B94 IN THE FEDERAL COURT OF AUSTRALIA GENERAL DIVISION BANKRUPTCY DISTRICT OF THE STATF OF WESTERN AUSTRALIA NOT FOR GENERAL DISTRIBUTION No. 523 of 1985 RE: DUDLEY THOMAS FORDE PRFSTON Bankrupt EX PARTE: DUDLEY THOMAS FORDF PRESTON Applicant MINUTE OF ORDER JUDGE MAKING ORDER: FRENCH J. DATE OF ORDER: 22 JUNE 1987 WHERE MADE: Perth THE COURT ORDERS THAT: 1. That the bankrupt be discharged from bankruptcy, the discharge to be suspended until 23 September 1987, on the following condition. The condition 1s that the bankrupt undertake to the court not to carry on business as a partner in any partnership or as a director of any company or otherwise on his own account until 12 March 1988; provided that this undertaking does not prevent the bankrupt from engaging in casual manual labour. Note : Settlement and entry of orders 1s dealt with in Rule 124 of the Bankruptcy Rules. IN THE FEDERAL COURT OF AUSTRALIA GENERAL DIVISION BANKRUPTCY DISTRICT OF THE STATE OF WESTERN AUSTRALIA NOT FOR GENFRAL DISTRIBUTION No. 523 of 1985 RE: DUDLEY THOMAS FORDE PRESTON Bankrupt EX PARTE: DUDLEY THOMAS FORDF PRESTON Applicant CORAM: FRENCH J. 22 JUNE 1987 EX TEMPORE REASONS FOR JUDGMENT On 11 March 1985 Dudley Thomas Forde Preston, a pensioner of Stone Crescent, Darlington, filed his own petition in bankruptcy and thereby became a bankrupt. At the date of his bankruptcy he was a divorcee, aged 76 years with no dependants. He was in receipt of an old age pension of $213.00 pex fortnight and out of that he paid rental of $75.00 a week for his residence. He had been involved in real estate for some 17 years prior to the date of bankruptcy. The trustee's report discloses that his involvement was principally as the director of two companies, Preston Leonard Nominees Pty Ltd and Whit Pty Ltd. The companies were involved in the development, subdivision and sale of farmlets in the Busselton area. 2. Without going into detail, the company whit Pty Ltd, of which Mr Preston was a director, together with one Robert Nichovich, embarked upon a subdivision in or about 1980 which was unsuccessful following upon bad publicity and poor sales. In November 1982 the company purchased a retail furniture business for $55,000.00. In relation to that purchase Mr Preston and his daughter gave personal guarantees in respect of debts of some $10,000.00 owed by the vendors. Mr Preston says that the turnover of the business waS misrepresented to him. Shortly prior to acquisition of the business on 11 March 1983, Whit Pty Ltd sold its interest to Elster Pty Ltd, another company of which Mr Preston was a director. Aftex settlement he found that having managed the business for a short period, it ran down significantly and that weekly turnover represented to have been $4,250.00 was in fact only around $2,000.00. As a result, the business was sold after only two months to a creditor, T.V. Davidson Pty Ltd, for $13,070.00. The personal guarantee given by Mr Preston was satisfied at that time. He was, for lack of funds, unable to continue with legal proceedings which were issued on behalf of the two companies, by Mr Pxeston and his daughter, against the vendors of the business and their agents. . 3. Since the sale of the business Mr Preston has been mainly unemployed except for a perioda when he obtained part-time work as a real estate salesman. As a result of that unemployment a number of his assets were repossessed including a photocopier and two motor vehicles; 26 acres of property were sold by a mortaagee at Balvidis pursuant to the mortgagee's sale. This property had been acquired in 1981. In the event, he was unable to meet the demands of his creditors and filed his debtor's petition. In the statement of affairs he disclosed liabilities totalling some $80,497,00; of this sum $49,800,00 was said to have been a personal income tax liability. In the event, it appears that this was a significant over-estimate of his liability position as only some $22,000.00 of that amount was owed by him personally, the balance being income tax due by the children, beneficiaries under a trust distribution. Proofs of debt totalled some $25,073.00. Realizations have been nil and there are no unrealised assets. No funds have been received in the estate and the official fees have not been paid. A dividend has not been paid in the estate and there will be no surplus available for distribution to him. 4. The official trustee, in his report, indicates that Since bankruptcy Mr Preston's circumstances have not changed and he 1s st1ll in receipt of a pension. There has been no suqgestion that he has committed any offences in the bankruptcy or that his conduct prior to the date of the bankruptcy has been other than satisfactory. It also appears, and I am satisfied that there were no matters specified under para.150(6)(b) of the Bankruptcy Act which would of themselves provide sufficient reason for the refusal or Suspension of an order of discharge. In his affidavit in support of the application for discharge, Mr Preston says that his only source of income over the past year or so has been the pension and that he has no likelihood of again deriving further income. His total assets, he says, would not amount to more than $1,000.00 with a Savings account which fluctuates between $200.00 and $600.00. He is now 79 years of age and believes that 1f he could be discharged from bankruptcy he may be able to get a part-time job with a real estate firm and for that purpose he would need to acquire a reasonably reliable vehicle. He presently possesses what he describes as "a very old borrowed vehicle", which he feels is a liability when he seeks employment with real estate firms. 5. In the ordinary course, Mr Preston would be entitled to automatic discharge from his bankruptcy on 12 March 1988. An application for early discharge 1s not lightly to be entertained and it 1S important in such a case to have reqard to the considerations of the public interest and commercial morality. There 1s in this case no opposition either from the official trustee or from creditors who have been notified of the application, Having regard to the circumstances leading to the bankruptcy as have been outlined, the principal causes of that bankruptcy have been described as his involvement in_ the unsuccessful land development scheme at Busselton and_ the unsuccessful furniture retail business. I do not believe that there are any overwhelming considerations of public interest or commercial morality which would militate against discharge at a time earlier than the period of three years laid down by the statute. However, I do think it 1S important that Mr Preston not, at least for the balance of the period of three years, be entitled to participate in any business on his own account or as a director or partner. To achieve that end I propose to make an order of discharge which I will suspend for a short period and attach conditions limiting his ability to take part in any commercial enterprise on his own account until 12 March 1988. 6. I think in the circumstances that an appropriate period for the suspension would be some three months. I certify that this and the preceding five pages are a true copy of the Reasons for Judgment herein of his Honour Mr Justice French. - a Sek Associate: «ae Nee - nts pater AA Sorvwre WUE! Counsel: . the applicant appeared in person . Mr F.D. O'Driscoll for the Official Receiver. Date of Hearing: 22 June 1987 Date of Judgment: 22 June 1987 6. I think in the circumstances that an appropriate period for the suspension would he some three months. I certify that this and the preceding five pages are a true copy of the Reasons for Judgment herein of his Honour Mr Justice French. Associate: «2 Yo ¢ \G§ 1 Date: ao Svan Counsel: » the applicant appeared in person . Mr F.D. O'Driscoll for the Offic1al Receiver. Date of Hearing: 22 June 1987 Date of Judgment: 22 June 1987 IN THE FEDERAL COURT NOT FOR GENERAL DISTRIBUTION OF AUSTRALIA GENERAL DIVISION OF THE STATE OF ) ) ) BANKRUPTCY DISTRICT ) ) ) WESTERN AUSTRALIA No. 523 of 1985 RE: DUDLEY THOMAS FORDE PRFSTON Bankrupt EX PARTE: DUDLEY THOMAS FORDE PRESTON Applicant MINUTE OF ORDER JUDGE MAKING ORDER: FRENCH J. DATE OF ORDER: 22 JUNE 1987 WHERE MADE: Perth THE COURT ORDERS THAT: l. That the bankrupt be discharged from bankruptcy, the discharge to be suspended until 23 September 1987, on the following condition. The condition 1s that the bankrupt undertake to the court not to carry on business aS a partner in any partnership or as a director of any company or otherwise on his own account until 12 March 1988; provided that this undertaking does not prevent the bankrupt from engaging in casual manual labour. Note : Settlement and entry of orders 1s dealt with in Rule 124 of the Bankruptcy Rules. IN THE FEDERAL COURT OF AUSTRALIA GENERAL DIVISION BANKRUPTCY DISTRICT OF THE STATE OF WESTERN AUSTRALIA NOT FOR GENERAL DISTRIBUTION eee No. 523 of 1985 RE: DUDLEY THOMAS FORDE PRESTON Bankrupt EX PARTE: DUDLEY THOMAS FORDE PRESTON Applicant CORAM: FRENCH J. 22 JUNE 1987 EX TEMPORE REASONS FOR JUDGMENT On 11 March 1985 Dudley Thomas Forde Preston, a pensioner of Stone Crescent, Darlington, filed his own petition in bankruptcy and thereby became a bankrupt. At the date of his bankruptcy he was a divorcee, aged 76 years with no dependants. He was in receipt of an old age pension of $213.00 per fortnight and out of that he paid rental of $75.00 a week for his residence. He had been involved in real estate for some 17 years prior to the date of bankruptcy. The trustee's report discloses that his involvement was principally as the director of two companies, Preston Leonard Nominees Pty Ltd and Whit Pty Ltd. The companies were involved in the development, subdivision and sale of farmlets in the Busselton area. 2. Without going into detail, the company Whit Pty Ltd, of which Mr Preston was a director, together with one Robert Nichovich, embarked upon a subdivision in cr about 1980 which was unsuccessful following upon bad publicity and poor sales. In November 1982 the company purchased a retail furniture business for $55,000.00. In relation to that purchase Mr Preston and his daughter gave personal guarantees in respect of debts of some $10,000.00 owed by the vendors. Mr Preston says that the turnover of the business was misrepresented to him. Shortly prior to acquisition of the business on 11 March 1983, Whit Pty Ltd sold its interest to Elster Pty Ltd, another company of which Mr Preston was a director. After settlement he found that having managed _ the business for a short period, it ran down significantly and that weekly turnover represented to have been $4,250.00 was in fact only around $2,000.00. As a result, the business was sold after only two months to a creditor, 1T.V. Davidson Pty Ltd, for $13,070.00. The personal guarantee given by Mr Preston was satisfied at that time. He was, for lack of funds, unable to continue with legal proceedings which were issued on behalf of the two companies, by Mx Preston and his daughter, against the vendors of the business and their agents. 3. Since the sale of the pusiness Mr Preston has been Mainly unemployed except for a period when he obtained part-time work as a real estate salesman. As a result of that unemployment a number of his assets were repossessed including a photocopier and two motor vehicles; 26 acres of property were sold by a mortgagee at Balvidis pursuant to the mortqagee's sale. This property had been acquired in 1981. In the event, he was unable to meet the demands of his creditors and filed his debtor's petition. In the statement of affairs he disclosed liabilities totalling some $80,497,00; of this sum $49,800,00 was said to have been a personal income tax liability. In the event, 1t appears that this was a significant over-estimate of his liability position as only some $22,000.00 of that amount was owed by him personally, the balance being income tax due by the children, beneficiaries under a trust distribution. Proofs of debt totalled some $25,073.00. Realizations have been nil and there are no unrealised assets. No funds have been received in the estate and the official fees have not been paid. A dividend has not been paid in the estate and there will be no surplus available for distribution to him. 4. The official trustee, 1n his report, indicates that since bankruptcy Mr Preston's circumstances have not changed and he 1s still in receipt of a pension. There has beer no suggestion that he has committed any offences in the bankruptcy or that his conduct prior to the date of the bankruptcy has been other than satisfactory. It also appears, and I am satisfied that there were no matters specified under para.150(6)(b) of the Bankruptcy Act which would of themselves provide sufficient reason for the refusal or suspension of an order of discharge. In his affidavit in support of the application for discharge, Mr Preston says that his only source of income over the past year or so has been the pension and that he has no likelihood of again deriving further income. His total assets, he says, would not amount to more than $1,000.00 with a savings account which fluctuates between $200.00 and $600.00. He 1S now 79 years of age and believes that 1f he could be discharged from bankruptcy he may be able to get a part-time job with a real estate firm and for that purpose he would need to acquire a reasonably reliable vehicle. He presently possesses what he describes as "a very old borrowed vehicle", which he feels 1s a liability when he seeks employment with real estate firms. 5. In the ordinary course, Mr Preston would he entitled to automatic discharge from his bankruptcy on 12 March 1988. An application for early discharge is not liqhtly to be entertained and 1t 2S important in such a case to have reqard to the considerations of the public interest and commercial morality. There 1S in this case no opposition either from the official trustee or from creditors who have been notified of the application. Having regard to the circumstances leading to the bankruptcy as have been outlined, the principal causes of that bankruptcy have been described as his' involvement in_ the unsuccessful land development scheme at Busselton and_ the unsuccessful furniture retail business. I do not believe that there are any overwhelming considerations of public interest or commercial morality which would militate against discharge at a time earlier than the period of three years laid down by the statute. However, I do think it 1S important that Mr Preston not, at least for the balance of the period of three years, be entitled to participate in any business on his own account or as a director or partner. To achieve that end I propose to make an order of discharge which I will suspend for a short period and attach conditions limiting his ability to take part in any commercial enterprise on his own account until 12 March 1988. 6. I think in the circumstances that an appropriate period for the suspension would be some three months. I certify that this and the preceding five pages are a true copy of the Reasons for Judgment herein of his Honour Mr Justice French. - ° ee, Associate: ceo. WW wks is | Date: AX "Ss0 Counsel: » the applicant appeared in person » Mr F.D. O'Driscoll for the Official Receiver. Date of Hearing: 22 June 1987 Date of Judgment: 22 June 1987 6. I think in the circumstances that an appropriate period for the suspension would be some three months. I certify that this and the preceding five pages are a true copy of the Reasons for Judgment herein of his Honour Mr Justice French. - ye Ks Associate: <2 ee WY Date: wm a Counsel: » the applicant appeared in person . Mr F.D. O'Driscoll for the Official Receiver. Date of Hearing: 22 June 1987 Date of Judgment: 22 June 1987