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

EXERCISING FEDERAL JURISDICTION ) No. 397 of 1984 ) )

RE: ANDY ROLPH ANTHONY PETRUK (also known as ANDY ROLPH ANTHONY BATES), a bankrupt

COURT: NORTHROP J. DATE: 1 MAY 1985 PLACE: MELBOURNE EX_TEMPORE REASONS FOR JUDGMENT

The present applicant, Mrs. Elizabeth Petruk, has been summoned under section &81 sub-section (1) of the

Bankruptcy Act 1966 to attend and give evidence. I. shail

"The Court or the Registrar may, on the application 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-

(b) a person who 1s 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 be able to give information concerning the bankrupt or his trade dealings, property or affairs,

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 or 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 said to be Andy Rolph Anthony Petruk (also known as Andy Rolph Anthony Bates). The Registrar 1ssued a summons under sub-section (1) of section 81 of the Bankruptcy Act and it was served on Mrs. Petruk, and she was required to attend initially at a hearing before the Registrar under section 81 on 4 December 1984. She did 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 a solicitor. The examination continued on that day. At the same time the Registrar was 1n the process of conducting an examination of

the bankrupt under section 69 of the Bankruptcy Act.

On 31 December 1984 the hearing of the examination under section 81 was adjourned to 20 March 1985. Mrs. Petruk did not attend on that resumed hearing of the examination. The hearing was adjourned to 2 April 1985. Notice of that hearing and air tickets from Perth to Melbourne to enable Mrs. Petruk to attend were served on Mrs. Petruk but again there was no appearance on 2 April 1985. A further warrant

was issued for her arrest. The hearing was adjourned to 24 April 1985 and after being arrested, Mrs. Petruk attended at

that further hearing. The examination was stood down to

allow an interpreter to be present and application to be made by Mrs. Petruk tor legal aid, and also tor application to be

Legal aid was refused; the hearing resumed on 26 April and on this occasion, or shortly after I should say, on 29 April, after the weekend, the refusal of the legal aid was confirmed by a letter from the Legal Aid Commission given to Mr. and Mrs. Petruk. I shall read that letter:

"I regret that your application for legal assistance has not been approved for the reasons given below.

If you are dissatisfied with this decision you are entitled to have 1t reconsidered. If you wish that to be done, you should write to the Commission

within 14 days of the date of this letter setting out reasons why the decision should be changed.

There are then set out the reasons for non-approval, and I

"Having regard ta all relevant matters, the Commission does not consider that it 1s reasonable to provide legal assistance in this case.

On the information provided the Commission believes that the extent of any benefit or gain you would receive 1f legal assistance was provided, would not justify the cost to the Legal Aid Fund.

Assistance will not normally be provided for matters under the Bankruptcy Act unless the applicant is charged with an offence which may result ina jail sentence."

Eventually on 30 April, the examination was resumed

before the Registrar and Mrs. Petruk renewed her application for an adjournment 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 to the Human Rights Commission, and as appears from evidence given 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 8l, sub-section (7) of the Bankruptcy Act. That

"A person summoned to attend before the Court, the Registrar or a magistrate for examination under this section 1s entitled to be represented, on his examination, by counsel or a solicitor, whoa may re-examine him after his examination."

the Bankruptcy Act 1s referred to in a judgment of Mr.

Justice Lockhart in Re: Csidei; Ex parte: Andrew (1979) 39 F.L.R. 387 and at page 390 after setting out section 81,

"The corresponding section in the Bankruptcy Act 1924 was s.80 which was substantially taken from s.25 of the Bankruptcy Act, 1914 (lmp.). 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 35 Henry 8 c. 4, s. 2, and was continued by 13 Eliz. 1 c. 7, s. 5; 1 Jac. 1c. 15, 5s. 10; 6 Geo. 4c. 16, s. 33, and, the Act of 1849 (Imp.), s. 120.

The purpose of the section is to elicit information that may be relevant for the proper conduct ot the bankruptcy and that may aid the

process of finding and recovering assets available for distribution."

The purpose of the section is of importance and it has been Summarised 1n that passage which I have just read. The

equivalent power to have a public examination of a bankrupt

under section 69 of the Act 1s also relevant in this case and in a judgment given on 21 February 1985 in the Federal Court

of Australia in the matter of Re: William James Whitla and

Desleigh Marise Whitia; Ex parte: Alan Richard Taylor, Mr.

"The object of a public examination of a bankrupt 1s not merely to obtain a full and complete disclosure of the assets of the bankrupt, and the tacts relating to the bankruptcy, in the interests of the creditors of the bankrupt, but

also to protect the public. It 1s an administrative inquiry, but it is nonetheless important for that fact. It can involve quite

serlous consequences as some of the sub-sections of 5.19 tend to indicate."

By a decision made on 30 April 1985, that 1s yesterday, the Deputy Registrar conducting the examination refused the application for an adjournment and his' reasons for that refusal appear at pages 166 to 167 of the transcript of the examination, The Registrar had before him all the facts to which I have previously referred. At the time he made his ruling or decision on the refusai to grant the

adjournment, the Deputy Registrar referred to the provisions

of section 14 sub-section (5) of the Bankruptcy Act which

enabled a review of a decision made by a Registrar or a Deputy Registrar. I read that sub-section: "An order or direction made or given, or an act done, by a Registrar or a Deputy Registrar

under this Act 18 subject to review on summary application to the Court."

Under normal circumstances, an application to review under sub-section (5) of section 14 would need to be

made pursuant to the provisions of the rules made under the

Bankruptcy Act and the provisions of the Bankruptcy Act

itselt. Because of the urgency of the matter, the Court has allowed an oral application to be made to review the decision to refuse the adjournment and has not required the normal procedures to be followed. One detect of this course is that when the matter came on for hearing this morning, there was no transcript of the matters before the Deputy Registrar. In those circumstances, after allowing Mrs. Petruk to explain to the Court what she thought were the issues and the problems arising, and after hearing from Mr. Braun of counsel appearing tor the Official Trustee, Mrs. Petruk was allowed to give evidence as to why the adjournment should be granted. The Court refused Mr. Braun permission to cross-examine Mrs.

The evidence, in addition to being evidence of fact, also amounted to reasons why the adjournment should he granted, The Court refused Mr. Braun permission to call other evidence relating 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

In the short time 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 particular, whether the review 1s by way of rehearing on fresh evidence or merely an examination of what was done by the Registrar or Deputy Registrar and a determination made or whether there 1s any defect ain that decision which justifies it being set aside. My tentative view is that use of the word ""review" illustrates that this 1s not a rehearing, but 1s in the nature of an examination 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, did he misapply the law, and/or the other well-known factors which go to decide whether the exercise ot a

discretion 1s valid or not, or should be set aside or not?

On the facts of this case I have heard further evidence and, in accordance with the views expressed by Mr. Justice Lockhart in the case I have already referred to, and by Mr. Justice Spender in the case already reterred to, I am in a position where I can, 1f need be, exercise a discretion myself, but all I can say on that 1s that if I did have to exercise that discretion I would be influenced largely by what the Registrar, 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 opinion, the Registrar was quite correct in refusing to grant the adjournment. This 1s not a case where the person summoned to give evidence has had no opportunity to prepare. There has been a long time since at least December when she has known ot the examination. She has said in evidence that she has had other problems in relation to breakings-in of her factory at Perth, problems in relation to her business in Dandenong, lack of money and other matters. But all that, 1n my opinion, is irrelevant to the essential 1ssue. There 1s a public interest in the conduct of the examination under section 81 of the Act. Mrs. Petruk has had knowledge of the examination, although she tries to justify it by other reasons. There 1s 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 at the moment that she has no money to get other legal

representation. She has made application to the Legal Aid

Commission for legal representation, that has been refused and the policy of the Commission, apparently, 1s not normally to grant legal aid in matters of bankruptcy except in relation to otfences, and there 18 no suggestion that Mrs. Petruk 1s facing any offence charge at the moment. It 15s also said that as a result of what has occurred during the conduct of the examination to date, it becomes even more

The fact that the Sankruptcy Act allows her representation 1s not a guarantee that there will be funds to provide legal representation, as said by Mr. Justice Spender in the case reterred to already, and I quote the relevant paragraph:

guarantee of funds to provide legal representation to persons who are bankrupt, their public examinations can be adjourned indefinitely. I am

very conscious of the importance of the entitlement to legal representation, and I am also very

conscious that where a person is a bankrupt, real difficulties exist 1n relation to the obtaining of proper legal assistance."

The same may be said in relation to a witness called, or toa

person called to give evidence in an examination under

But, having referred to the history of this matter, one 1S 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 unsatisfactory process of being arrested in Perth and brought

to Melbourne, the fact that in the past she did have legal

representation, the tact that the matter has been going on for so long, the interest of justice requires and the public interest requires that the examination should proceed, and [I

can see no reason why the adjournment should be granted.

Accordingly, the decision of the Deputy Registrar made on 30 April 1985 is confirmed. The effect of all that

1s that the examination will continue in the normal way.