bor IN THE FEDERAL COURT uF AUSTRALIA BANKRUETC? DIVISION of THE NO. 397 of LIK STATE OF VTOTUPIA GENERAL DIVIS fon EX TEMPOUPE JUDGMENT Between: ANDY ROLF ANTHONY PETRUK «ALSO KNOWN AS ANDY ROLE ANTHUNY BATES | Ex parte: THE OFFICIAL 'TRUSTEE IN BANKRUPTCY Applicant and ELISABETH MARIA FPETRUK Respondent THE COURT: Smithers, J. DATE : 2 April, 15986 ELACE : Melbourne Reasons for Judqment There 15 betore me this day an application to the court on behalf of the urticial Trustee in Bankruptcy ain the State of Victoria as trustee of the estate of Andy kolf Anthony Petruk, also known as Andy Roit Anthony Bates, as trustee or the estate of bu that bankrupt for the tollowing orders: 1. Fore punishment or the respondent, Elizabeth Maria Fetruk, tor the contempt or court, in that she did on 7 May 1985 refuse to answer the question, "How many windsurrers does your husband own-'" when directed by the Court to do so; 2. For an order that the respondent pay the applicant s costs of this application. When thi3 application wags called on, the respondent, Mrs Fetruk, immediately addressed the court, indicating that there was some reason why I personally should not hear this case; secondly, that there was a reason why no Judge or the Court should hear the case inasmuch as, as I understood it, there had been a break down in the continuity or the litigation in respect of the cause of action brought before me today. The respondent showed signs or departing trom the Court unless [I was prepared forthwith to accept her submissions. Accordingly, I unformed Mrs Petruk that, although she was at liberty to leave the Court whenever she felt inclined, her departure would not bring the proceedings before me to an end, and even if she lett the court, it would be nocessary tor me to proceed to ascertain whether [ should hear the case and, 1f [I thought I should, to proceed with it to a conclusion. Atter Mrs Petruk had spoken at some length about the matter, I undicated to her that 1t was desirable that, unless she had more wat to say, [ should hear counsel ror the applicant. she did have more to say and, in saying 1t, developed a state or stress and was reduced to some tears and, indeed, encouraged by her husband, ultimately Lert the court protesting that justice in effect was hard to obtain. When Mrs Petruk had lett, [I heard counsel tor the applicant, who outlined the course of the proceedings in this matter, which went back well berore May 1985. The matter or the contempt arose out of proceedings before the Deputy Registrar in Bankruptcy, which came on betore him on 6 May 1y985, during the course of which Mes Petruk, beang in the course of examination pursuant to section 81 of the Bankruptcy Act 1966, refused to answer a certain question. Conzequent upon that, the Registrar, as he was authorized ta do under section 981, made an order that the cxamination of Flizabeth Maria Petruk under section 81 of the Act be adjourned tor hearing before the Court at 10.15 am on / May 1985. That order was made on 7 May 1985. There was available to hear it a Judge ot this Court, Mr Justice Woodward, who forthwith commenced the hearing of the examination. In the course of the examination, his Honour said to Mr and Mrs Petruk, who were both present, that he wanted to say something to them and said: "I want to be sure that you understand what I am saying, so if you have any doubt ask Mr McCauliffe. You can interrupt me. Perhaps he should stand between you." Mes Petruk said; "in the middle". His Honour replied: "Yes, in the middle. I want you to understand that a person who refuses to answer questions in a case such as this, whether 1 1s the bankrupt person himself or another person having knowledge of the circumstances, as tn the case or Mrs Petruk, can be required to answer questions by the Court and ir they refuse to answer that person can be committed to prison tor contempt of court until they agree to answer." It seems that his Honour continued: "Now, the point I want to make clear is that to refuse to answer a question un the Court 1s avery serious thing to do, and you can finish in prison as a_ result. Now that I have explained that to vou, I want to give you each another chance to answer the questions that will be put to you, and ir you refuse to answer those questions I will listen to anything you have to tell me as to why I should not punish you, but you must understand that there 1s a very real risk that you will be punished 1f you retuse to answer the questions. Now, do you understand what [£ have been saying?" The debtor answered; Yes I understand. The interpreter said; "Mrs Petruk did not understand fully. Iwill - - -" His Honour said: "Mr Petruk, will you first come back into the witness box?" And that he did. In due course, Mrs Petruk went into the witness box and was sworn. There does not appear £0 have been any turrher conversations as to whether she understood what had been said by the learned Judge, but 14 15 particularly unlikely that she did not because she has a very good command or the English Languaqe. It 18 apparent from the transcript ot 7 May L9R5 that she had such a good command or the English language at that stage, as indeed her tirst answer to the first question was: "Tt is already said yesterday before the deputy Registrar, Mr Ellis, that this hearing as well as alli previous hearings, have been achieved under section 264 of the Bankruptcy Act 1966, and TI honestly fear to answer any more questions, and JT have explained this in detail, and I explained in detail before that to the Honourable Justice Northrop, and [I wanted to qive some evidence to your Honour, you know, even if you simply look at the summons I received, you know, this summons represents the sample or 264." The matter proceeded and she continued to give evidence. The general notion of 1t was that she continued to assert she was atraid to answer questions. In due course Mr Braun, acting on behalf of the official Receiver, said to Mrs Petruk, "how many windsurrers does your husband own?" and she said: "Your Honour, [£ am afraid to answer any more questions, and I would like to have all matters investigated under section 264 of the Bankruptcy Act. IL am with no legal representation. I have tried to get legal aid because I have no money, and it has been refused and [ would like to apply again, you know, to exercise my rights under the Legal Rights Commission or Legal Aids Commission Act, or get legal aid, have someone representing me and H1s Honour replied: "Well, Mes Petruk, I would like you to tell me why it 18 that you say you are atraid to answer a question 1ike that. How can answering a question about windsurters bring you to any harm?" Mrs Petruk replied: "Sir, 1t 18 not the question about the windsurfers, your Honour - - -" His Honour replied: "Well, that 1s the question that you have been asked to answer." Mrs Petruk said: "TE 1s a question why I am here, and I am here because this hearing has been achieved as a result ot an action described in the Act under section 264. That is why I am atraid to answer any questions." H1s Honour said: "But why does that make you atraid to answer a question?" Mrs Petruk replied: "Yes. Why does that make me afraid? [I received yesterday a transcript of proceedings at Melbourne on Wednesday 1 May 1985, 10.20 am and it says here, for example, on page 35, where I[ tried to state to his Honour, his Honour the Honourable Justice - Justice Northrop, that [ was twice - that [I was iliegally arrested. Now, in the transcript 1t says, in Italy. I was never arrested all. And then on back trom America America. Not on un Italy, I was hardly in Italy at the last page it says, when I came on 15 January. Now, I was never in the 15th of January. I was in Melbourne, Victoria. And then 1t says again - you know, even the transcripts are - you know - - -" His Honour replied: "Well, 1% may be that - - -" Mrs Petruk replied: "And there 1t says where I put to his Honourable Justice that I was gaoled under Bates. Iwas fingerprinted under Bates." His Honour said: "Where are you reading from?" Mes Petruk replied: "And then I explained that orf the summons 1f said Bates, B-A-T-E-S. That was page 21, and I said | never used the name Bates. And it says here Banks. Now, the whole - the whole - whatever I said does not make any sense at all, sir, your Honour, because the main words which are sO lmportant to this matters read Banks, B for - B-A-N-K-S, 1unstead of Bates, B-A-T-E-S." The transcript then went on with more reterences to that tuntil his Honour said: "Yes. Well, Mrs Petruk, 1t seems - I cannot detect in anything that you have said to me, any reason why you should not answer a question about windsurfers. Now, [I must direct you to answer that question as to how many windsurrers your husband owns." Mes Petruk replied: "Your Honour, as I said betore, I am atraid to answer any questions." His Honour replied: "Yes, very well. You can leave the witness-box and go back to your seat in the Court." Later there was a very long discussion between his Honour and the witness as to why she would not answer the question and other questions, his Honour said at page 64: "Mrs Petruk, I understand what you say about that, but there 18 a ditfaculty; that it you and your husband will not answer any questions about your business it makes 1t very difficult ror the Courts to come to proper conclusions about whether your husband 18 bankrupt or not and what property he owns and what property he does not own." Mrs Petruk replied: "Yes. I understand your Honour, but I have tried to explain ~ maybe I expressed myself wrong. I will try to think in German." His Honour said: "I think you are doing very well; I am following you very clearly. What you are talking to me about are all sorts of things that have happened in the past and in the background. They do not really help me very much to understand why you will not answer a question about windsurfers. " Mrs Petruk replied: "Well, see, this question would lead - 1t isa very simple question, sir - would lead to further questions." His Honour replied "yes". Mrs Petruk replied: "And to answer all Fhose further questions wtthout Legal representative, 31ir, f would be in this case extremely prejudiced and disadvantaged. Ido not mind being questioned, sir; not at all." His Honour replied "1s that right?" Mes Petruk said: "If they - if there 1s not a - you know, 1f everything 13 In order, if the summons reads Elizabeth Petruk, living at whatever address I live there, was all properly served; ih 1s concerning me personally, right, not somebody else. Not getting finger printed and maybe deported to some other country, sir. I am frightened. I honestly am." The matter continued with further discussion along similar lines. In the closing stages of the hearing on 7 May there was a discussion between Mr Braun of counsel for the Official Receiver and his Honour as to the appropriate order to be made in the case, his Honour being satistied that some order ought to be made and his Honour reserved his decision on the matter until the following Friday when he made an order in the following terms: 1, That the application be refused. 2, The applicant have leave to renew the application pursuant to rules 162 to lu4 of the Bankruptcy Fules for committal for contempt. 3. Aiternatively to paragraph 2, the applicant have leave to institute proceedings pursuant to the bankruptcy otfences rules for a breach under section 264(C)(1)¢(b) lu. of the Act. 4. Any proceedings brought in accordance with Urder 2 or Qeder 3 above are to be made returnable on a date tor hearing to be notified by the Registrar and the initiating documents served not loss than 28 days before the date for the hearing and the costs of the application be reserved. 5. That the further hearing or the examination pursuant to section 81 of this Act be adjourned until further Order. The proceedings before me are brought pursuant to section 31 of the Federal Court of Australia Act 1976 and may aiso be regarded as pursuant to the leave granted by the learned Judge. It is necessary to say something about the allegation by Mrs Petruk made this morning that the proceedings before me have already broken down on the grounds that there has been a fal1lure in what she called, I think the continuity of the proceedings. In this she relied upon an allegation that on 3 February 1986, the matter then being before Mr Justice Jenkinson and he being the Judge whom she had expected to be in court on the arternoon of that date, did not appear but arrangements had been made for Mr Justice Keely to deal with the matter. According to Mrs Petruk, Mr Justice Jenkinson had given her the option of choosing, contrary to his Honour s feelings that the Matter should not be dealt with by him, but should be dealt with by another judge, that it should be heard by him. According to her she had elected that the matter should be dealt with by his Li. Honour. As far as [I gathered, trom the stibmission by her, 1f was because Mr Justice Jenkinson had ina sense agreed to hear the matter 1f she wanted him todoso, and she having expressed a desire that she did want him to do sa, that the proceedings broke down when they were taken over by another judge, notwithstanding, that all Mr Justice Keely did, was to adjourn the matter into a call-over data when a date for a hearing could be fixed. It appears that in fact what occurred betore Mr Justice Jenkinson was quite ditferent. It appears on 20 December 1985, when the matter was before Mr Justice Jenkinson and Mrs Petruk and her husband were both present, there was a proceeding against Mr Petruk as well as against her, and that his Honour dealt with the proceeding against Mr Petruk. He had given judgment in it which f know now not to be adverse to Mr Petruk. His Honour said: "Mrs Petruk, we have part heard the case brought by the Official Trustee against you alleging contempt on the 7th of May. It seems to me undesirable on reflection that {£ should hear that case, and unless you insist [ continue to hear the case I propose to terminate the hearing and make orders to bring it before another judge. Although, as we have already said, it will in any event be not until next February. Do you follow that?" Mrs Petruk replied: "Yes, your Honour". s His Honour replied: "Do you object to my taking that course?" Mrs Petruk replied: No, your Honour. If I could just say a couple ot words?" His Honour replied: "Yes". Mrs Petruk said: "T would like to ask if the Honourable Court would consider the proceedings for my contempt to hold the proceedings of 397 of 1985 until my contempt ot court proceedings are completed." There was then a long discussion between his Honour and Mrs Petruk, Mes Petruk sought an order that applications which had already been made, or were in contemplation of being made by the Official Trustee in the bankruptcy of her husband, and 1n respect of which certain claims by her would be involved should not be dealt with until the contempt proceedings of court against her were completed and in the end his Honour did indicate that he would so order. It 1s beyond doubt that Mrs Petruk understood exactly what his Honour was doing. H1s Honour, having decided, as one could well understand he might, that having heard the one case 1t was desirable perhaps that another judge who was unacquainted with the matters alleged against the husband should hear the case against Mrs Petruk. So that order was duly made. For the purposes of convenience of counsel with a view to rinding a date, a hearing at 4.15 pm on 3 February 1986 was tixed. As indicated above, it duly came on that day with the results that have been mentioned, and the case duly appeared in the call-over list and was set down for hearing before me on this day. Mrs Petruk was rully aware ot all that and has attended today berore me to put her application. No specitic ground affecting me personally seemed to be formulated by Mrs Petruk, and there was nothing in her submissions about the continuity of this case, When those matters reterred to were considered and seemed to be as stated above 1t became my duty to go ahead with this case. When one takes up the merits one is faced with the fact that this lady, 1s obviously quite intelligent, apparently very strong physically, has a good command of the English language, has plenty of courage to put her case, and has a good understanding, f think, of what 1t 1s all about. [It appears without any ambiguity that she decided that she would not answer the question about how many winsurfers her husband had on the ground that she was afraid so to answer. The learned Judge felt that there was very little to fear on her part to the answering of that question, and the same appears to me to be the situation. Indeed, on reading the transcript i1t appears not to be so much that question which Mrs Petruk feared as some question which might possibly follow it. But, of course, it remains quite clear that the question which had been put to her was the one that she refused to answer. It 1s clear that she was directed by the learned Judge to answer 1t after a most patient hearing by him of all the reasons for and against that she could put for the answering of that question. No doubt hoping that Mrs Petruk would think better of 14. the matter his Honour made the order that he did which gave her time fo consider her posifion. she has had almost 11 months to consider her position and she has retrained from giving any intimation to this Court that she 1s willing to answer the question. Her strategy or tactics have been to attack the very foundation upon which this Court can proceed under section 81 of the Bankruptcy Act 1966 in accordance with the provisions of the law relating to the elucidation of attfairs relating to bankrupt estates. If her attitude 1s tolerated that elucidation will in all probability be totally frustrated. I cannot think that she 13 not aware of this. She has had 11 months to consider whether she should answer a question about whether her husband had any windsurters, and 1t is abvious that if she can possibly avoid it she does not propose to answer that question. As far as one can judge by reading the transcript before his Honour Mr Justice Woodward for reasons which are not really rational, because of this alleged fear, she does not intend to answer any questions concerning the condition of property relationships between herseif and her husband. The proot of these matters has been made by a direct affidavit by a person who was 1n court before the whole of the proceedings before Mr Justice Woodward, namely, by Mr Turner, the realization officer ot the Official Trustee. It 15 there set out that Mrs Petruk was sworn and that all the statements attributed to the various people in the transcript were duly made as they are therein set out. 15. The problem, thererore, before me 1s what sort or punishment should be imposed. Having regard to the attitude ot the applicant before me this morning, and taking that into account with all that I have heen able to read in the transcript before me, I cannot doubt that the strategy of the respondent 15 fo obstruct the proceedings of the Codurt so that they will never be carried to completion. If that occurs the object or the legislation will be frustrated in this case. It seems to me I should take into account first of ail the misconduct involved in failing to obey a direction of a learned Judge to answer the question which was put to her and, secondly, the implication thereof and of her attitude generally to the admininstration of the law. It seems that arising out of various proceedings whe has already sutfered some few days incarceration. She suffered some short incarceration over Christmas in 1984. I did not have an opportunity or, I suppose, I had an opportunity but the way the matter went before me, no information was given to her or perhaps I should say no renewed intimation was made to her that she stood 1n peril of incarceration unless she was prepared to answer the question. But I do not doubt that she 183 well aware of the risk that she 1s running, but she 1s a woman of courage and 1s prepared to take 1t. To my mind, the more important of the two aspects, that 1s to say the aspect of punishing a lady for not answering a question on 7 May and the vindication of the law in relation to the necessity to ensure that the proceedings of the Court are not frustrated by recalcitrant persons, such a one as she undoubtedly is. That is Io. much the more important aspect ot the matter which 1s before me, and [ cannot help but think that provided she 1S given an opportunity to reconsider her position and retrace her steps and announce her willingness to answer the question and any other relevant questions, that some substantial punishment with a view to the enforcement of the law is not only justified but called for. I am aware that for similar ""otfence" Mr Petruk was ordered to be imprisoned for 28 days. There was a stay to give him a chance to reconsider his situation, but he took no advantage of 1t and I am informed he had never yet been arrested or required to fulfil the term of imprisonment which was awarded against him. It seems, no doubt, unfair and certainly not in accordance with current notions of equality of opportunity and equality of the sexes generally that she should receive a punishment greater than his. In the circumstances, however, 1t seems to me that unless resolute action 1s taken by the court to ensure that procedures of the law shall not be frustrated unlawtully, in this case and perhaps other cases - certainly in this case - that it is desirable that the sentence should be material and substantial if this lady remains of the same mind as she is of today. [ also think that it should be made perfectly plain to her that she does not have to serve any part of this sentence it she will agree to obey the law. To give her every opportunity, therefore, ot staying out of 17. prison or otf being discharged trom prison if she permits herself to be incarcerated, I propose two things. Firstly, the order I am about to make shall be subject to a stay ot 14 days and, secondly, that there be delivered to her at or about the time of her arrest a notice to the rollowing etfect: L. That 1t is within the competence of the Court to order her discharge from prison at any time before the expiry of the term ot imprisonment imposed upon her by this Court on this day, 2 April 1986. 2. That upon application by her for a discharge from prison it would be an important factor in her favour that she should undertake to answer the question which she refused to answer on 7 May 1985 and any other questions which may be properly put to her upon her examination under section 81 of the Bankruptcy Act 1966. 3. That an application for discharge from prison may be made by application served upon the applicant herein. It will be an order of the Court that at or about the time of the arrest she be served with this order. I now make that order. Further that the order for imprisonment 1s made pursuant to the powers of the Federal Court of Australia in its general division in the Bankruptcy District for the State of Victoria exercising bankruptcy jurisdiction but with all the powers the Federal Court of Australia has by virtue of the Federal Court of Australia Act. 18. Pursuant to those powers, I order subject to the stay order, that this lady be imprisoned tor the term ot six months. I order the respondent to pay the costs otf the proceedings. I grant liberty to apply to everybody. 1 certify that this and the |77 preceding pages are a true copy of the Reagons for Judgment kezein cf the Honourable Mr. Justice Guitars [Sure te— Associate Dated: 2 Apel \AYo.