CATCHWORODS BANKRUPTCY - application for discharge - bankrupt solicitor - desire for full practising certificate - role of Law Society - test to be applied. Bankruptcy Act, 1966 s.150 Re: John Thomas Tunn Ex Parte: The Bankrupt Qld. E214 of 1984 PINCUS J. BRISBANE 11 JUNE 1986 ~; rieD 42 SUN 8S "RAL COURT OF FEO NSTRALIA PRINCIPAL IN THE FEDERAL COURT OF AUSTRALIA ) GENERAL DIVISION ) QLD E214 of 1984 BANKRUPTCY DISTRICT OF THE SOUTHERN ) DISTRICT OF THE STATE OF QUEENSLAND ) RE: JOHN THOMAS TUNN EX PARTE: THE BANKRUPT MINUTES OF ORDER JUDGE MAKING ORDER: PINCUS J. DATE OF ORDER: 11 JUNE 1986 WHERE MADE: BRISBANE THE COURT ORDERS THAT: l. The application for an order of discharge from bankruptcy be dismissed. NOTE: Settlement and entry of orders is dealt with in 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 QUEENSLAND ) RE: JOHN THOMAS TUNN EX PARTE: THE BANKRUPT PINCUS J. 11 JUNE 1986 REASONS FOR JUDGMENT This is an application for an order of discharge from bankruptcy. The applicant, J.T. Tunn, was made bankrupt on 13 April 1984 on a creditor's petition and has somewhat less thana year to go before he would be discharged by effluxion of time. The applicant is a young solicitor who began practice seven years ago on the Gold Coast. His 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 experienced, 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 financial dealings which ultimately resulted in his being struck off the roll of solicitors. The applicant 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 addition 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. The trustee had difficulty obtaining a statement of affairs and only got one after repeated requests. The trustee had a similar experience with respect to preparation of tax returns. In summary, the conduct of the bankrupt was in other respects satisfactory. The applicant has made an affidavit in answer to what the trustee says, in which he explains that his defaults in relation to the trustee were due to his being preoccupied with investigations being carried out by the Queensland Law Society. According to the statement of affairs, the applicant'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 carried on at the Gold Coast. One of the reasons the applicant gave for his bankruptcy was free availability 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 exercise its discretion in favour of the granting of discharge order ... Whilst I agree with Toohey J. in Re Benda that an applicant need not show 'special Circumstances' to succeed, he or she must, in my opinion, show some cogent ground or grounds for the exercise of that discretion in his or her favouc. A mere dislike of being bankrupt - a consciousness of the stigma of bankruptcy, attaching to all bankrupts but felt more by some than by others - cannot of itself be enough." Apart from getting rid of the stigma of bankruptcy, the applicant seeks to be free again to practise on his own account as a solicitor. Counsel said, and I accept, that the Law Society has a function to perform in determining whether to give an unconditional practising certificate. I do not think, however, that the Court is entitled to treat as a matter for the Society determination of the question whether the applicant 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 question is entirely the Court's responsibility. The important aspects of the case are, in my view, that the applicant incurred substantial debts in a fairly short time and seems likely 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 him to have to accept subordinate status in his profession until next April (particularly as he appears to be very competent, at least in respect of his litigious work). But unless the Court is to adopt the practice of granting discharges in rather a routine fashion, such a case as this cannot, inmy view, qualify for an early discharge. The application will be dismissed. aAradiwes pre aa rn + certify that this andthe 5 "3 pages ara a true cery of the reacons "or judgment herein of His Honcur Mr Justice Pincus pocat Lyeno Associaté Dated // Space _ CBE