JUDGMENT No. 4:22.42 8 sane NOT FOR DISTRIBUTION CATCHWORDS BANKRUPTCY ~ discharge - application 10 months prior to expiry of statutory period - reason to obtain credit to buy tools of trade - large debts - no dividend ~- no contribution - application dismissed. Bankruptcy Act 1966 RE: PAULS KARLIS VILIPS EX PARTE: PAULS KARLIS VILIPS NO. 381 OF 1986 FRENCH J. PERTH 8 AUGUST 1988 IN THE FEDERAL COURT ) OF AUSTRALIA ) GENERAL DIVISION ) BANKRUPTCY DISTRICT ) OF THE STATE OF ) WESTERN AUSTRALIA ) No. 381 of 1986 RE: PAULS KARLIS VILIPS Bankrupt EX PARTE: PAULS KARLIS VILIPS Applicant MINUTE OF ORDER JUDGE MAKING ORDER: FRENCH J. DATE OF ORDER: 8 AUGUST 1988 WHERE MADE: PERTH THE COURT ORDERS THAT: 1. The application will be dismissed. Note: Settlement and entry of orders is 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 No. 381 of 1986 RE: PAULS KARLIS VILIPS Bankrupt EX PARTE: PAULS KARLIS VILIPS Applicant CORAM: FRENCH J. 8 AUGUST 1988 EX TEMPORE REASONS FOR JUDGMENT Pauls Karlis Vilips became bankrupt at the age of 26 years on 1 July 1986. At the date of his bankruptcy he was employed as a roof carpenter, in receipt of a wage of about $300 a week. He paid rent of $85 a week, and maintained two hire-purchase agreements, one ona motor car and the other on a boat, with Associated Midland, representing a combined commitment of $152 per week. His background history, as indicated by the official receiver's report, which is not contested in any relevant respect, indicates that although a roof carpenter by trade, in 1981 he injured his arm while playing sport and as a result of this it was in plaster for some three months. During the following 18 months Mes Ge, yo ae re ye ne he worked intermittently as a salesman, and during that time tried to repay debts, including commission write—backs. From August 1982 until February 1984, he worked for Stokes Music as a salesman on a $180 per week retainer, with commission. In February 1984 he set up a company, Ruddock Pty Ltd, with Ross Leslie Grafton and himself as directors. Each contributed $4,000 with the aim of selling musical instruments on consignment under the name "Perth Keyboard City". After eight months of trading they had incurred debts of about $20,000. Grafton was bought out of the business for about $3,000 and the bankrupt's mother took his place as director. Their 1984/85 turnover was somewhere between $350,000 to $400,000, but the bankrupt's salary amounted to only $19,000. In November 1985 the company opened a shop in Carnarvon called "Carnarvon Music Academy. Stock had previously been sold on consignment to finance companies and, according to Mr Vilips, consignment sales were discontinued and a floor plan scheme entered into with Tokai Australia, a keyboard supplier. The company ceased trading on 30 June 1986. During its operations the company incurred $13,000 of debts and possessed only minimal assets. Due to pressure from creditors who had received personal guarantees from the bankrupt, he filed his debtor's petition on 1 duly 1986. Since bankruptcy Mr Vilips has held a number of jobs as a carpenter and has worked as a croupier at Burswood Island Casino. In August 1986, he sold the motor boat for $10,682. The ——— proceeds of that sale went to Associated Midland. In September 1986, the nominal equity in a Mazda 929 was sold to him for $25 and in September the following year he sold that car to pay out what he owed to Associated Midland, leaving hima surplus of $1,500 which was used to purchase a 1974 Holden utility said to be necessary for his trade as a carpenter. Mr Vilips has not at this point made any contributions to his estate. The financial summary shows assets disclosed in the statement of affairs totalling $570; liabilities amounting to $29,803, with an additional $6,342 of known creditors. Proofs of debt were not requested, but one has been lodged for $180. Realisations amount to $25. He seeks a discharge to enable him to obtain, on credit, certain tools of trade, which, he says, he needs to perform efficiently as a carpenter. The tools are to replace some stolen from his utility which were not covered by insurance. The goods he now wants to purchase include a generator, at a cost of $1,200; a drop-saw of $600; and saw tools. He also wants to acquire a lock-up trailer at $800. He says that at the moment he' cannot work effectively as a sub-contract carpenter without tools of this kind. He was, until recently, employed in Queensland, earning about $300 per week as a carpenter, but returned to Perth because it was his home and because he found the living expenses in Queensland high. one Mr Vilips presently owns the 1974 Holden utility which he purchased with the surplus from the sale of the Mazda 929. He says that without the tools he does not seem to be getting anywhere, and that wages work is difficult to get. This application does not paint a particularly impressive picture. The liabilities total in excess of $30,000. There is virtually nothing in the estate. There have been no contributions made. I do not criticise Mr Vilips for that because it may well be, as he said, that the work he has been able to obtain has not left him sufficient surplus to make any contributions, although I do note that he is single and has no dependents. He seeks discharge to enable him to enter into credit arrangements to a total of about $3,000 to purchase additional equipment for the purposes of conducting his business as a self-employed carpenter. Discharge is not lightly given by the Court where sought before the expiry of the statutory 3 year period. In these circumstances, it seems to me that the public interest would not be served by such an order. Mr Vilips essentially seeks release from bankruptcy in order to enable him to enter into further credit transactions, and, of course, he would not be limited to the particular transaction that he has indicated. In my opinion, having regard to the substantial debts that were incurred, the almost total absence of any assets, and the absence of even a minimal contribution to the estate, the public interest is best served in letting the bankruptcy run its een course, which would take it to another 10 months, that is, to July 1989. The application will be dismissed. I certify that this and the preceding four (4) pages are a true copy of the Ex tempore Reasons for Judgment of his Honour Justice French. Associate: DAT Kewe Date: ¥ F SF Mr P.K. Vilips appeared in person. Mr F.D. O'Driscoll appeared on behalf of the Official Receiver. Date of Hearing: 8 August 1988 Date of Judgment: 8 August 1988 Le ree er ee en ree rr ce wpe nee ae