Re Davison, Cheryl Patricia Ex Parte Davison, Cheryl Patricia [1996] FCA 948

NOT FOR DISTRIBUTION IN THE FEDERAL COURT OF AUSTRALIA ) GENERAL DIVISION ) No. QB 2453 of 1996 BANKRUPTCY DISTRICT OF THE ) STATE OF QUEENSLAND ) RE: CHERYL PATRICIA DAVISON EX PARTE: CHERYL PATRICIA DAVISON MINUTES OF ORDER JUDGE MAKING ORDER: Spender J DATE OF ORDER: 14 October 1996 WHERE MADE: Brisbane THE COURT ORDERS THAT: 1. The bankruptcy of Cheryl Patricia Davison is annulled. NOTE: Settlement and entry of orders is dealt with in Rule 124 of the Bankruptcy Rules.

IN THE FEDERAL COURT OF AUSTRALIA ) GENERAL DIVISION ) No. QB 2453 of 1996 BANKRUPTCY DISTRICT OF THE ) STATE OF QUEENSLAND ) RE: CHERYL PATRICIA DAVISON EX PARTE: CHERYL PATRICIA DAVISON CORAM: Spender J DATE: 14 October 1996 PLACE: Brisbane REASONS FOR JUDGMENT This application raises circumstances which are not common, but which are understandable. Mrs Cheryl Patricia Davison presented her own petition on 24 July 1996. The statement of affairs which accompanied that petition showed that she had cash of $127.00 and an expected tax refund of $391.00, making her total assets $518.00. It appears the only creditor of any kind, apart from her mother, is the Department of Social Security ("the Department") to whom she owes $5,789.58. This amount is owed in relation to the overpayment of benefits. It is apparent from those short facts that the basis of the presentation of the debtor's petition was a belief by Mrs Davison that her bankruptcy would ameliorate her position in relation to the Department. She is employed as an assistant nurse at a nursing home with a gross income of $882.94 a fortnight. She is not liable to contribute to her estate according to the report by Charles Andrew Smith, the Acting Senior Assistant Official Receiver who prepared a report dated 3 October 1996 concerning Mrs Davison's bankruptcy. There is one feature which is of some concern. Mrs Davison presented her own petition on 15 February 1993 jointly with her husband from whom she is now separated. The bankruptcy number of that bankruptcy is QB 301 of 1993, and the Official Trustee in Bankruptcy is the trustee of her estate. Pursuant to s 149ZF of the Bankruptcy Act 1966 ("the Act"), Mrs Davison was granted an early discharge from the earlier bankruptcy on 15 March 1995. The fact that she has received an early discharge has a significance in relation to her prospects of discharge from the present bankruptcy if that bankruptcy is not annulled. The fact of her being bankrupt previously in ten years means that she is not eligible for early discharge. Notwithstanding what seems to be an omission contrary to the provisions of s 267(1)(b) of the Act in failing to disclose the fact of her previous bankruptcy in her statement of affairs, it seems to me that this was the result of inadvertence and more because of a misunderstanding of her legal obligations, and was not done in any way to mislead or deceive anybody. I think that petition was presented by Mrs Davison on a fundamental misunderstanding of its function and consequences, and that on a proper appreciation of the consequences for her of the presentation of the petition and on receiving proper advice, she would not have presented that petition. In that sense it seems to me that the petition ought not to have been presented. It serves no useful function either from the point of view of Mrs Davison or from the point of her creditor, the Department. That Department has open to it means of recovery despite her bankruptcy, and, as I understand the matter, there is an agreement in place between Mrs Davison and the Department concerning not only the paying of some sums towards her debt but as to the quantum of that debt as well. No prejudice to any person would flow from my annulling the bankruptcy. It seems to me in the rather sad circumstances of this case, I ought to make an order annulling her bankruptcy pursuant to the powers conferred on the court by s 153B of the Act. The order of the court is the bankruptcy of Cheryl Patricia Davison is annulled. I certify that this and the preceding two (2) pages are a true copy of the reasons for judgment herein of the Honourable Justice Spender. Associate Date: 14 October 1996