Re Petruk, A.R.A. v Ex Parte Official Trustee

Re: ANDY ROLF ANTHONY PETRUK (also known as ANDY ROLF ANTHONY BATES)
Ex Parte: THE OFFICIAL TRUSTEE
And: ELIZABETH MARIA PETRUK
No. 397 of 1984
Bankruptcy

COURT

IN THE FEDERAL COURT OF AUSTRALIA
GENERAL DIVISION
BANKRUPTCY DISTRICT OF THE STATE OF VICTORIA
Woodward J.

CATCHWORDS

Bankruptcy - examination of bankrupt under s.69 and spouse under s.81 of the Bankruptcy Act - whether in the circumstances refusal to answer questions in Court amounts to contempt of Court - appropriateness of summary proceedings when parties not represented - desirability of legal representation when liberty in jeopardy.

Bankruptcy Act 1966 (Cth) ss. 69, 81 and 264C.

HEARING

MELBOURNE
#DATE 10:5:1985

ORDER

The application be refused.
The applicant have leave to renew his application, pursuant to rules 102-104 of the Bankruptcy Rules, for committal for contempt.
Alternatively to paragraph 2, the applicant have leave to institute proceedings, pursuant to the Bankruptcy (Offences) Rules, for a breach of s.264C(1)(b) of the Act.
Any proceedings brought in accordance with Order 2 or Order 3 above are to be made returnable on a date for hearing to be notified by the Registrar and the initiating documents served not less than 28 days before that date for hearing.
The costs of this application be reserved.
The further hearing of the examination pursuant to s.81 of the Act be adjourned until further order.

(Settlement and entry of orders is dealt with by 0.36 of the Federal Court Rules).

JUDGE1

These applications for committal for contempt of court arise from the public examinations of a bankrupt pursuant to s.69 of the Bankruptcy Act 1966 ('the Act') and of the wife of the bankrupt pursuant to s.81 of the Act.

These examinations were being carried out by a Registrar until a point was reached on 6 May 1985 where, as I understand the position, the wife of the bankrupt refused to answer any further questions after spending a total of some three days in the witness box. It appears that the bankrupt himself refused to answer questions after about two hours of examination. The Registrar then adjourned both examinations into Court on 7 May pursuant to ss. 69(5)(b) and 81(4) of the Act respectively. However no reports were furnished to the Court pursuant to ss.69(6) or 81(5) respectively.
When the examinations resumed in Court on 7 May, counsel for the official trustee sought to put to the bankrupt, Mr Petruk, the same question about his assets as had previously been put before the Registrar and not answered. The question put was "How many windsurfers do you have?". Mr Petruk made a statement which amounted in substance to an explanation as to why he would not answer the question. After it became clear that he had no intention of answering the question, Mr Petruk, who was unrepresented, was invited by the Court to return to the bar table and explain his refusal to answer in more detail, which he did. He was then warned by the Court of the possible serious consequences of failing to answer a question when directed to do so by the Court. He then returned to the witness box and the question "How many windsurfers do you own?" was put to him by the Court with a direction to answer. Mr Petruk again replied with a prepared statement. He next returned to the bar table and was asked to show cause why he should not be dealt with for contempt of Court. He then spoke at length, the gist of his statement being that the bankruptcy proceedings were wholly invalid, were the result of forged documents and had the ulterior motive of leading to his secret deportation, probably to South America.
A similar procedure occurred in the case of the bankrupt's wife, Mrs Petruk, who was also unrepresented. She was first asked by counsel for the official trustee the same question which had led to her refusal to answer any more questions before the Registrar. However this question only related to the confirmation of evidence which she had previously given, and the Court indicated that it would not be disposed to take any action over the refusal to answer a question of that nature. She was then asked a similar question to that which had been put to her husband, namely "How many windsurfers does your husband own?". In reply, like her husband, she made a prepared statement, the gist of which was that she would answer no further questions. She persisted in her refusal to reply when directed by the Court to do so.
When asked to show cause why she should not be dealt with for contempt of Court, Mrs Petruk made a long statement raising many issues, the most important of which was that she had been unable to obtain legal representation. She claimed to have no substantial assets of her own, other than goods which had been seized by the official trustee, and to have been refused legal aid. Like her husband, she relied also on the alleged invalidity of the sequestration order.
Because of the course I propose to take in this matter, and because much of what was said was quite irrelevant to the issues before me, I do not set out the arguments of Mr and Mrs Petruk in any greater detail.
I am not prepared, in this hearing, to grant the applications of Counsel for the official receiver. I recognize the very serious implications of the refusal by Mr and Mrs Petruk to answer the Court's questions. It is vital to the proper administration of bankrupt estates that people in their position should answer all proper questions put to them. It is not suggested that the question about windsurfers was in any way improper. The refusal, in each case, was to answer any question relating to assets, or otherwise touching on the question of bankruptcy. The particular question which led to the refusal to answer in each case was a simple one which should have caused no difficulty or embarrassment. I believe that, up to this point of the necessary proofs, there is evidence to justify a finding of contempt of Court.
However I am not prepared to proceed to a final decision in either case. I say this for several reasons. In the first place, having listened carefully to the long statement of Mr Petruk I have some doubt as to whether he is able to distinguish between reality and fantasy; he certainly appears to be obsessed with theories of conspiracy and with the possibility of secret deportation. Mrs Petruk appears to share some of these fears and possible obsessions and to be illogically upset about the confusion in the titling of some documents in the case - arising from her husband having, as I understand it, changed his name from Bates to her maiden name of Petruk.
Secondly, Mrs Petruk is very concerned about her inability to secure legal representation. It seems that she has been represented in the past by two different solicitors in Melbourne and Perth, but they are no longer retained and she has been unable to obtain legal aid. She claims to be unable to afford solicitors privately engaged. She says that she is afraid to answer further questions without legal advice.
I do not know if she and her husband would qualify financially for legal aid, but if they do, I think they should have a further opportunity to obtain it now they are facing a charge of contempt of Court which could well lead to their imprisonment. Whether they will take heed of such independent advice as they may receive, I do not know; but I think Mrs Petruk at least may be prepared to follow the advice of a solicitor who has had an opportunity to look at the matters which are concerning her, and to advise her of her rights and responsibilities. Mr Petruk appears to be less interested in legal representation.
In the final analysis, I do not think it would be right to impose an indefinite prison sentence, for refusal to answer questions, on two people who seem to have an imperfect understanding of the realities of their circumstances and who are not legally represented. No other punishment for contempt, if found, would appear appropriate on the evidence as it stands at present.
I should say, in passing, that although an interpreter was sworn in, and proved helpful on a few occasions, I am satisfied that Mr & Mrs Petruk both have a good grasp of the English language. Any difficulties on this score have played only a minor part, if any, in the difficulties they seem to have in coming to terms with the position in which they find themselves.
I think the appropriate course for me to take is to refuse the present applications for summary judgment on the contempt issues, while giving leave for fresh applications to be made.
In doing so, I must not be taken as suggesting that summary punishment for a contempt such as is alleged here, in the face of the Court, is necessarily or even usually inappropriate, even when the person concerned is unrepresented. Each case must be decided on its own facts. In the present case, even though there are strong indications that contempts have occurred, I have not tried to resolve the doubt that I feel as to whether Mr & Mrs Petruk have sufficient understanding of their position to make it appropriate that they, or either of them, should suffer the severe punishment which imprisonment would represent.
The official trustee will have leave to proceed further against the bankrupt and his wife, for their refusal or failure to answer questions before me, if he should wish to do so. I cannot judge the importance of the information which might still be obtained from either of them, and the official trustee is in as good a position as anyone else to gauge the likely effectiveness of further proceedings.
The official trustee may proceed by way of applications, pursuant to rules 102-104 of the Bankruptcy Rules, for committal for contempt. Alternatively he may initiate or instigate proceedings pursuant to s.264C of the Act. As at present advised, and in spite of the doubts expressed by his counsel, I believe the official trustee could institute such proceedings in his own name, but that is a matter for him and his advisers to determine if he decides to pursue such a course.
Any application pursuant to the Bankruptcy Rules, or information and summons pursuant to the Bankruptcy (Offences) Rules, is to be made returnable on a date for hearing to be notified by the Registrar and served at least 28 days before that date for hearing. This should give the bankrupt and his wife sufficient time to obtain legal representation for these summary proceedings which could result in the loss of their liberty.
The applications are refused and I reserve the question of costs.
Hearing of the respective ss.69 and 81 examinations will be adjourned until further order.

[1985] FCA 182

10 MAY 1985