Re Petruk, A.R.A v Ex parte Petruk, E - [1985] FCA 210

CATCHWORDS

Bankruptcy - examination by a Deputy Registrar in Bankruptcy

of a person pursuant to

s.81 Bankruptcy Act 1966 - review of

Deputy Registrar's refusal to grant

an adjournment.

Bankruptcy Act 1966

ss.14,81

ANDY

ROLPH

ANTHONY

PFTRUK

~~~

(also known as

ANDY ROLPH ANTHONY BATES), a bankrupt

EX PARTE: ELIZABETH PETRUK

No. 397 of 1984

Northrop J.

Melbourne

1 May 1985

* Not consldered appropriate for further dlstributlon.

IN THE FEDERAL COURT @F AUSTRALIA

) )

EXERCISING	FEDERAL	JURISDICTION	)	No. 397 of 1984
)

IN BANKRUPTCY

)

BANKRIJPTCY DISTRICT OF VICTORIA

ANDY ROLPH ANTHONY PETRUK

(also known as

ANDY ROLPH ANTHONY BATES), a bankrupt

EX PARTE: ELIZABETW PETRIJK

COIJRT:	NORTHROP J.
IjATE:	1 MAY 1985

PLACE

: MELBOURNE

EX TEMPOR; REASONS FOR JUDGMENT

The present applicant, Mrs. Elizabeth Petruk,

has

been

summoned

under

section

sub-section

(1) of

the

Bankruptcv Act

1966

to attend and give evidence. I shall

read that sectlon:

"The Court or the Registrar may,

on the appllcatlon

of a creditor who

has proved his debt and on such

terms as

to costs as

the Court or the Registrar

thinks fit to impose,

or on the application of

the

trustee, at any time summon-

(a)	the bankrupt or the spouse of the bankrupt;

0':

(b)

a person who is known or suspected to have in his possession any of the property of the bankrupt, or is supposed to be indebted to

the

bankrupt or to

able

give

information concerning the bankrupt

his

trade dealings, property or affairs,

- 2 -

to attend, on a date and

at a time and place fixed

in the summons, before the Court or the Registrar

or, if

the

Court

the

Registrar

thinks

fit,

before a magistrate, to give evidence concerning,

and produce any books (whether

or not in existence

at the time the bankrupt became a bankrupt) in his

custody or power relating

to, the bankrupt or his

trade dealings, property or affairs."

In this case the bankrupt is sald to

be Andy Rolph

Anthony Petruk (also known as Andy Rolph Anthony Bates).

The

Reglstrar issued a summons under sub-sectlon

(1) of

sectlon

81 of the Bankruptcy Act

and it

was served on Mrs.

Fetruk,

and she was requlred to attend lnltlally at a

he rmg before

the Reglstrar under section 81

on 4 December 1984. She dld

not attend. Subsequently a warrant for her arrest was issued

and eventually she came before the Registrar on

31 December

1984 at which hearing she was represented by

solicitor.

The examinatlon contlnued on that day.

At the same time the

Registrar was in the process

of conducting an examination of

the bankrupt under sectlon

69 of the Bankruptcy Act.

On 31 December 1984 the hearing

of the examlnatlon

under sectlon 81 was ad~ourned

to 2 0 March 1985. Mrs. Fetruk

did not attend on that resumed hearlng

the examinatlon.

The hearing was

ad~ourned

to 2

April 1985. Notice of that

hearlng and air tickets from Perth to Melbourne to enable Mrs. Fetruk to attend were served on Mrs. Fetruk but again there was no.appearance on 2 April 1985. A further warrant

was issued for per arrest.

The hearing was ad~ourned

to 24

April 1985 and after being

arrested, Mrs. Fetruk attended at

that further hearing. The examination was stood

down to

- 3 -

allow an Interpreter to be present and appllcation to be made

by Mrs. Petruk t o r legal aid, and also

t o r application to

made to the Human Rights Commisslon.

Legal aid was refused; the hearing resumed on

Aprll and on this occasion. or shortly after I should say, on 29 Aprll, after the weekend, the refusal of the legal aid was confirmed by a letter from the Legal Ald Commission glven to

Mr. and Mrs. Petruk.

I shall read that letter:

"I regret

that

your

appllcation

for

legal

asslstance has not been approved for the reasons

given below.

If you are dissatlsfied with this declsion you are

entltled to have It reconsldered. If you wlsh that

to be done, you should write

to the Commisslon

wlthln 14 davs of

the date of this letter setting

out reasons why the declsion should be changed.

Yours faithfully,

( S lgned

)

for Julian R. Gardner

DIRECTOR OF LEGAL AID".

There are then set out the reasons	f o r non-approval, and	I
quote :

"Havmg regard

all

relevant

matters,

the

Commlsslon does not consider

that it is reasonable

to provlde legal asslstance in thls case.

On the Information provided the Commlssion belleves that the extent of any benefit or galn you would receive if legal asslstance was provided, would not

justify the cost

to the Legal

Aid Fund.

Asslstance

will

not

normally

provlded

for

matters

under

the

Bankruptcy

Act

unless

the

appllcant is charged

with an offence which may

result in a jail sentence."

- 4 -

Eventually on 30 April, the examination was resumed

before the Registrar and

Mrs. Petruk renewed her application

for an

ad~ournment for

one

month.

The basis of the

application was to pursue the review

of the refusal to grant

legal aid; the need for her to be represented; to enable her

to continue with her

application

the

Human

Rights

Commission, and as appears from evldence glven today, because

in the course

of the hearing allegations were made against

her and

she felt she needed

more than ever to

have

legal

representation. In this regard, reference should be made to

section 81, sub-sectlon ( 7 ) of	the Bankruptw Act. That
sub-section reads:

"A person summoned to attend before the Court, the

Reglstrar or

a magistrate for examination under

this section is entitled to be represented,

on his

examination, by counsel or

a solicltor, who may

re-examine hlm after his examination."

The nature of the examination under sectlon 81

the Bankruptcy

Act

1 s referred to in

a ludgment of Mr.

Justice Lockhart In Re: Csldei:

parte: Andrew (1979) 39

F.L.R. 387 and at page 390 after setting out section	81,
sub-section 1, hls Honour said and I quote:

"The corresponding section in the Bankruptcy

Act 1924 was s.80 which was substantially taken

from 5.25 of the Bankruptcy Act, 1914 (Imp.). It

was In turn taken,

except for sub-s.(5) which was

added later, from the Bankruptcy

Act, 1869 (Imp.).

The power

to summon persons for examination in

bankruptcy was originally conferred by

34 and

Henry 8 c. 4, S. 2 , and was continued by

13 Eliz. 1

c. 7, S. 5; 1 Jac. 1 c . 15, S. 10; 6 Geo. 4 c. 16,

S. 33, anda

the Act of 1849 (Imp.),

S. 120.

- 5 -

The purpose of the

section 1s to

elicit

informatlon that may be relevant for the proper

conduct of

the bankruptcy and that may ald the

process of flndlng and recoverlng assets available

for dlstribution.

The purpose of the sectlon is of importance and It has been summarised In that passage which I have Just read. The

equlvalent power to have a public examlnatlon of a

bankrupt

under section 69 of the Act 1s also relevant in this case and

in a ~udgment

given on 2 1 February 1985 in the Federal Court

of Australia in

the matter of

Re: Willlam James Whltla and

Desleicrh Marlse Whitla; Ex parte: Alan Rlchard

Tavlor, Mr.

Justlce Spender sald

of sectlon 69 and I quote:

"The ob]?ct

a public

examination

bankrupt

1 s

not

merely

obtaln

a full

and

complete dlsclosure of the assets of the bankrupt,

and the tacts relatlnq to the bankruptcy, In the

interests of the creditors ot the bankrupt, but

also to pr tect thepublic. It is an

admlnistrative

Inqulry.

but

nonetheless

Important

for

that

fact.

can

involve

quite

serlous consequences as some of the sub-sections of

5.19 tend to

indicate."

By a decislon made on

3 0

Aprll 1985, that

1 s

yesterday, the Deputy Registrar

conductmg the examlnatlon

refused the appllcation for

adjournment and his reasons

for that refusal appear

at pages 166 to 167 of the transcrlpt

of the examlnatlon.

The Registrar had before him all the

facts to whlch

I have previously referred.

At the tlme he

made hls

ruling or decislon on the refusal

to grant the

ad~ournment,

the Deputy Registrar referred to the provisions

- 6 -

of section

14 sub-section ( 5 )

of the Bankruptcv Act which

enabled a review of a decision made

by a Reglstrar or a

Deputy Registrar.

I read that sub-section:

"An order or

directlon made or given, or

act done, by a Registrar or

Deputy Reglstrar

under this Act is sub~ect to review on summary

appllcation to the Court."

Under

normal

circumstances,

an applicatlon to

review under sub-sectlon

( 5 )

of sectlon 14 would need to be

made pursuant to the provisions of the rules made under the

Bankruptcv Act and the provislons of the Bankruptcv Act

ltselt. Because of the urgency

of the matter, the Court has

allowed an oral applicatlon to

be made to review the decision

to	refuse the adlournment and has not requlred the normal

procedures to be followed. One defect

of thls course 1 s that

when the matter came on for hearlng thls morning, there was no transcript of the matters before the Deputy Reglstrar. In

those clrcumstances, after allowing Mrs. Petruk

tcr explaln to

the Court what she thought were the Issues and the problems

arlsing,

and

after

hearlng

from

Mr.

Braun

counsel

appearing for the Official Trustee, Mrs. Petruk was allowed to glve evidence as to why the ad~ournment should be granted. The Court refused Mr. Braun permission to cross-examlne Mrs. Petruk on her evidence.

- 7 -

The evidence, in addition to belng evidence

fact, also amounted to reasons why the

ad~ournment

should be

granted.

The Court refused Mr. Braun permission to call

other evidence relatlng to matters which had occurred before

the Deputy Registrar and also other matters

in relation to

some of the historical facts of this case. Mr. Braun opposed

the grantlng of the ad~ournment.

In the short tlme available

I have been unable to

find any authority as to the nature

of the review that the

Court undertakes under section

14 sub-section (5) of the Act,

and in partlcular, whether the review is by way

of rehearlng

on fresh evidence or merely

an examlnation of what was done

by the Registrar or Deputy Registrar and a determination made

or whether

there

any

defect

in that decision

which

Justlfles It being set aslde. My tentative view is that use of the word "review" illustrates that thls is not a

rehearlng, but is in the nature of

an examlnation of what was

done to decide whether any defect occurred in the sense of

was the Deputy Registrar in error, did he take into account

matters he should not have taken Into account, did he not

take Into account matters which he should have taken into

account, dld he mlsapply the law, andlor the other well-known

factors

which go to

decide

whether

the

exerclse

discretlon is valid

or not, or should be set aside or not?

- H -

On the tacts of this case I have heard further

evidence and, in accordance wlth the views expressed

by Mr.

Justice Lockhart in the case

I have already referred

to, and

by Mr. Justice Spender in the case already referred

to, I am

in a position where I can, if need be, exercise a

discretion

myself, but all I

can say on that is that if

I did have to

exercise that discretion I would be influenced largely by

what the Reglstrar,

or in this case the Deputy Registrar, In

fact said, and to that extent,

I would look at his reasons to

see whether he has acted In any way contrary to law.

In my oplnlon, the Reglstrar was quite correct in refusing to grant the ad~ournment. Thls 1 s not a case where the person summoned to glve evidence has had no opportunity

prepare.

There

has been

long

tlme

since

least

Oerember when she has known

ot the examlnation. She has said

in evidence that she

has had other problems In relation to

breaklngs-in of her tactory at Perth, problems in relation to

her busmess in Dandenonq,

lack of money and other matters.

But all that, in my

oplnion, 1 s irrelevant to the essential

Issue. There is

a publlc interest in the conduct of the

examinatlon under section

81 of the Act. Mrs. Petruk has had

knowledge of the examination, although she trles to

Justify

it by other reasons.

There

is no doubt that she has had to

be arrested on two separate occasions because

she had failed

to attend for the examination when she knew

of its existence.

At one time she did

have

legal representation, she says

the

moment

that

she

has no money to get

other

legal

representation. She has made application to the Legal

Aid

Commission for legal representatlon, that has been refused

and the policy

of the Commission, apparently, is not normally

grant

legal

ald

matters

bankruptcy

except in

relatlon to otfences, and there

no suggestion that Mrs.

Petruk is facing any offence charge at the moment.

also sald that as a result of what has occurred during the conduct of the exammation to date, it becomes even more important that she obtaln legal representatlon.

The fact

that

the

Bankruptcy

Act

allows

her

provlde legal representation, as sald by Mr. Justice Spender

representation 1 s not a guarantee that there will be funds to paragraph:

"It lust

cannot be that, unless there

1s a

guarantee of funds to provlde legal representatlon

persons

who

are

bankrupt,

helr

publlc

examlnatlons can be ad~ourned lndeflnltely. I am very conscious of the importance of the entitlement

to legal representatlon, and I am also

very

conscious that where a

person 1s a bankrupt, real

dlfficultles exist in relation to the obtalnlng of

proper legal asslstance."

The same may be sald

In relatlon to a wltness called,

or to a

person

called

glve

evldence

an exammatlon under

sectlon 81 of the Act.

But, having referred to the history

of this matter,

one is very concerned because

of the long delay

which has

already occurred.

The fact that Mrs. Petruk has In the

past

failed to attend and

has to

go through the expensive and

unsatlsfactory process

of being arrested in

Perth and brought

to Melbourne, the fact that in the past

she did have

legal

- 10 -

representation, the tact that the matter has been going on

for so long, the interest

of ~ustlce

requires and the publlc

interest requlres that the

exammation should proceed, and L

can see no reason why the

ad~ournment

should be granted.

Accordingly, the decision

of the Deputy Reglstrar

made on 30 April 1985 is confirmed.

The effect of all that

1 s that the examlnatlon

wlll contlnue In the normal way.