see -- oy Be | JUDGMENT No. ASE... senesneevese IN THE FEDERAL COURT OF AUSTRALIA BANKRUPTCY DISTRICT OF THE STATE No. W 450 of 1977 OF NEW SOUTH WALES AND THE eae aad AUSTRALIAN CAPITAL TERRITORY Re: DAVID HOLROYD HARDWICK Ex parte: DAVID HOLROYD HARDWICK Applicant CORRIGENDA Amendment to the judgment of his Honour Mr Justice Morling of 4 April 1984 - page 3, line 22 "Official" altered to "registered" Kore Eb LY A. E. KNIG 2 May 1984 ASSOCTATE TO MORLING J, 22 APR 1998 FEDERAL COURT OF [e: SWORDS Bankruptcy - application for discharge - unresoived question about interest of bankrupt in land - money advanced to bankrupt - whether a debt or a gift - whether appropriate to withhold order of discharge - matters upon which court to be satisfied before making order Bankruptcy Act 1966, 3. 149, s. 150(5), (6)(b), (c) Re: Wi HOLRO | Ex parte: DAVID HOLROYD HARDWICK, Applicant No. W450 of 1977 Morling J. 4 April 1984. Sydney. IN COURT OF AUS ) ) BANKR' DE IcT OF THE STA' ) ) No. W 450 of 1977 OF NEW SOUTH WALES AND THE ) ) aus CAPI TTORY ) _Re: VID _HOLRO WICK Ex parte: DAVID HOLROYD HARDWICK Applicant MORLING J. 4 April 1984 ONS JUDGMENT. Tnis is an application for discharge from bankruptcy by Mr David Holroyd Hardwick. A sequestration order was made against his estate on 10 August 1977 upon the petition of Mercredits Finance Limited. An objection in accordance with s. 149 of the Bankruptcy Act, 1966, in the form it then took, was lodged by the Official Trustee in Bankruptcy. Accordingly the automatic discharge from bankruptcy, which otherwise would have eventuated had the objection not been lodged, did not occur. The objection has still not been withdrawn but should I make an order of discharge on this application, which ts brought under s. 150 of the Act, the objection will lapse by virtue of the provisions of s. 149(11) of the Act. I do not think that the unresolved question abcut the NWindang land should be treated as a factor militating against an order of discharge. It is plain that even if the bankrupt is discharged it will be competent for his trustee to pursue any action that he thinks may be productive in respect of the land. The bankrupt gave oral evidence before me on this matter and on the material before me he does not appear to have any interest in the land. In making that observation I am not in any way expressing any concluded view on the matter. I make it only to reinforce the observation I have already made that I donot think the outstanding question should be seen as justifying the withholding of an order of discharge. It is plain that the bankruptcy arose out of improvident and unfortunate business dealings by the bankrupt. There is nothing in those dealings which indicates any gross commercial misbehaviour by the bankrupt. The Official Trustee has drawn to the court's attention the fact that in 1976 this court found that the bankrupt's administration as trustee of the assigned estate of one Alafaci was negligent. At that time the bankrupt was an Official Trustee, his profession being that of accountant. However, the circumstances surrounding his failure to properly administer that estate do not warrant the refusal of his application for discharge. 5. In the first of his two reports the Official Trustee has reported that the bankrupt kept records which were sufficient for the type of busness which he conducted. He has also reported that the conduct of the bankrupt during his bankruptcy has been satisfactory. It is now over six years since the bankrupt's estate was sequestrated and he not unreasonably wishes to obtain a discharge. There is evidence before me that he is embarrassed in the social and religious circles in which he moves by the fact that he is a bankrupt. I accept that this may well be the case. I would have no difficulty at all in granting this application were it not for the fact that the Trustee had reported matters (b) and (c) under s. 150(6) of the Act. Sub-sections (5) and (6) of the Act provide in part as follows: "(5) The Court shall, if any of the matters specified in sub-section (6) is established - (a) refuse to make an order of discharge; or (Bb) make an order of discharge but suspend the operation of the order as the Court thinks proper, either unconditionally or subject to conditions. (6) The matters upon the establishment of which the Court may exercise the powers specified in sub-section (5) are as follows: (a)... (b) that the bankrupt has, after knowing himself to be insolvent, continued to re ct LN A However, Ido not think that concludes the question whether the court should he satisfied, to the necessary degree of satisfaction, with proof of the matters referred to in the subsection. It is clear from Mr Boyd's evidence that he was on terms of close friendship with the bankrupt. He says that he and the bankrupt had common church, cultural, social and sporting interests. I should at this stage say that the bankrupt is a member of the Reorganized Church of Latter Day Saints, as is Mr Boyd, and they appear to have strong common ties. The impression I have from Mr Boyd's evidence is that he did not require payment of the loan until such time as the bankrupt would be able to pay. I think that whilst the transaction was very close to agift it was legally a loan. Nevertheless, it is necessary to have regard to the terms of repayment and although no terms were stipulated in the ordinary sense I think it is a fair inference from Mr Boyd's evidence that the loan was not to be repaid whilst ever the bankrupt had other debts which he could not pay. The bankrupt's affairs at the time he obtained the loan from Mr Boyd were complicated. It ig true that during the course of his public examination he apparently made an admission that he was insolvent. However, he has explained in some detail in his affidavit supporting his applcation facts which might be thought to cast some doubt upon whether that admission was necessarily correct. 9. been known that the Official Trustee was being represented by counsel and that all matters which should properly be drawn to the attention of the court would indeed be brought to its attention. I therefore make no order in respect of Mr Balcyck's costs. The order of the court is that the applicant is discharged from bankruptcy. tact thas and +