Federal Court of Australia

Pekar v Jess (Trustee) [2021] FCA 1325

Appeal from:

Pekar v Holden (Trustee) [2017] FCA 596

File number(s):

VID 81 of 2017

Judgment of:

O'CALLAGHAN J

Date of judgment:

27 October 2021

Catchwords:

BANKRUPTCY – application to set aside orders for possession of the home of the appellant and her husband (a former bankrupt) – application dismissed

PRACTICE AND PROCEDURE – application for leave to institute proceedings – where applicant previously declared vexatious and prohibited from instituting proceedings under s 37AO(2)(b) of the Federal Court of Australia Act 1976 (Cth) – application dismissed

Legislation:

Bankruptcy Act 1966 (Cth) s 58(2)

Transfer of Land Act 1958 (Vic) s 51(2)

Cases cited:

Pekar v Jess (Trustee) [2020] FCA 1250

Division:

General Division

Registry:

Victoria

National Practice Area:

Commercial and Corporations

Sub-area:

General and Personal Insolvency

Number of paragraphs:

15

Date of hearing:

27 October 2021

Counsel for the Appellant:

The appellant appeared in person, with the assistance of her husband, Mr Fima Pekar

Solicitor for the Respondent:

Mr J Blaskovic of Rothwell Lawyers Pty Ltd

ORDERS

VID 81 of 2017

BETWEEN:

IDA PEKAR

Appellant

AND:

MATTHEW JAMES JESS AND MATTHEW KUCIANSKI AS JOINT TRUSTEES IN BANKRUPTCY FOR THE ESTATE OF FIMA PEKAR

Respondent

order made by:

O'CALLAGHAN J

DATE OF ORDER:

27 OCTOBER 2021

THE COURT ORDERS THAT:

1.    The appellant’s interlocutory application dated 5 July 2021 be dismissed.

2.    Mr Fima Pekar’s application for leave to institute a proceeding dated 18 May 2021 be dismissed.

3.    The respondents’ costs of the applications be taxed and paid out of Mr Fima Pekar’s bankrupt estate in accordance with s 109(1)(a) of the Bankruptcy Act 1966 (Cth).

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

Revised from transcript

O’CALLAGHAN J:

1    I have before me two applications. The first is brought by Mrs Ida Pekar against the respondent trustees of the bankrupt estate of Mr Fima Pekar, seeking the setting aside of orders made by Tracey J on 30 May 2017. The second application is brought by Mr Pekar, seeking leave to institute a proceeding under the Bankruptcy Act 1966 (Cth) (Bankruptcy Act) and the Federal Court of Australia Act 1976 (Cth) for annulment of his bankruptcy. He needs such leave because on 26 February 2021 Snaden J made an order that, pursuant to 37AO(2)(b) of the Federal Court of Australia Act 1976 (Cth), Mr Pekar be prohibited from instituting in any registry of the Federal Court of Australia any proceedings other than proceedings instituted pursuant to 104 of the Bankruptcy Act.

2    The relevant history is set out in the judgment of Moshinsky J in Pekar v Jess (Trustee) [2020] FCA 1250 from [11]–[51]. No purpose is served in repeating what his Honour said.

3    At the hearing this morning, Mr Pekar appeared self-represented. I also granted him leave to make submissions on behalf of Mrs Pekar.

4    The submissions in support of both applications were similar. I should also note that in respect of Mrs Pekar’s application, the written document was expressed as seeking a stay of the orders made by Tracey J on 30 May 2017, or the setting aside of those orders. At the hearing, Mr Pekar said that Mrs Pekar sought the setting aside of the orders, not the staying of them.

5    The orders of Tracey J were made in the context of an appeal brought by Mrs Pekar from the judgment orders of the Federal Circuit Court. As Moshinsky J said at [18] of his reasons, although Mrs Pekar’s appeal was dismissed, his Honour varied the terms of the order made by the Federal Circuit judge to recognise Mrs Pekar’s pre-existing half interest in the property at Unit 1, 64 Alexandra Street, East St Kilda.

6    The orders made by Tracey J relevantly included the following:

2.    The appeal be dismissed.

3.    Paragraphs 2, 3, 4, 5, 9, 10 and 11 of the declarations and orders made by the Federal Circuit Court on 20 January 2017 be set aside.

4.    In lieu thereof it be declared and ordered that:

(2)    The Bankrupt’s interest in the Property vests in the Applicant (the trustee of the bankrupt estate of Mr Fima Pekar).

(3)    The Respondent (Mrs Ida Pekar) and the Bankrupt (Mr Fima Pekar) deliver vacant possession of the Property to the Applicant on or before 30 June 2017. If the Respondent and the Bankrupt fail to comply with this order, a warrant of possession issue forthwith in favour of the Applicant.

(4)    The Respondent and the Bankrupt remove all personal possessions from the Property on or before 30 June 2017. Any personal property remaining at the Property after that date be deemed to have been abandoned and be disposed of in any manner as the Applicant sees fit.

(5)    The Applicant be appointed trustee for the sale of the Property. The Applicant is to have the sole conduct of the sale of the Property and be authorised to instruct an agent and/or an auctioneer for that purpose.

7    As a result of the circumstances dealt with by Moshinsky J in Pekar v Jess (Trustee) [2020] FCA 1250, the detail of which is not relevant now, the orders made by Tracey J remain on foot. As Moshinsky J explained at [56], the orders of Tracey J were final orders determining the appeal. As his Honour explained, it was not open to him to set aside those orders pursuant to the court’s supervisory jurisdiction in relation to the bankruptcy. In any event, as his Honour also explained, even if the court did have such power, for the reasons his Honour gave, it was not appropriate to set aside the orders.

8    Similarly, it is not now open to Mrs Pekar or Mr Pekar again to seek an order setting aside those orders. That is because they are, as Moshinsky J explained, final orders which determined the appeal. But in any event, the grounds sought to be contended for with respect to both the applications before me are without merit.

9    The first ground is that the bankrupt estate is free of any debts. That submission is without merit, because the evidence before me is that the liabilities of the bankrupt estate currently exceed $534,000. In that regard, I refer to [41] of the affidavit of Mr Kucianski, dated 4 August 2021.

10    The second ground is that the orders of Tracey J were obtained by fraud, but there is no basis for such an allegation.

11    The third ground is that the trustee is not registered on the title of the property, and that the trustees have not complied with s 58(2) of the Bankruptcy Act and s 51(2) of the Transfer of Land Act 1958 (Vic) in that no application has been made to register them on the title of the property. But there is no legal requirement for the trustees to make any such application or to register their interest in the property on the title. The sections that are sought to be relied upon instead provide a mechanism for the trustees to register a legal interest in the property. The trustees’ interest in the property is not affected. It follows, as the trustees submit, neither of those sections provides any basis for the court to stay or set aside the orders of Tracey J.

12    The fourth ground is that Mr Pekar and/or Mrs Pekar own property to the value of $900,000, and have cash at bank in excess of $200,000. It was contended that, accordingly, there was no need for an order of the type made by Tracey J that the property be sold. But the ability of one or other, or both, of the applicants now to pay debts as and when they fall due has no bearing upon the validity of orders made by Tracey J in 2017.

13    A further submission was made orally this morning by Mr Pekar that the application that led to the making of the orders by Tracey J was out of time. I confess that I found the submission difficult to understand, but there was no conceivable merit in it.

14    In my view, the grounds of both applications are entirely without merit, and there is no basis whatsoever, for the reasons I have expressed, for me to make any order setting aside the orders made by Tracey J on 30 May 2017, or to grant leave to Mr Pekar, now, to bring an application seeking the annulment of his bankruptcy. Such an application would be doomed to fail.

15    I will accordingly order that each of the applications be dismissed and that the applicants pay the respondents’ costs of the applications to be taxed and paid out of the bankrupt’s estate.

I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice O'Callaghan.

Associate:

Dated:    29 October 2021