Federal Court of Australia

Pekar v Jess (Trustee) [2021] FCA 1519

ORDERS

THE COURT ORDERS THAT:

1.    The interlocutory application filed on 1 December 2021 on behalf of Ida Pekar be dismissed.

2.    There be no order as to the costs of the application.

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

REASONS FOR JUDGMENT

(Delivered ex tempore and revised)

MORTIMER J:

1    An urgent interlocutory application was filed today in proceeding VID 81 of 2017 on behalf of Ida Pekar. Mrs Pekar is the wife of Fima Pekar. Fima Pekar has been contesting various proceedings about his bankruptcy for a considerable period of time. The interlocutory application seeks:

There be a stay of these proceedings (including any warrant issued) pending the appointment of a suitable litigation guardian for Ida Pekar and Fima Pekar.

2    The warrant of possession in favour of Mr Pekar’s trustee in bankruptcy was issued in 2021, consequent upon orders made by Tracey J in this Court in 2017. Those orders followed an appeal from the Federal Circuit Court made earlier that year, in which Mr Pekar appealed from orders of the Federal Circuit Court, which declared a transfer of property from Mr Pekar to Mrs Pekar to be void against Mr Pekar’s trustee in bankruptcy (see Holden in His Capacity as Trustee of the Bankrupt Estate of Pekar v Pekar [2017] FCCA 22). Tracey J dismissed that appeal, but did vary the Federal Circuit Court orders to recognise Mrs Pekar’s pre-existing half-interest in the couple’s home in East St Kilda (see Pekar v Holden (Trustee) [2017] FCA 596). As the trustee has pointed out in some correspondence exhibited to affidavits filed in support of the interlocutory application, those were final orders made by Tracey J, and there was no appeal from those orders.

3    I should mention here that the interlocutory application today was supported by two affidavits, one by Christine Hopkins, dated 29 November 2021, and one by Lana Roccisano, dated 1 December 2021. Ms Hopkins is a solicitor and appeared at the hearing to contend that interlocutory relief should be granted. Each of those affidavits annexed a number of documents.

4    After Tracey J’s orders in 2017, a number of events occurred, which are traced in the reasons of Moshinsky J in Pekar v Jess (Trustee) [2020] FCA 1250, and I do not repeat that narrative here. Before Moshinsky J, there was an application by the then trustee to vacate an order made by consent on 18 July 2017 staying the order for possession made by Tracey J in May 2017 in respect of the home of Mr and Mrs Pekar. Mr Pekar was represented pro bono by a capable and experienced counsel in that matter before Moshinsky J. Moshinsky J had already dealt with an earlier dispute between the parties in 2019. Moshinsky J vacated the consent order, which exposed Mr and Mrs Pekar’s property to the warrant of possession again. There was no appeal, or application for leave to appeal, from Moshinsky J’s orders.

5    It is unclear from the material I have how a next, significant, step came about, but I note in the reasons for judgment of O’Callaghan J (Pekar v Jess (Trustee) [2021] FCA 1325), to which I will turn shortly, that on 26 February 2021 Snaden J made an order that, pursuant to s 37AO(2)(b) of the Federal Court of Australia Act 1976 (Cth), Mr Pekar be prohibited from instituting any proceedings in this Court other than under s 104 of the Bankruptcy Act 1966 (Cth).

6    The Court has been informed today that the warrant for possession of the home of Mr and Mrs Pekar was issued on 25 March 2021, and that notices to vacate the property were given to Mr and Mrs Pekar in July of 2021, but the warrant has not yet been executed. It is, the Court has been informed, to be executed tomorrow, 2 December 2021: hence, on Ms Hopkins’ submission, the urgency of this application.

7    Aside from what is contained in the reasons of O’Callaghan J, there is no material before the Court about what has happened between July 2021 and today, in terms of action taken by Mr and Mrs Pekar to stay the execution of the warrant or otherwise avoid having to vacate their home. Mr Moon, on behalf of the trustee, who appeared today, informed the Court that on 28 October 2021, a sequestration order was made against Mrs Pekar’s estate, and that her trustee is a Mr Juratowitch. Mr Moon correctly observed that, if an application is to be made on behalf of Mrs Pekar, it should be made by her trustee in bankruptcy, and it is not.

8    One thing that was apparent in Ms Hopkins’ submissions, and which I accept, is that underlying all this is a serious personal tragedy for Mr and Mrs Pekar, an imminent one, in that they are facing the prospect of being evicted from their home tomorrow. There is absolutely no basis in the material I have seen to believe there is anything unlawful about that eviction at the moment, but it can be said, I think fairly, that no doubt it is a personal tragedy for Mr and Mrs Pekar.

9    Ms Hopkins has informed the Court that she became involved in this case approximately two weeks ago, and in her affidavit she deposes to her understanding of some of the situation facing Mr and Mrs Pekar, and what she describes in her affidavit as her difficulties in obtaining instructions from them.

10    There is no explanation in evidence before me, so far as I can see, about why the interlocutory application was only lodged today. Ms Hopkins informed the Court during her submissions that she has spoken to Mr and Mrs Pekar’s son. He is not at the moment prepared to be a litigation guardian on behalf of his parents, or certainly has not instructed Ms Hopkins to that effect.

11    Ms Hopkins also informed the Court that, although the interlocutory application states that it is prepared by her, she did not have instructions from Mr and Mrs Pekar to file the interlocutory application because, on her view of the circumstances, they are not capable of giving her those instructions. Therefore, the position appears to be that this interlocutory application has been filed without instructions from Mr and Mrs Pekar, and is not filed on the instructions of anybody purporting to be their litigation guardian. Indeed, when I asked Ms Hopkins if there was someone prepared to be a litigation guardian, she responded that there did not appear to be, and that it may be necessary to involve the Public Trustee.

12    In answer to some questions from the Court, Ms Hopkins also informed the Court that there had not been any application to the Victorian Civil and Administrative Tribunal for any guardianship orders. She agreed that this should have happened, but she referred to the urgency of the situation, although, as I now understand it, she has been involved in the matter for approximately two weeks, and yet there has been no guardianship application.

13    Returning to the narrative, after Moshinsky J’s decision, from which there was no appeal or application for leave to appeal, Mr Pekar, representing himself and Mrs Pekar, appeared before O’Callaghan J on 27 October 2021, just over a month ago. Mr Pekar was given leave to assist Mrs Pekar at that hearing. O’Callaghan J’s reasons – see Pekar v Jess (Trustee) [2021] FCA 1325 – describe that there were two applications before his Honour. Firstly, an application by Mrs Pekar against Mr Pekar’s trustee to set aside the orders of Tracey J; second, an application by Mr Pekar for leave to institute proceedings, I infer to seek the same kind of relief.

14    O’Callaghan J’s reasons indicate that his Honour heard how these applications were put, and also heard from the trustee and determined, at [8], that it was not open to Mrs Pekar or Mr Pekar “again to seek an order setting aside” Tracey J’s orders. His Honour continued:

That is because they are, as Moshinsky J explained, final orders which determined the appeal.

15    Nevertheless, his Honour went on to consider the merits of what Mr Pekar and Mrs Pekar had put to him, including the size of the bankrupt estate, which was a matter raised by Ms Hopkins today. The finding made by O’Callaghan J, which is a finding that binds both Mr Pekar and Mrs Pekar, is that the liabilities of the bankrupt estate currently exceed $534,000. As Mr Moon noted, there were costs orders made by O’Callaghan J on that date, and therefore the bankrupt estate would have increased since that time. O’Callaghan J dismissed the remainder of the arguments put in the hearing before him and dismissed the application.

16    What has happened in the month since O’Callaghan J’s orders appears to be that Ms Hopkins has been approached, as a solicitor who has not been involved in the matter before. I accept that in good faith she has attempted to assist Mr and Mrs Pekar, and possibly members of their family, to find a solution to their predicament. However, I also note that it appears to be that their predicament, particularly in terms of the size of the liabilities, is largely of their own making.

17    In the material that is filed is a letter from Rothwell Lawyers on behalf of the trustee, dated 30 November 2021, which comprehensively sets out the background to this matter, and I have taken that letter into account in reaching the conclusions that I have reached. I also note that in that letter there is an offer on behalf of the trustee to try to resolve the predicament that Mr and Mrs Pekar find themselves in. The legal representatives of the trustee say that:

…they remain open to any satisfactory offer of resolution and will entertain such offers up until the execution of any contract of sale for the Property. This provides your clients with ample time to make such an offer, given the Property is not even listed for sale yet.

18    There does not to this point seem to have been any discussions between the parties pursuant to that invitation. As Mr Moon observes, there seems to be time for that to occur before any sale of the property even if Mr and Mrs Pekar have to vacate the property. I do not accept Ms Hopkins’ submissions that Mr and Mrs Pekar will be “homeless”, in light of what I have heard and read in the evidence about their family being involved in their bankruptcy matters to this point, and at least in some conversations with Ms Hopkins.

19    So it seems to me that there may be room for the parties to negotiate, and if there are responsible practitioners involved, one would hope that something may be done about that. Of course, as Ms Hopkins accepted and recognises, the initial problem is to determine whether Mr and Mrs Pekar are capable of instructing lawyers, and, if not, to appoint an appropriate guardian to do so; but those steps are not the concern of this Court, in circumstances where no proposal for a litigation guardian has been put before the Court, and there is no evidence that the appropriate forum for the appointment of a guardian at a more general level, namely, the Victorian Civil and Administrative Tribunal, has been approached. I note also that in its 30 November 2021 correspondence, and elsewhere in the evidence, the trustee rejects the contention that Mr and Mrs Pekar lack capacity to give instructions and conduct proceedings.

20    So where this leaves the Court today is that, firstly, while the Court can be sympathetic to the predicament outlined by Ms Hopkins, there is no interlocutory application before the Court that is filed with instructions from Mrs Pekar (or Mr Pekar for that matter, although he is not a party to the proceeding). Secondly, even if that were to be overlooked (which it should not be), there is no basis to suppose that the relief sought in the interlocutory application is even arguable in the light of the decisions of O’Callaghan and Moshinsky JJ, and the absence of any appeals or applications for leave to appeal from those decisions. Thirdly, there has been nothing else advanced before the Court today to persuade me that there is any other alternative to the dismissal of this application, and so, again, assuming in favour of Mr and Mrs Pekar that interlocutory application is properly before the Court, there is no basis for the Court to interfere with what is proposed to occur tomorrow. Accordingly, I propose to dismiss the interlocutory application.

Associate:

Dated:    2 December 2021