Pekar v Rickards Legal
[2015] FCCA 217
•12 February 2015
FEDERAL CIRCUIT COURT OF AUSTRALIA
| PEKAR v RICKARDS LEGAL | [2015] FCCA 217 |
| Catchwords: BANKRUPTCY – Application for review of decision of Registrar to make a Sequestration Order – applicant seeking to re-agitate matters already dealt with in Courts or Tribunals – long history of dispute between the parties – applicant not satisfying Court he is able to pay his debts or that there is other sufficient cause not to make a Sequestration Order – application for review dismissed. |
| Legislation: Federal Court (Bankruptcy) Rules 2005 , r.4.06 Bankruptcy Act 1966, ss.43, 44, 44(1)(b)(ii), 44(1)(c), 52(1), 52(2) |
| Cain v Whyte (1933) 48 CLR 639 Ling v Enrobook Pty Ltd (1997) 74 FCR 19 |
| Applicant: | FIMA PEKAR |
| Respondent: | RICKARDS LEGAL |
| File Number: | MLG 1675 of 2014 |
| Judgment of: | Judge Burchardt |
| Hearing date: | 16 December 2014 |
| Date of Last Submission: | 16 December 2014 |
| Delivered at: | Melbourne |
| Delivered on: | 12 February 2015 |
REPRESENTATION
| The Applicant: | In person |
| Counsel for the Respondent: | Mr Rickards |
| Solicitors for the Respondent: | Rickards Legal |
ORDERS
Further compliance with r.4.06 of the Federal Court (Bankruptcy) Rules 2005 be dispensed with.
The orders made by Registrar Caporale on 2 October 2014 are affirmed.
The application for review is dismissed.
The costs of the petitioning creditor be paid out of the estate of the bankrupt in accordance with the Bankruptcy Act 1966.
THE COURT NOTES THAT:
(a)The date of the act of bankruptcy is 25 July 2014.
(b)A consent to act as Trustee has been signed by Matthew Terence Gollant and Timothy Mark Shuttleworth Holden.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLG 1675 of 2014
| FIMA PEKAR |
Applicant
And
| RIKARDS LEGAL |
Respondent
REASONS FOR JUDGMENT
Introductory
On 2 October 2014, Registrar Caporale made a Sequestration Order against the estate of Fima Pekar on a Petition filed on 14 August 2014 by Rickards Legal. The matter presently before the court is Mr Pekar’s application to review the decision of the Registrar, filed on 20 October 2014.
The applicant has been self‑represented throughout what appears to be an extremely extensive process of litigation with the respondent, and the grounds set out in the application for review and subsequently in various materials filed by the applicant are by no means entirely easy to follow. Nonetheless, I have come to the clear conclusion that Mr Pekar’s points are all misconceived, and for the reasons that follow, I am going to affirm the orders made by Registrar Caporale.
Before coming to the review itself, it is appropriate briefly to review the materials filed in the proceedings from time to time.
The Materials Filed
On 14 August 2014, as already indicated, the creditor’s Petition was filed. The affidavit verifying the Petition, the affidavit verifying paragraph 4 of the Petition and the affidavit of service of the Bankruptcy Notice are unremarkable.
On 26 September 2014, the applicant (as he now is and as I will continue to refer to him) filed his Notice of Appearance and Notice of Opposition. The Notice of Opposition referred the reader to an affidavit of Mr Pekar’s filed on 26 September 2014. That affidavit relevantly asserts a cross‑claim in the sum of $54,302.73 in the Magistrates’ Court of Victoria at Moorabbin, that the creditor is under disciplinary investigation by the Victorian Legal Services Commissioner and could be charged with professional misconduct, that the creditor was subject to further legal action by the applicant and that it would take 12 to 18 months for those issues to be resolved by courts. Accordingly, it was put that “this Honourable Court cannot issue the order the applicant is seeking”.
On 1 October 2014, an affidavit of service of Petition was filed. It was filed by Mr Rickards, the principal of the respondent. Mr Rickards also filed an affidavit on that date.
It is not necessary to traverse the affidavit in any great detail. It sets out a history of very significant and relatively lengthy litigation between the applicant and the respondent, arising out of what is clearly an originally disputed bill for legal work performed by Rickards Legal for Mr Pekar, but which Mr Pekar regarded as thoroughly unsatisfactory on a number of grounds. The history is traversed in some detail in exhibit MR2, being a copy of the decision of Mukhtar AsJ in a proceeding between the parties in the Supreme Court given on 1 August 2014.
Mr Rickards also filed as exhibit MR3 to his affidavit a further affidavit and annexures (of which MR17 and MR18 appear to be missing) setting out the lengthy history between the parties involving proceedings in VCAT, the Magistrates’ Court of Victoria and the Supreme Court. The outcomes of these proceedings have, in part, produced what appears to me incontestably to be the order for costs upon which both the Bankruptcy Notice and, ultimately, the Creditor’s Petition were based.
On 2 October 2014, the respondent filed an affidavit of search, and an affidavit of continuing debt designed, together with the affidavit verifying the Petition , to satisfy the matters referred to in s.52(1) of the Bankruptcy Act 1966 (“the Act”).
It would appear from the court file that on 2 October 2014, the applicant filed a statement (dated, it would seem, 2 May 2014). The statement relevantly assets that the creditor has not proven that the debtor is unable to pay his debts as and when they become due. The statement asserts, effectively, that the applicant had not ever indicated that he could not afford to pay but, rather, that he refused to do so because the costs orders upon which the Petition was based were obtained by fraud inasmuch as the work charged for had not, in fact, occurred. The statement went on to assert that the applicant was willing and able to pay his debt providing the creditor provided proof, including bank statements, of an amount payable of $8,218.05.
Following the Sequestration Order made by Registrar Caporale on 2 October 2014, the applicant’s application for review sought to set aside the Registrar’s orders that the application to adjourn the Petition be refused, and the Sequestration Order and cost orders made as well.
Under the heading Orders Sought, the application asserts:
“To adjourn the creditor’s petition for twelve month pending the outcome of the Magistrates Court proceeding and the result of disciplinary investigation by the LSC and criminal investigation by Victorian police into the professional conduct of the creditor, “Rickards Legal”, which could resolve in compensation payout to the respondent Fima Pekar.”
Mr Pekar filed an affidavit, as earlier indicated, on the same date which relevantly asserts, first, that the creditor is a defendant in a Magistrates’ Court proceeding in the sum of $54,302.73, well above the $13,002.28 upon which the Petition is based. Next, the affidavit refers to disciplinary investigation by the Victorian Legal Services Commissioner and to an official complaint to the Victorian police of fraud.
When the matter came before the court on 10 November 2014, I adjourned it to trial on 16 December 2014 to give the parties time to put on any relevant material.
On 25 November 2014, the applicant issued a subpoena to Mr Rickards both to give evidence and produce documents. The schedule of documents sought was substantial. That subpoena was the subject of a Notice of Objection, to which I will return.
Mr Rickards also filed an affidavit on 15 December 2014. It is sufficient for these purposes to say that when that affidavit is considered, it is apparent that the complaint to the Legal Services Commissioner (and by no means the first) by Mr Pekar has been dismissed. It also purported to show that the proceeding in the Magistrates’ Court was dismissed. Mr Rickards further deposed that he was not aware of any criminal investigations by Victoria Police in relation to himself or his firm.
Relevantly, the affidavit also annexed a copy of Mr Pekar’s Statement of Affairs.
The Statement of Affairs, on its face (dated 31 October 2014), shows that the applicant had gifted to his wife his share of the matrimonial home on 16 July 2012 and that he had no other assets of any significance.
Against this overview of the materials filed, I turn to the submissions made at court.
The Objection to Subpoena
I first ruled on the respondent’s objection to the subpoena. Mr Rickards asserted, without contradiction by the applicant, that no conduct money had been provided in relation to the subpoena. He further pressed the objections set out in his Notice of Objection which, broadly speaking, can be characterised as asserting that the matters the subject of the subpoena were irrelevant to the matter before the court, are documents, in any event, that “form part of final court orders and, therefore, seek to examine matters the subject of final court orders” and were, therefore, an abuse of process or vexatious.
The oral submissions made by the applicant tended, in my view, to confirm that Mr Pekar was seeking to re-agitate the matters that had been the subject of final orders. I indicated that I would uphold the objection to the subpoena and give my reasons in my judgment.
It is sufficient in the circumstances to say that I think the grounds taken by way of objection are all manifestly made out. The Petition is based on a set of final cost orders, and the assertions made by the applicant from time to time (as noted, if nowhere else, in the judgment of Mukhtar AsJ) have all been conclusively determined contrary to the position for which Mr Pekar seeks now to contend.
The Submissions Made at Court
Given that the applicant was unrepresented, I caused Mr Rickards first to address the court about the matters arising under s.52(1) of the Act. It is apparent that the affidavit verifying the Petition is satisfactory, there is no question as to service, and although an affidavit of continuing debt was not filed for the rehearing, it is quite apparent that the moneys are still owed. That is, indeed, the position expressly articulated by Mr Pekar.
I indicated that as a matter of belt and braces, I would dispense with further compliance with r.4.06 of the Federal Court (Bankruptcy) Rules 2005 (“the Rules”), and it is plainly appropriate to do so. I am quite satisfied that the matters referred to in s.52(1) of the Act are established.
Mr Pekar then made his submissions, which were briefly put. He tendered to the court a statement, which I marked as exhibit A1. Doing the best I can to construe it, the first point raised is that this court does not have jurisdiction to make a Sequestration Order because the conditions required to be met by s.44 of the Act are not met.
Contrary to Mr Pekar’s position, it is clear that there is a debt owed to the creditor of more than $5,000 (albeit arising from various different cost orders made from time to time). It is also clear, contrary to his submissions, that the sums are liquidated sums due at law and are payable within the meaning of s.44(1)(b)(ii). The Petition was presented on 14 August 2014, and the Bankruptcy Notice which gave rise to it was served on 4 July 2014, so clearly the conditions in s.44(1)(c) are met.
The statement also raises s.43 of the Act, but since it concedes that at the time of the act of bankruptcy, the applicant was both personally present and ordinarily resident in Australia, his complaint under this heading is not made out. It repeats the question as to whether the debt is a liquidated sum. It asserts that the debts upon which the Petition arise are unconnected with any obligations on the part of Mr Pekar to pay any money to Rickards Legal and goes on to seek that the orders made by Registrar Caporale be set aside.
Consideration
The matters required to be established by s.52(1) having been satisfied, the court plainly has a discretion to make a Sequestration Order against the estate of the debtor. Prima facie, a party showing the act of bankruptcy, and having proved the s.52(1) matters, is entitled to a Sequestration Order (see Cain v Whyte (1933) 48 CLR 639) .
Pursuant to s.52(2) of the Act, if the debtor satisfies the court that he or she is able to pay his or her debts or that for other sufficient cause a Sequestration Order ought not be made, the court may (but is not required) to dismiss the Petition . It is for the debtor to establish such sufficient cause (Ling v Enrobook Pty Ltd (1997) 74 FCR 19).
Here, although Mr Pekar has asserted (albeit not on affidavit at any point) that he is able to pay his debt but simply does not wish to do so, the materials he has filed go nowhere near to proving he is able to pay his debts as and when they fall due. His Statement of Affairs (which Mr Rickards has deposed on an inadmissible hearsay basis to be untruthful) does not indicate that Mr Pekar has any assets with which to satisfy the debt in this Petition. This leaves to one side other debts asserted by Mr Rickards’ most recent affidavit which are not contradicted by Mr Pekar, although I note that he is not legally represented and may not, therefore, have understood the need to respond.
Assuming in Mr Pekar’s favour, I as think I should, that his Statement of Affairs is truthful, he cannot, it would seem to me, afford to pay the debts he has owing. He is a pensioner, and he has cash of between $1000-$12,000. He has a car he values at $5,000 and appears also to have a mortgage of some $58,000. There is simply no other meaningful information in the Statement of Affairs, and even assuming, as I do, that Mr Pekar has a pension income, there is nothing to suggest that the court should be satisfied that he is able to pay his debts as and when they fall due.
Further, there is no other sufficient cause why a Sequestration Order ought not be made. While a number of judicial officers have noted the intensity of Mr Pekar’s views, the reality is that his assertions of fraudulent conduct, no matter how frequently made, have not been accepted by any relevant reviewing authority or court. Mr Pekar plainly wishes to assert to this court that the legal work for which Rickards Legal charged him was not done or was in some other way tainted. There is nothing in the materials to support that proposition and, indeed, a wealth of material to the opposite effect.
In the circumstances, it is plainly appropriate to exercise the discretion to make a Sequestration Order.
Conclusion
Most unfortunately for the applicant, his application lacks merit and, as articulated, is hopelessly misconceived. I will make the necessary orders to dismiss the application.
I certify that the preceding thirty-four (34) paragraphs are a true copy of the reasons for judgment of Judge Burchardt
Associate:
Date: 12 February 2015
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