. The public examination of the bankrupt shall be deemed to have been concluded on 26 June, 1980. 2. I order the discharge of the bankrupt. 3. The operation of the order of discharge shall be suspended until 1 January, 1985. IN THE FEDERAL COURT OF AUSTRALIA GENERAL DIVISION BANKRUPTCY DISTRICT THE STATE OF NEW SOUTH WALES AND THE AUSTRALIAN ee ee ee eS CAPITAL TERRITORY No. W309 of 1980 RE: MILOSLAV ANTHONY KOLOMY EX PARTE: THE OFFICIAL RECEIVER CORAM: Beaumont, J. DATED: 18 October, 1983. REASONS FOR JUDGMENT This 1s an application for discharge from bankruptcy. The applicant was made bankrupt by a sequestration order made on 14 April, 1980. In 1981, the applicant applied for a dis- charge but was refused (see Re _ Kolomy (1981) 56 F.L.R. 157). The evidence then showed that the applicant had unsecured creditors in an amount exceeding $100,000 and negligible assets. McGregor, J. held that the application should be refused for a number of reasons. He referred to the circum- stance that the application was premature and relied upon the discreditable record of the bankrupt in commercial proceedings ' in coming to his conclusion that the application should be refused. He concluded his reasons as follows (at p.167): "In my view the application is, to say the least, premature. It would be inappropriate to grant a discharge to this applicant having regard to his commercial history, recent and otherwise which my attention has been drawn to and the nature of offences and comments which have been made, for example, by McClelland J. in the Industrial Commission concerning his conduct. He 1s not, at this time anyway, 'a proper person ... to be allowed to trade' (per Cave J. in Freeman's case). My decision would be the same 1f having regard to the meaning of 'fraud' in s.150(6) (h) it could be said that 'none of the matters specified in sub-s.(6) is established': see s.150(9). I consider that fraud' within the meaning of s.150(6)(h) has been established." The present position is that proved creditors in the estate now total $109,577, consisting in the main, of a debt owed to Mahel Investments Pty. Limzrted (In Liquidation) ("Mahel") in the sum of $97,357.00. There are no assets and no contrib- utions have been made to the estate. The applicant 1s now 62 years of age. He is divorced from his wife. He was formerly unemployed but in February, 1983 he left for Hong Kong and took up a position as a commission agent with Lepage Co. Ltd. On 26 November, 1982 objections to discharge of the bankrupt from bankruptcy by force of s.149(3)(c) of the Bankruptcy Act, 1966 ("the Act"), were entered by the liquidator of Mahel and the Corporate Affairs Commission. The ground of objection in each case was: "That the conduct of the bankrupt during the period before the date of bankruptcy has been unsatisfactory." mee Leave to enter the objections had been granted by the Court on 11 November, 1982. Neither objection has been withdrawn. The bankrupt becomes eligible for discharge from 'bankruptcy pursuant to the provisions of s.149(7) (a) of the Act subject to, sub-s.(11) on 14 April, 1985. In the application for leave to enter the objections to discharge, the applicant gave evidence by affidavit that attempted to explain away some of the misdemeanours relied upon by McGregor, J. 1n refusing his previous application for discharge. In particular, the applicant asserted that he was threatened by his partner on a number of occasions. The applic- ant said that these threats "completely unnerved" him and lessened his concentration on his business affairs. He said that as a new migrant he felt that he was "being stood over by a trickster in the American extortion style". He also said that, in the case of a number of the proceedings in which penalties or other orders were visited against him, he did not have legal representation or, 1n some cases, adequate legal representation. In the case of one of the criminal trials, he says that he could not afford legal representation and did not appreciate the con- sequences of pleading guilty. In an affidavit filed in this application, the applic- ant says that he desires to obtain a discharge for the reasons (inter alia) he has not told his employersthat he is bankrupt because he is fearful that they will react by terminating his employment and that his bankruptcy means that he is unable to obtain a credit card for use for travel in the course of his employment as a commission agent. The Official Receiver appeared at the hearing of this application. He tendered a letter from the solicitor for the Corporate Affairs Commission in which the Commission expresses the view that the application is still premature. The Official Receiver also referred to a letter from the liquidator of Mahel explaining that he lacked the resources to appear at the hearing of this application. In the result, the hearing before me was brief and no cross-examination of the applicant occurred. The applicant has now been bankrupt for a period ex- ceeding the statutory three year term. However, although his recent evidence goes some distance towards explaining the origins of his disastrous trading record, the explanations proferred hardly justify his conduct overall. Although the applicant was not cross-examined, I am not persuaded, even on his own evidence, that the applicant was by any means free of blame in the matters raised against him. On the other hand, he has already suffered the criminal penalties visited against him, and to some extent, it may be unfair 1f he were to be punished again on that account (see Re Martyn (1936) 9 A.B.C. 238 at p.241). At the same time, even 1f it be assumed that the applicant were to be acquitted, to some degree, of moral culpability in connection with the matters raised against him, it does not follow that he is entitled to an unconditional discharge. As Street, J. observed in Re Todd (No. 2) (1910) 10 S.R. 490 (at p.504), the function of the Court is not merely to relieveunfortunate debtors; it is an equally important part of its duty (inter alia) to protect the trading community and the public generally against persons who have shown themselves in the past to be unfit to trade. The case 1S a marginal one. In all the circumstances, I think that a discharge should be granted but, by reason of the unsatisfactory features of the case, it should be suspended for a significant period. I propose to order that the applicant be discharged from his bankruptcy but to suspend the operation of the order until 1 January, 1985. ! Certify that this an Pages are d the