Pekar v Rickards Legal (No.3)

[2016] FCCA 2198

FEDERAL CIRCUIT COURT OF AUSTRALIA

PEKAR v RICKARDS LEGAL (No.3) [2016] FCCA 2198

Catchwords:
BANKRUPTCY – Applicant filing application to revisit outcome of prior decision of the Court – application for summary dismissal – application clearly an abuse of process – application having no reasonable prospects of success – application facing Anshun estoppel and other substantive difficulties – application dismissed.

Legislation:

Federal Circuit Court of Australia Act 1999, s.17A

Cases cited:
Spencer v The Commonwealth of Australia (2010) 241 CLR 118
Jefferson Ford Pty Ltd v Ford Motor Company of Australia Ltd (2008) 167 FCR 372
General Steel Industries Inc v Commissioner for Railways (1964) 112 CLR 125
Dey v Victorian Railways Commissioners (1949) 78 CLR 62
Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589

Applicant: FIMA PEKAR

Respondent: RICKARDS LEGAL

File Number: MLG 1636 of 2015

Judgment of: Judge Burchardt

Hearing date: 12 August 2016

Delivered at: Melbourne

Delivered on: 29 August 2016

REPRESENTATION

Counsel for the Applicant: Mr Pekar, in person

Counsel for the Respondent: Mr Rickards

Solicitors for the Respondent: Rickards Legal

ORDERS

1. The interim application filed 3 March 2016 by Mr Fima Pekar be dismissed.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

No. MLG 1636 of 2015

FIMA PEKAR

Applicant

And

RICKARDS LEGAL

Respondent

REASONS FOR JUDGMENT

1. The matter before the Court is an interim application filed on 3 March 2016 by Mr Pekar.  In that application, the details of the orders sought, which are, it should be noted, only interim orders, as follows:

   “16.05(b) – 16(2) – the order was obtained by fraud”

2. The application was accompanied by an affidavit of Mr Pekar filed contemporaneously and the first paragraph of it reads:

   “The order for dismissal have been obtained by fraud. The application is based on par 16.02 of the Federal Circuit Court Rules 2001.”

3. That assertion can only be understood in the context of the somewhat unusual history of the matter.  The present proceedings have their origin in bankruptcy proceedings taken by Rickards Legal against Mr Pekar.  As long ago as 14 August 2014, Rickards Legal filed a Creditors Petition before the Court based on a final order made in the Supreme Court Costs Court on 28 May 2014 in the sum of $13,002.28.  On 2 October 2014, Registrar Caporale made a Sequestration Order in respect of Mr Pekar’s estate and appointed a trustee in bankruptcy.

4. On 20 October 2014, Mr Pekar applied for review.  That matter was heard and dismissed by me by judgment given on 12 February 2015.  I affirmed the Sequestration Order and dismissed the applicant’s application for review and made the usual costs order consequentially.  Thereafter, and plainly dissatisfied with the terms of my judgment, Mr Pekar, who was legally represented at the time, filed an application seeking to have the bankruptcy annulled.  It should be noted that, in the judgment I originally gave, I was not satisfied that Mr Pekar was solvent and I further found that there was no other cause why the Sequestration Order should be made.

5. It should be noted that Mr Pekar did not seek to appeal that decision.  As I say, he lodged his application for an annulment.  The affidavit lodged in support of the application for annulment on 16 July 2015 essentially asserts that he was solvent at the time of the Sequestration Order.  No assertions of fraud were made in the affidavit prepared by his solicitor.  That is not insignificant, given that, in the proceedings before me, Mr Pekar referred to disciplinary and criminal investigation into the professional conduct of the creditor, Rickards Legal, which might result in compensation payouts to Mr Pekar.

6. When the annulment application came before her Honour Judge Hartnett, by which time Mr Pekar was self-represented, no further assertions of fraud were apparently advanced against Mr Rickards or anyone else.  Her Honour, having heard the matter in September 2015, provided judgment on 28 October 2015.  Her Honour traversed the history of the matter including related proceedings in the Victorian Civil and Administrative Tribunal.

7. Her Honour concluded that the applicant, as at the date of bankruptcy, had a number of debts, including that owed to Rickards Legal, and concluded that he was not in a position on 2 October 2014 to pay his debts as and when they fell due and she concluded that there was then, and remained no other sufficient cause why a Sequestration Order ought not be made. 

8. She continued, “There is no evidence before this Court that would satisfy it that the Sequestration Order ought not to have been made. Indeed, there is significant evidence to the contrary.”  The last paragraph of her judgment reads:

   “This application is entirely without merit and shall be dismissed.”

9. On 3 March 2016, Mr Pekar lodged his application.  Shortly thereafter, her Honour Judge Hartnett handed down a decision on 31 March 2016, ordering Mr Pekar to pay the costs of Rickards Legal on an indemnity basis.  Mr Pekar took objection to the matter being heard by Judge Hartnett and the matter was allocated to me.  I first heard the matter on 26 April 2016 for directions.  On that occasion, Mr Rickards, who represented Rickards Legal, made an oral application for the summary dismissal of the application brought by Mr Pekar.

10. Having heard the parties, I ordered that Mr Rickard’s submissions be treated as an application for summary judgment pursuant to s.17A of the Federal Circuit Court of Australia Act 1999 and adjourned the matter for hearing. It was subsequently relisted to 12 August 2016. It should be noted that I caused the parties to be provided with a copy of s.17A by letter from my associate dated 28 April 2016 to the parties. The letter, relevantly, reads:

    “The above matter has been listed for hearing on 14 July 2016 at 10.15 am (as indicated, that day was subsequently vacated). 

    To avoid any doubt, his Honour has asked that I write to you to make it quite clear what the hearing is about. 

    The matter before the Court is not constituted by any filed originating application but consists of Mr Pekar’s application to reopen the annulment application which was dismissed by Judge Hartnett on 28 October 2015. 

    The hearing on 14 July 2016 is to hear the application of Rickards Legal for the summary dismissal of Mr Pekar’s application pursuant to s.17A of the Federal Circuit Court of Australia Act 1999. A copy of that section is annexed for information.”

11. I mention these matters because Mr Pekar has, in my dealings with him, tended somewhat to concentrate on his ongoing particular grievances rather, perhaps, than to concentrate his submissions on the precise legal issue at hand.  When the matter came before the Court, Mr Rickards, who continued to appear for Rickards Legal, took the Court through the history of the matter and pointed to the fact that the applicant’s own affidavit filed on 3 March 2016 appears to concede a continuing debt to Rickards Legal of $13,002.98.

12. Mr Rickards submitted that the debts of the estate are now close to $200,000 and, more particularly, that the matters that the applicant now seeks to raise are the same as those raised both before myself and Judge Hartnett in the earlier proceedings.  Mr Rickards noted that the allegation of fraud, which was not particularised as to which particular order had been, in fact, obtained by fraud, had been made both before myself and Judge Hartnett and that such matters require cogent proof.  Mr Rickards clarified in response to a question from the Court that he was submitting that the application was an abuse of process because it sought to revisit Judge Hartnett’s decision and had no merit.  He described the application as frivolous and vexatious.

13. Mr Pekar, who was self-represented, said that the matters asserted by Mr Rickards all missed the crucial point. He said that he had paid Mr Rickards $6,300, being payment in full, in 2011. A fraudulent invoice had subsequently been produced. He had requested an itemised bill from Rickards Legal and this was still being refused five years later. He had also sought records which he asserted that Mr Rickards was obliged by law to give him and made reference to s.161 of the Fair Trading Act 1999 (Vic) in this regard.

14. He asserted he has assets, even now, of $30,000.  He said the trustee’s affidavit was untruthful.  Indeed, he went so far as to assert that the trustee’s affidavit filed in the earlier proceedings contained only one truthful matter, namely, the name of the deponent.  He accused the trustee of perverting the course of justice and said that the list of creditors to which Mr Holden had deposed had nothing to do with the bankruptcy.  The debts asserted were not proved and did not arise from final orders.

15. In response to a question from the Court, Mr Pekar confirmed that he seeks to annul his bankruptcy because he is solvent.  He asserted he would be able to prove his case.  He wants to set aside the order made by Judge Hartnett because of the fraud which gave rise to it.  He said Judge Hartnett had been deceived by the lies told by the trustee and Rickards Legal.  He sought that Judge Hartnett’s orders be set aside and, thereafter, his bankruptcy be annulled.  He indicated he would seek costs and compensation for what he says the trustee and Rickards Legal have done to him.  He said that if the matter was not heard again, there will be no justice.

16. S.17A of this Court’s Act is the equivalent section to s.31A of the Federal Court of Australia Act 1978:

    “17A Summary judgment

    (1)  The Federal Circuit Court of Australia may give judgment for one party against another in relation to the whole or any part of a proceeding if:

    (a)  the first party is prosecuting the proceeding or that part of the proceeding; and

    (b)  the Court is satisfied that the other party has no reasonable prospect of successfully defending the proceeding or that part of the proceeding.

    (2)  The Federal Circuit Court of Australia may give judgment for one party against another in relation to the whole or any part of a proceeding if:

    (a)  the first party is defending the proceeding or that part  of the proceeding; and

    (b)  the Court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding.

    (3)  For the purposes of this section, a defence or a proceeding or part of a proceeding need not be:

    (a)  hopeless; or

    (b)  bound to fail;

    for it to have no reasonable prospect of success.

    (4) This section does not limit any powers that the Federal Circuit Court of Australia has apart from this section.”

17. It is clear from the decisions of the High Court in Spencer v The Commonwealth of Australia (2010) 241 CLR 118 and of the Full Court in Jefferson Ford Pty Ltd v Ford Motor Company of Australia Ltd (2008) 167 FCR 372 that this has lowered the bar from the previously-perceived somewhat higher standard referred to in cases like General Steel Industries Inc v Commissioner for Railways (1964) 112 CLR 125 and Dey v Victorian Railways Commissioners (1949) 78 CLR 62.

18. In this case, it is immediately apparent that what Mr Pekar is seeking to do is to go behind the judgment entered by Judge Hartnett.  He has not sought to appeal the judgment of Judge Hartnett.  It is, I regret to say, instantly apparent that this application represents an abuse of process.  Judge Hartnett has conclusively determined the question of solvency or otherwise of Mr Pekar.  If his allegations of fraud were not prosecuted before Judge Hartnett, that omission is not one that is now open to him to revisit.  He well knew of all the matters asserted long before the hearing before Judge Hartnett. Indeed, Mr Pekar’s complaints were canvassed in the materials filed by Mr Rickard’s in an affidavit sworn 1 October 2014 in MLG 1675 of 2014 (the proceeding before me that culminated in the Sequestration Order). Having failed to raise them before her Honour, he cannot seek to set her judgment aside now on the basis that he has obviously elected, if this be the case, not to pursue these matters before her Honour.

19. The fact is that Mr Pekar’s case is hopeless and is clearly so on the materials before the Court.  There is simply nothing to suggest fraud by Mr Rickards or by the trustee beyond Mr Pekar’s challenged assertions.  The case faces so many difficulties it is difficult to enumerate them in a sensible way. The outcome is so obvious that I shall state my conclusions only very briefly.  It is clearly an abuse of process to seek to revisit a decision properly arrived at by Judge Hartnett.  Her Honour’s conclusion in that case was, in my view, inevitable in the face of the materials before her Honour.  It is plainly a question of Anshun estoppel (Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589) also because, if there were claims for fraud and the like, they should have been prosecuted before her Honour.

20. Mr Pekar self-evidently further faces the full force in these circumstances of the doctrines of res judicata and issue estoppel, at least in relation to his claims of solvency.

21. For all these reasons, it is immediately apparent that Mr Pekar has no prospects whatever of successfully prosecuting his case and I will order that the case be summarily dismissed pursuant to s.17A of the Court’s Act. It could just as well, however and equally, be dismissed pursuant to r.13.07 or even r.13.10 of the Federal Circuit Court Rules 2001.  This claim is undoubtedly frivolous and vexatious and an abuse of the process of the Court and there is no reasonable prospect that Mr Pekar will be able to successfully prosecute his case.

22. I will hear the parties on the question of costs.

I certify that the preceding twenty-two (22) paragraphs are a true copy of the reasons for judgment of Judge Burchardt

Date: 29 August 2016