Pekar v Holden

Case [2021] FCA 141

FEDERAL COURT OF AUSTRALIA

Pekar v Holden [2021] FCA 141 

File number: VID 614 of 2020
Judgment of: SNADEN J
Date of judgment: 26 February 2021
Catchwords:

PRACTICE AND PROCEDURE – application for summary judgment against the applicant – application for vexatious proceedings order pursuant to s 37AO(2) of the Federal Court of Australia Act 1976 (Cth) – whether application is an attempt to re-litigate the subject matter of previous actions – whether applicant is estopped from pursuing the relief that is sought – application of “Anshun estoppel” – whether application seeks to prosecute causes of action in respect of which there are reasonable prospects of success – whether applicant is a person who has frequently commenced vexatious proceedings – orders granted.
Legislation:

Bankruptcy Act 1966 (Cth) – s 104

Federal Court of Australia Act 1976 (Cth) – ss 31A, 37AM and 37AO

Federal Circuit Court of Australia Act 1999 (Cth) – s 88Q

Federal Court Rules 2011 (Cth) – r 26.01

Cases cited:

Pekar v Holden (Trustee) (No 2) [2019] FCA 1212

Pekar v Holden (Trustee) (No 3) [2019] FCA 1928

Pekar v Holden (Trustee) [2019] FCA 442

Pekar v Rickards Legal (No 3) [2017] FCCA 1196

Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589

Re Singh, in the application of Mohinder Singh [2020] FCA 213

Tomlinson v Ramsey Food Processing Pty Ltd (2015) 256 CLR 507

UBS AG v Tyne (2018) 265 CLR 77

Walton v Gardiner (1993) 177 CLR 378

Division: General Division
Registry: Victoria
National Practice Area: Commercial and Corporations
Sub Area: General and Personal Insolvency
Number of paragraphs: 39
Date of hearing: 18 February 2021
Counsel for the Applicant: The applicant appeared in person
Solicitor for the Respondent: Mr J. Blaskovic of Rothwell Lawyers Pty Ltd

ORDERS

VID 614 of 2020
BETWEEN:

FIMA PEKAR

Applicant
AND:

TIMOTHY MARK SHUTTLEWORTH HOLDEN

Respondent

ORDER MADE BY:

SNADEN J

DATE OF ORDER:

26 FEBRUARY  2021

THE COURT ORDERS THAT:

1.Pursuant to section 37AO(2)(b) of the Federal Court of Australia Act 1976 (Cth) (hereafter, the “FCA Act”), the applicant be prohibited from instituting in any registry of the Federal Court of Australia any proceedings other than proceedings instituted pursuant to section 104 of the Bankruptcy Act 1966 (Cth).

2.Pursuant to section 37AO(2)(a) of the FCA Act—or, alternatively, section 31A(1) of the FCA Act or, further alternatively, r 26.01 of the Federal Court Rules 2011 (Cth)—the matter be dismissed.

3.By no later than 4:00pm on Friday, 5 March 2021, the respondent file and serve written submissions of no more than two pages in length identifying any special costs order or orders that he urges the court to make (as well as the reasons why such an order or orders should be made).

4.By no later than 4:00pm on Friday, 12 March 2021, the applicant file and serve written submissions of no more than two pages in length in response to the respondent’s submissions on costs (if any such submissions are made).

5.Subject to receipt…

Continue reading Pekar v Holden

Sign in free to access the full text

Details
AGLC
Pekar v Holden [2021] FCA 141
Case
[2021] FCA 141
Decision Date

CaseChat Overview and Summary

In Pekar v Holden, the applicant, Pekar, sought relief against the respondent, Holden, who was the trustee of Pekar's bankrupt estate. The relief sought pertained to the administration of the estate and a sum of money paid from the estate. The Federal Court of Australia was tasked with deciding whether the proceedings were vexatious and if any orders should be made under s 37AO(2) of the Federal Court of Australia Act 1976 (Cth) to prevent future vexatious proceedings.

The court examined whether the application was an attempt to re-litigate previous actions and if Pekar was estopped from pursuing the relief sought. The court also considered whether the application sought to prosecute causes of action with reasonable prospects of success and if Pekar was a person who had frequently commenced vexatious proceedings. The court found that the proceedings were vexatious and granted orders to protect the respondent from future vexatious proceedings.

The court reasoned that the applicant's claims were absurd and had no basis in fact. The applicant sought criminal punishment for the respondent, which was beyond the court's jurisdiction in the present context. The applicant's claims were also precluded by the principle of Anshun estoppel, as they sought to re-litigate issues that had already been decided by the court. The court concluded that the application was vexatious and granted orders under s 37AO(2) of the FCA Act to prohibit the applicant from instituting any proceedings other than those pursuant to section 104 of the Bankruptcy Act 1966 (Cth). The matter was dismissed, and the court directed the parties to file written submissions on costs.

Orders

Orders of the court

1. Pursuant to section 37AO(2)(b) of the Federal Court of Australia Act 1976 (Cth) (hereafter, the “FCA Act”), the applicant be prohibited from instituting in any registry of the Federal Court of Australia any proceedings other than proceedings instituted pursuant to section 104 of the Bankruptcy Act 1966 (Cth).

2. Pursuant to section 37AO(2)(a) of the FCA Act—or, alternatively, section 31A(1) of the FCA Act or, further alternatively, r 26.01 of the Federal Court Rules 2011 (Cth)—the matter be dismissed.

3. By no later than 4:00pm on Friday, 5 March 2021, the respondent file and serve written submissions of no more than two pages in length identifying any special costs order or orders that he urges the court to make (as well as the reasons why such an order or orders should be made).

4. By no later than 4:00pm on Friday, 12 March 2021, the applicant file and serve written submissions of no more than two pages in length in response to the respondent’s submissions on costs (if any such submissions are made).

5. Subject to receipt of any submissions as above (and to objection otherwise from either party), the court will determine in chambers what order or orders as to costs ought to be made in light of these orders.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

For the reasons explored below in the context of summary judgment, the present matter comfortably qualifies as a vexatious proceeding for the purposes of s 37AO(2) of the FCA Act. I consider it appropriate to make orders protecting the respondent—and others, known or otherwise—from the prospect (if not the inevitability) of future vexatious proceedings. The respondent’s proposed order would have the effect of preventing the applicant from commencing in this court any proceeding other than one made under s 104 of the Bankruptcy Act 1966 (Cth). That exemption is appropriate and my orders will give effect to it.THE SUMMARY JUDGMENT APPLICATION As has already been recorded, the relief that the applicant seeks is bifurcated: in part, it relates to the manner in which the respondent administered the applicant’s bankrupt estate, before he was removed as its trustee (and, in particular, to the respondent’s breach of the Administration Contract); and, in part, it relates to a sum of money that the respondent paid from the applicant’s estate (before he was removed as its trustee). I will address the second of those two components to the applicant’s claim first. On 15 October 2018, the respondent, then trustee of the applicant’s bankrupt estate, paid the sum of $6,000 to the applicant’s former lawyers, Rickards Legal. That sum was paid in satisfaction of two costs orders that had been made against the applicant (amongst the many that have been over the last 13 years). On 3 March 2017, in a proceeding that the applicant commenced against Rickards Legal (proceeding MLG2171/2016), her Honour Judge Hartnett of the Federal Circuit Court of Australia made orders striking out a subpoena that the applicant had filed and ordering that his bankrupt estate pay Rickard Legal’s costs fixed in the sum of $1,000.00. On 7 June 2017, her Honour made the s 88Q(2) orders referred to above (at [15]), which included a related order requiring that costs fixed in the sum of $5,000.00 be paid to Rickards Legal out of his bankrupt estate. The respondent, as trustee of the estate, complied with those two orders on 15 October 2018, when the $6,000.00 was paid from the applicant’s estate to Rickards Legal. The applicant is of the view that that sum was never paid. He has formed that view in light of the respondent’s refusal to date to provide him with bank records proving, to his satisfaction, that the sum was in fact paid to Rickards Legal. He considers that the respondent’s affidavit testimony verifying the making of the payment (which annexes written confirmation from Rickards Legal of its receipt) was falsely sworn and that the money has, instead, been embezzled. For those reasons, he feels that the respondent should be criminally prosecuted for perjury (in respect of his testimony) and embezzlement (in respect of his retention of the sum). The applicant’s contentions are self-evidently absurd. He has nothing even approximating a proper basis for alleging as he does and the fact that he would air those allegations in the manner than he has speaks poorly of him. But more to the point, the relief that he seeks is light-years from anything that he has even the remotest chance of being granted. In the present context, this court has no jurisdiction to entertain allegations of criminal perjury or embezzlement. If, in the course of investigating a genuine cause of action, the court were alerted to facts that might warrant criminal investigation, it might take steps to have them brought to the attention of the appropriate authorities. But the potential referral is not, in itself, sufficient to ground a genuine cause of action. It is apparent, then, that insofar as he seeks to visit criminal punishment upon the respondent, the applicant’s claims are foredoomed to failure.

Ratio Decidendi

Legal Principle Established

From the submissions made, both orally and in writing, it is apparent that the applicant takes issue with the manner in which the respondent administered his bankrupt estate. This is not the first proceeding in which that administration has assumed prominence. It was the subject of this court’s attention in Pekar v Holden (Trustee) [2019] FCA 442 (Moshinsky J), Pekar v Holden (Trustee) (No 2) [2019] FCA 1212 (Moshinsky J) and Pekar v Holden (Trustee) (No 3) [2019] FCA 1928 (Moshinsky J). That series of authority culminated in orders made on 18 November 2019, by which Moshinsky J declared that the respondent had acted in breach of a contract into which he and the applicant had entered for the purposes of the administration of the applicant’s estate (hereafter, the “Administration Contract”). Amongst other things, his Honour ordered that the respondent repay to the applicant a sum of money that the applicant had paid to him under that contract, and that he cease to act as the trustee of the applicant’s bankrupt estate (those orders are referred to, hereafter, as the “Moshinsky Orders”). By the present proceeding, the applicant hopes to recover sums that he says that he incurred or lost in consequence of the contractual breach that was the subject of the Moshinsky Orders (see the claim articulated above at [4(1)]), to secure criminal convictions (or the commencement of processes designed to secure such convictions) against the respondent relating to money that was (or, so he alleges, was not) paid out of his bankrupt estate (see the claim articulated above at [4(2)]) and to secure an indemnity (either personally or to the benefit of his estate) in respect of the ongoing costs associated with the administration of his estate (see the claim articulated above at [4(3)]). There are, in effect, two parts to his suit: first, he seeks to be placed into the position that he would have been in had the respondent not breached the Administration Contract; second, he seeks to punish the respondent in respect of money that was paid—or, as he says, improperly taken—from his estate. The respondent moves the court for orders under s 37AO(2) of the FCA Act. Section 37AO relevantly provides as follows:37AO Making vexatious proceedings orders(1) This section applies if the Court is satisfied:(a)a person has frequently instituted or conducted vexatious proceedings in Australian courts or tribunals……(2) The Court may make any or all of the following orders:(a)an order staying or dismissing all or part of any proceedings in the Court already instituted by the person;(b)an order prohibiting the person from instituting proceedings, or proceedings of a particular type, in the Court;(c)any other order the Court considers appropriate in relation to the person.…(6) For the purposes of subsection (1), the Court may have regard to:(a)proceedings instituted (or attempted to be instituted) or conducted in any Australian court or tribunal; and(b)orders made by any Australian court or tribunal; and(c)the person’s overall conduct in proceedings conducted in any Australian court or tribunal (including the person’s compliance with orders made by that court or tribunal);including proceedings instituted (or attempted to be instituted) or conducted, and orders made, before the commencement of this section.