JUBQMENT Io. 060 /. Si. IN THE FEDERAL COURT NOT INTENDED FOR GENERAL DISTRIBUTION OF AUSTRALIA GENERAL DIVISION BANKRUPTCY DISTRICT OF THE STATE OF WESTERN AUSTRALIA NO. 327 OF 1987 RE: BRIAN JOHN SCRIVENER and JEANETTE YVONNE SCRIVENER formerly known as FLANNERY Bankrupts EX PARTE: JEANETTE YVONNE SCRIVENER formerly known as FLANNERY Applicant MINUTE OF ORDER JUDGE MAKING ORDER: FRENCH J. DATE OF ORDER: 23 NOVEMBER 1987 WHERE MADE: PERTH THE COURT ORDERS THAT: 1. The composition in terms of the resolution passed at the creditors' meeting held on 7 October 1987 is approved. 2. The bankruptcy is annulled. Note: Settlement and entry of orders is dealt with in Rule 124 of the Bankruptcy Rules. ane en —~<—-—~ >. TY 7 weer pene nae sp oer ey eee 2. The background history as outlined in the official Trustee's report, indicates that when they became bankrupt Mr and Mrs Scrivener were aged 33 and 27 years respectively and had two dependent children, aged 5 and 2. In July 1982 Mr Scrivener had been discharged from the RAAF and gained employment with Greyhound Coaches as an interstate coach driver. From then until November 1984 he held various positions as an employee. Mrs Scrivener was employed as a dental nurse until July 1983. , In December 1984 the Scriveners purchased a house in Merredin for $30,000 secured by mortgage in favour of the Defence Service Homes Corporation. In 1985 they obtained a personal loan of $11,280 to consolidate existing debts and to purchase a Suzuki motor bike. Wirth a view to commencing a business as cartage contractors they bought a 1979 Kenworth K124 prime mover in February 1986 under a lease agreement with Esanda Finance Corporation Limited for total repayments of $95,128. These were to be made by instalments of $1,606.83 per month over a period of four years with a residual value of $18,000. They were secured by a second mortgage over their house. The Scriveners began operating their new business in partnership together. However, the prime mover which they had purchased broke down on numerous occasions and the repairs required resulted in loss of earnings which left insufficient income to meet the lease repayments. 3. the problem with the prime mover is the principal cause to which Mrs Scrivener attributes the bankruptcy. It is also accepted as such by the Official Receiver. In August 1986 the Scriveners allowed another person to operate the truck on the understanding that he would meet the costs and lease repayments. Mr Scrivener obtained employment as a truck driver with a firm in Merredin. However, the payments were not kept up and in September 1986 the truck was repossessed and sold for $45,000, leaving an after-sale deficiency under the terms of the lease of $35,664. In February 1987 they moved out of their Merredin property and rented it, using the rental income to pay for accommodation in Busselton. Mr Scrivener was employed in various positions between August 1986 and May 1987 but they were unable to meet their commitments and decided to file their petition in bankruptcy. On 21 June Mr Scrivener died and his widow has continued looking after their children. On 7 October 1987, a general meeting of creditors was convened to consider a proposal for a composition which, as put at the meeting, was in the following terms:- nae ke ore ap rec cp acricss coer "~ 4. "the bankrupt would pay sufficient funds to cover a dividend of 50 cents in the dollar in full satisfaction of her provable debts after payment firstly of all the proper costs, charges and expenses of and incidental to the proceedings and all fees payable to the Official Trustee in Bankruptcy and secondly all priority debts directed to be so paid under the Act." Those present at the meeting assented unanimously to the proposal and a special resolution was carried accordingly. The bankrupt had already made a payment of $20,000 to the Official Trustee and this is held in the Common Investment Fund. I am informed by the Trustee that this payment, together with payments already made, will allow for a dividend of 50 cents in the dollar to creditors after payment of fees and expenses. Approved creditors total $15,500. Having regard to the overall position of Mrs Scrivener's estate and the joint estate as disclosed in the Official Trustee's report, I have no doubt that the proposal is, as he says, for the benefit of the general body of creditors and that 1t should be approved. So far as annulment of the bankruptcy is concerned, such an order is not made as a matter of course following the approval of a composition. Considerations of public interest and commercial morality have to be taken into account in exercising the Court's discretion. In this case there is no reason of that character in the way of annulment. The circumstances which led to woe ee 2 TE tener re ae ee eee oe od aan ym ne a. weee 5. the financial difficulties experienced by the Scriveners appear to have been due to events largely beyond their control. I have regard also to the Official Trustee's characterisation of the offer of composition as a generous and beneficial one in the circumstances, using as it does the proceeds of life insurance which became available after the death of Mr Scrivener. In my opinion, there is, therefore, no reason at all why I should not make an order annulling the bankruptcy and it is the appropriate order in these circumstances. I will therefore order:- 1. The composition in terms of the resolution passed at the creditors' meeting held on 7 October 1987 is approved. 2. The bankruptcy is annulled. I certify that this and the preceding four (4) pages are a true copy of the Reasons for Judgment of His Honour Justice French, Associate: Belew Uy ote pate: Qd Noms 19§7. Counsel for the Applicant: Mr M. de Kelcoy Solicitors for the Applicant: Kott Gunning Mr F. D. O'Driscoll appeared for the Official Trustee. Date of Hearing: 23 November 1987 Date of Judgment: 23 November 1987 aisied nen Ae S aeteneiamnars per ee ee eee ee ste,