FEDERAL COURT OF AUSTRALIA

Pelechowski, in the matter of Pelechowski v NSW Land & Housing Commission

[2000] FCA 233

BANKRUPTCY – whether suit brought by applicant under Workplace Relations Act 1996 (Cth) includes claim for personal injury – whether suit may be continued despite bankruptcy – whether time for Official Trustee to elect to prosecute should be extended.

Bankruptcy Act 1966 (Cth), ss 33(1)(c), 60(3), 60(4)(a)

Workplace Relations Act 1996 (Cth)

Cox v Journeaux (1935) 52 CLR 713, applied

IN THE MATTER OF KARL PELECHOWSKI

KARL PELECHOWSKI v NSW LAND AND HOUSING COMMISSION & ANOR

NI 2875 of 1995

MADGWICK J

17 FEBRUARY 2000

SYDNEY

IN THE MATTER OF KARL PELECHOWSKI

THE COURT ORDERS THAT:

1.         The applicant file and serve upon the Official Trustee or its solicitor today the Statement of Affairs as required under the Act.

2.         Conditionally upon compliance with that order, time is extended for the trustee to make his election for fourteen days from today.

3.         The matter is to be listed for further directions on Wednesday, 8 March 2000 at 9.30 am.

IN THE MATTER OF KARL PELECHOWSKI

REASONS FOR JUDGMENT

(revised from transcript)

HIS HONOUR:

1                     This is an application to review the decision of a Judicial Registrar.  It is presently unclear (and irrelevant) whether the matter is before the Industrial Relations Court of Australia or the Federal Court of Australia and, as I am a Judge of both courts, it does not matter for practical purposes:  it is in one or the other and I exercise all the powers and authority available to me under whichever of the Acts should prove to be relevant.  This is not mere ignorance on my part.  To the best of my recollection there are conflicting Full Federal Court decisions which may have a bearing on a matter like this and I would not be prepared to decide the matter quickly, especially given that there is no need to do so. 

2                     The decision of the Judicial Registrar concerned an application by Mr Pelechowski to the Industrial Relations Court for relief.  Principally he sought re-instatement for what he says was unlawful termination of his employment by the Department of Housing (now the NSW Land and Housing Commission).  The Department had dismissed Mr Pelechowski for alleged rank inattention to duty and other matters.  Mr Pelechowski's claims were that he had uncovered an instance of personal corruption on the part of a fellow employee and upon his raising the matter, those employees and persons sympathetic to them had conspired to get rid of him.  After a lengthy hearing the Judicial Registrar dismissed the application, finding that there was no substance in it and finding that he had been guilty of serious misconduct. 

3                     Arising out of unrelated legal proceedings Mr Pelechowski was made bankrupt by an order of the Federal Court which took effect on 17 April 1998.  The evidence before me strongly suggests that Mr Pelechowski has been avoiding the service upon him of documents which direct him, as he is obliged to do, to complete and file a Statement of Affairs with the Official Receiver and to attend his public examination.  Mr Pelechowski claims here that he really does not know what the bankruptcy is all about, that he did not know who the petitioning creditor was, and so forth. The Official Trustee was notified on 23 September 1999 of the present proceedings.

4                     Mr Pelechowski says that, since he has suffered personal injury, he may continue to bring this suit, despite the bankruptcy, in his own name.  Part of the complaint against Mr Pelechowski by the Department had been, as I understand it, that he devoted unnecessarily large amounts of time to processing a worker's compensation claim.  However, the relief that Mr Pelechowski sought was of an economic nature and, while in certain circumstances the Court could award compensation that might include something in the way of damages for personal injury (for example psychiatric injury arising out of the circumstances of an unlawful termination of employment), so far as I can see, Mr Pelechowski made no such claim in the proceedings before the Judicial Registrar.  There was no assertion by Mr Pelechowski before me that he wishes to pursue any such claim (although, I also have little doubt that some such claim will be asserted and that today’s events will spawn further voluminous proceedings).  From the material before me, as matters presently stand, any such assertion would appear to be entirely unsustainable. In my opinion, they do not fall within paragraph 4(a) of s 60 of the Bankruptcy Act 1966 (Cth) (“the Act”). 

5                     There is in reality no claim for anything in the nature of damages which would be “estimated by immediate reference to pain felt by the bankrupt in respect of his mind, body or character and without reference to his rights of property”:  see Cox v Journeaux (1935) 52 CLR 713 at 721.  The essential element of proceedings for illegal termination of employment under the Workplace Relations Act 1996 (Cth), is that one's economic relations with one's former employer have been disrupted.  Those economic relations depend upon contract, or perhaps in the case of a public servant, a statutory relationship, but nevertheless of a contractual or quasi-contractual kind, that is to say, property rights are at the heart of the proceedings.

6                     Thus, there not having been an election within 28 days after notice of the action was served upon the trustee by the respondent department, the trustee is deemed to have abandoned the action, according to s 60(3) of the Act.  However, the Official Trustee, no more than the Court, wishes to deprive Mr Pelechowski of the opportunity to have the Trustee make an election to prosecute the action.  Section 33(1)(c) of the Act permits the Court to extend, even after its expiration, "any time limited by this Act ... for doing an act or thing" unless the Act expressly provides to the contrary.  I can see no express provision to the contrary and I think therefore that I have power to extend the time during which the Trustee might make that election for a short period.  Having regard to the suggestion by the Trustee, through his solicitor, that it is reasonably possible administratively to make such an election quickly and also having regard to the long delays which, through no fault of the first respondent, have occurred in the progress of the matter, it is desirable to extend the time.

7                     Mr Pelechowski has informed me that he is in the process of attempting to mount proceedings to set aside the bankruptcy.  They will be proceedings in the Federal Court.  If he succeeds, then the effect of s 60 of the Act on the Department's action will presumably also be vacated (although after an opportunity to the Department to put any submissions it might wish to the contrary).  It seems highly likely that if Mr Pelechowski does institute any such proceedings, they will be resisted on grounds which will include discretionary ones and Mr Pelechowski's attitude as to compliance with the law may well be relevant.

8                     In these circumstances, it seems to me to be part of the entire dispute whether the Official Trustee should have, for Mr Pelechowski's benefit, any extension of time so that some steps may be taken to put right the delay which has occurred.  However, an order extending time should be made conditional upon the filing of a Statement of Affairs today.  Mr Pelechowski consents to the making of such a conditional order.

9                     I direct that:

(1)        the applicant file and serve upon the Official Trustee or its solicitor today a Statement of Affairs as required under the Bankruptcy Act;

(2)        conditionally upon compliance with that order, I will extend the time for the Trustee to make his election for fourteen days from today, and;

(3)        in order to enable the orderly disposition of the matter in this Court, I will list the matter for further directions on Wednesday, 8 March 2000 at 9.30 am.

The questions of costs can await the Court knowing whether the Official Trustee, in the event, is going to prosecute the action or not.

Associate:

Dated:              17 February 2000