"t ey IN THE FEDERAL COUPT OF AUSTRALIA GENERAL DIVISION BANKPUPTCY PISTPICT STATE OF WESTERN AUSTRALIA OF THI gupeENT No. AS 7 SB NOT INTENDFD FOR GFNEPAL DISTRIBUTION PO. 276 oF 1986 RP: GREGORY ALLAN TAVANYAR and SHAYNE MAPEF TAVANYAR Bankrupts UX PARTE: SHAYNE MAPEE TAVANYAR Applicant MINUTE OF ORDER JUDGE MAKING OPDER: FRENCH J. DATE OF ORDER: 19 JANUARY 1988 WHERE MADE: PERTH THE COURT ORDERS THAT: 1. The bankrupt, Shayne Maree Tavanyar, will be discharged but the discharge 1s suspended until 19 July 1988. NOTE: Settlement and entry of orders is dealt with in Rule 124 of the Bankruptcy Rules. IN THE FEDERAL COURT OF AUSTPALTA GENERAI DIVISION BANKRUPTCY DISTRICT OF THE STATE OF WESTERN AUSTRALTA NOT INTENDED FOR GRNEPATL, DISTRIBUTION NO. 276 OF 1986 RE: GREGORY ALLAN TAVANYAR and SHAYNT MAPEE TAVANYAP Rankrupts EX PARTUC: SHAYNE MAREE TAVANYAR Applicant CORAM: FRENCH J. 19 January 1988 EX TEMPORE RFASONS FOR JUDGMENT On 14 May 1386, Shayne Maree Tavanyar and her husband, Gregory Allan Tavanyar, both became bankrupt upon the filing of their debtor's petitions. This is an application by Mrs Tavanyar for discharge from bankruptcy. Her husband and she have separated and, although he has filed a 1like application, he does not appear today to pursue it. Their joint statement of affairs disclosed liabilities totalling $8,025 in the joint estate and $900 in the separate estate of Mr Tavanyar. No separate assets or liabilities were shown in the estate of Mrs Tavanyar. She owed $125 in respect to a secured creditor for a video recorder. Her husband owed $1,200 to a secured creditor for a motor vehicle. No proofs of debt have been received in the joint estate. One proof of debt was received in the separate estate of fy Mr Tavanyar for $2,239 heing for a shortfall following repossessior and sale of the motor vehicle. $99 was claimed in the senarate estate of Mrs Tavanyar being a shortfall arising from repossession of the video recorder. Realisations in the joint estate totalled $9.74 and there were no realisations in the separate cstates. There have been insufficient funds to pay either official fees and costs of the administration or to enable payment of any dividend. Mz and Mrs Tavanyar were living in Port Hedland at the time they became bankrupt. She was 29 years of age and he was 30. She says she was then working as a hairdresser earning about $240 a week after tax and that her husband had been earning about $220 a week after tax, prior to his hospitalization upon diagnosis of diabetes in March or April 1986. The history of relevant financial dealings as set out in the Official Trustee's report shows that on 8 August 1985 Mr Tavanyar had obtained a loan from Esanda for $13,341.60 for the purchase of a Suzuki Sierra motor vehicle. The agreement provided for repayments of $222.36 per month over a period of 60 months. On 18 September Mrs Tavanyar had obtained finance from Esanda for $637 for the purchase of a video, requiring repayments of $53.09 a month over a period of 12 months. Significantly, for present purposes, on 14 January 1986, the Tavanyars obtained a personal loan of $4,000 from the National 3. Australia Rank. However, in March 1984 Mr Tavanyar became ill. He was diagnosed as being diabetic and was put off work until his condition stabilized. The bankrupts fell into arrears and only two payments of $153.60 each were made in relation to the National Austral1la Bank loan. The conduct of hoth Mr and Mrs Tavanyar prior te the date of bankruptcy 1s said, by the Official Trustee, not to have been satisfactory in that they obtained their loan from the National Australia Rank by stating that the funds were to be used to purchase furniture. It 1s said they used those funds to pay outstanding accounts which were not disclosed on the loan application form. A form of intention to oppose the application for an order of discharge has been filed by the National Australia Bank. It 1s also said that at the time they took out the loan the Tavanyars were unable to meet existing debts and therefore, could not have had any reasonable or probable ground of expectation of being able to pay the debt. At the time, Mr Tavanyar was said to be earning $1,100 net per month. His loan repayments to Esanda were $257 per month. Repayments for the additional loan to the bank were $154 per month. The Official Trustee contends that the obtaining of the credit constitutes sufficient reason under para.150(6)(c) for the refusal or suspension of an order of discharge. 4. Mrs Tavanyar yave sworn evidence in support of her application ane the princinal reason for LE anneacs to he that she 1s nresently on a supportine parent's henefit Looking after children aged 11 and 9 vears. She 15 tn a Homeswest rental home at the moment, Lut some time ago she and her husband bad put their , di names down for e Homeswest nurchase. The onportunity to obtain home nurchase finance From Honesvest arose recently. Fomeswest however, has a policy of net makhinq the purchase facility avallabie +9 nersons who are undischarged bankrupts. Tt is in order to enable herself to have the opportunity to acquire a Homeswest home that Mrs Tavanyar makes the application for discharge. Although initially 1t was intended that the purchase would be mace with her husband, the couple have separated and Mrs Tavanyar now wishes to pursue that course on her own account. Mrs Tavanyar was shown and identified photocopies of the loan application forms in connection with the National Bank of Australia loan. Those forms disclosed the stated purpose of the loan was to "purchase furniture". According to Mrs Tavanyar, she and her husband did inform the person with whom they were dealing at the time, that they also wished to use the money to pay off some debts. Indeed, she went further and said that they informed the bank official that 1f£ they did not pay off the debts they were facing court action. I find it surprising that the bank would have been prepared to advance moneys to them unsecured, when they were facing the possibility of court action in respect of other unpaid debts. If anything would have been a clear indicator of 5. the difficulties facinq them, this would, yet there 1s no indication on tke loan @pnplication forms that they were in any financial difficulty. Indeed, the bank officer's comments at page 4 of the application forms are as follows:- "Annlicants came to Port Hedland with nothing 15 months avo - have nov some assets behind them and = both working." The redit and employer checks are also noted on the application form. It 1s obvious that there was a check of Dun and Bradstreet and the notation is "no adverse". It is quite extraordinary that the application form contained no reference to pending court action for unpaid accounts. The other aspect that causes concern 1s that in that part which relates to the statement of assets, furniture 1s shown valued at $14,000. The designation "Iv" referring to insurance value is entered next to it. Yet in her sworn evidence, Mrs Tavanyar has said that the furniture they had at the time was really nowhere near that value. Quite apart from the question of the statements made to the bank at the time that the loan finance was obtained, is the question whether or not Mr and Mrs Tavanyar and in particular, Mrs Tavanyar, contracted this debt without having at the time of contracting it, any reasonable or probable grounds of expectation of being able to pay 1t. Now she gave evidence in which she said that they believed that if they both continued in employment, they were in a positron to meet the repayments to the National Bank. Of course, the fact 1s, that they did mak® the first two repayments. It was, however, aA marcinal exercise as can be qathered from a calculation of their then existing commitments together with a reascnable estimate for housekeeping costs which must have taken their cutgeings well over $1,100 a month before having to cone with the bank and with electricity and other living expenses. If I find that Mrs Tavanyar did contract a debt provable in bankruptcy without having, at the time of contracting it, any reasonable or probable grounds of expectation of being able to pay 1t, then my power to deal with this application 1s confined to either refusing to make the order for discharge or making an order for discharge but suspending its operation. It seems to me that the critical point with respect to the application of para. 150(6)(c) is that the onus lies on the bankrupt to demonstrate that at the time of contracting the debt she had such grounds . Having regard to her sworn evidence today, I am not satisfied that she and her husband did enter into their arrangement with the Bank with reasonable or probable grounds of expectation of being able to repay the debt after taking into consideration their other liabilities. Even if the conduct under para.(c) were not made out, I am satisfied that there was a degree of misleading of the bank at the time that the application was made for the loan which played a significant role in the bankruptcy. It is sufficient to satisfy 7. me that in the interests of the public and commercial morality, 1t would be inappropriate at this stage to grant an unconditional and immediate discharge. On the other hand, I tak? into account the fact that Mrs Tavanyar 18 a supporting mother looking after two small children and hoping to make a better life for herself and for them in the future. That hope can be substantially realised if she has an Opportunity to purchase a home for herself, rather than being at the mercy of the rental market. Therefore, although I am of the view that I am unable to give her a discharge today and indeed, would not in any event, think tt right to give her a discharge today, I will make an order for a suspended discharge. In the circumstances, I think that the appropriate order 1s that the bankrupt be discharged but the discharge be suspended for a period of six months, that is until 19 July. I certify that tte preceding seven (7) pages are a true copy of the Peasons for Judqment of his Honour Justice French. Associate: Aer mn. VES ose tye Date: i q Jeu Lente "| / i) x¥ Mrs S. Tavanyar appeared on her own behalf. Mr F.D. O'Driscoll appeared for the Official Trustee. Date of Hearing: 19 January 1988 Date of Judgment: 19 January 1988