R v Witt (No 2)

[2016] VSC 142

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

S CI 2014 4690

THE QUEEN	Plaintiff
v
MICHAEL GEOFFREY WITT	Defendant

---

JUDGE:	J FORREST J
WHERE HELD:	Melbourne
DATES OF HEARING:	29 February, 1 March 2016
DATE OF JUDGMENT:	11 April 2016
CASE MAY BE CITED AS:	R v Witt (No 2)
MEDIUM NEUTRAL CITATION:	[2016] VSC 142 First revision (13 April 2016)

---

CONTEMPT OF COURT – Civil contempt – Solicitor interfering with the due administration of justice – Duty of a legal practitioner – Relevant principles – Penalty – Reparation – Supreme Court (General Civil Procedure) Rules 2015 O 66, O 75.

---

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr S J Howells	Tolhurst Druce and Emmerson
For the Defendant	Mr R Meldrum QC with Mr J W Kewley	Holman Webb Lawyers

HIS HONOUR:

Introduction

1. Michael Witt is a barrister and solicitor of this Court.  When he took the oath of office, he swore to conduct himself well, honestly and to the best of his knowledge and ability.  Unfortunately, Mr Witt has failed that oath and has not fulfilled his obligations to the Court.

1. On 18 July 2009, Mr Witt sent an email to his client Jan Talacko shortly after orders were made by a judge of this Court injuncting Jan’s two sons, David and Paul, from dealing with properties in the Czech Republic.  The contents of the email were in contempt of this Court.  In his attempts to ensure that David and Paul did not become aware of the injunction (and avoided process servers), Mr Witt committed a serious offence which requires a commensurate penalty.  The Court must also make it clear to the legal profession that such unethical conduct under the cloak of professional privilege will not be tolerated.

1. The conduct of Jan Talacko and his immediate family has occupied thousands of pages of transcript of hearings and reasons for judgment in many decisions of this Court.  Jan, David and Paul Talacko have behaved fraudulently and, in many instances, in defiance of court orders.  I do not propose to traverse that history any more than is necessary for the purpose of this ruling and I adopt the background provided in my reasons in R v Witt,[1] which dealt with a separate charge of contempt (which I dismissed) arising out of the same email.

   [1][2016] VSC 19.

1. Jan Talacko had two siblings: Helena and Peter.  All are now dead.

1. The applicants (Alexandra Bennett, Martin Talacko and Rowena Talacko, as well as Alexandra Bennett and David Adams in their capacity as executors of the estate of Margaret Talacko)[2] are relatives and descendants of Helena and Peter who have been defrauded by the behaviour of Jan, David and Paul Talacko.  

   [2]Most, but not all, of those named were the plaintiffs in other proceedings in this Court including the primary cases against Jan, David and Paul.  The changes have occurred as a result of the death of some members of the families of Helena and Paul.  I have used the expression ‘plaintiffs’ and ‘applicants’ interchangeably depending on the context.  Whatever the title, all are members of the Talacko family who have litigated cases against Jan and his family.

1. That the contents of part of the email constituted a contempt of court is admitted by Mr Witt.  The two issues for determination are:

(a)        what penalty should be imposed upon Mr Witt; and

(b)        what amount, if any, should the applicants recover for losses said to arise from the contempt.

1. It was not asserted by the applicants that Mr Witt’s conduct should be treated as a criminal contempt; the charge is to be determined on the basis that it constitutes a civil contempt of Court. 

The Charge

1. Originally the applicants brought five separate charges of contempt against Mr Witt. One was dismissed, and several were withdrawn.  Charge four remains, and reads as follows:

That Michael Witt an officer of the Court be dealt with for Contempt of Court namely that on 18 July 2009 being an officer of the Court he did communicate with his client Jan Emil Talacko and his wife Judith Talacko and their children Peter Talacko and Nicole Talacko and sought to prevent the Second and Third Defendants from being apprised of the Orders made on 17 July 2009 in proceeding 7819 of 2009 and thereby to frustrate the intended effect of those Orders.

1. The particulars of the charge set out the contents of the second paragraph of the email sent by Mr Witt to his client and members of the Talacko family in the early hours of 18 July 2009:

The email dated 18 July 2009 contained the words “I have deliberately left Paul and David off this email as I do not want it to be able to be said that they had any notice or knowledge of the orders made against them because for so long as they do not have notice of this then they cannot be in contempt if they do not comply.  I therefore strongly advise that no one tells Paul or David anything about this new case other than to warn them to look out for process servers in Prague.”

Background facts – Victoria

1. Notwithstanding the promise I made in [3], it is necessary to focus in considerable detail on events leading up to and after 18 July 2009 which underpin the decision I have reached.

1. The following background supplements my summary in the earlier judgment[3] and is taken from a number of judgments of this Court, and in particular two of Kyrou J delivered in 2009[4] and McDonald J in 2015.[5]

   [3][2016] VSC 19.

   [4][2009] VSC 349; [2009] VSC 533.

   [5][2009] VSC 349; [2009] VSC 533; [2015] VSC 287.

1. In 1991-1992, Jan Talacko became the sole and, in some cases, part owner of a number of properties located in the Czech Republic, Slovakia and Germany.  This was a result of restitution laws passed in those countries in the early 1990s.  The properties which were the subject of restitution are set out in a table attached to [77] of the judgment of Kyrou J in November 2009.[6]

   [6][2009] VSC 533 [77] - [87].

1. On 2 October 1998, proceedings were issued against Jan Talacko by the plaintiffs (1998 proceeding).  Jan was represented by Findlay Arthur Phillips.  At that time, Mr David Findlay had the conduct of the case on Jan’s behalf.

1. On 16 October 1998, the transfer of Jan Talacko’s interest in the family home in Glenferrie Road, Malvern, to his wife Judith, was registered. [7]   

   [7]In 2015, McDonald J held that this transfer (dated 23 September 1988) was void as it was motivated by an intent to defraud creditors.  See Talacko (as executor of Talacko) v Talacko [2015] VSC 287 [232] - [243] (the 2015 trial).

1. The trial of the 1998 proceeding came before Ashley J in February 2001.  It was settled on 23 February 2001 with Jan Talacko agreeing to transfer his rights, title and interest in properties in Dresden, Germany and the Czech Republic to the plaintiffs.  In addition, Jan Talacko agreed to pay to the solicitor for the plaintiffs the sum of $150,000 in part payment of the plaintiffs’ costs.[8]

   [8]Talacko v Talacko [2015] VSC 287 [14].

1. For the ensuing two years, the plaintiffs and Jan Talacko negotiated as to the form in which the transfers would be effected.[9]  It is clear that Jan Talacko and the members of his family never intended to comply with the terms of the settlement.[10] 

   [9]Talacko v Talacko [2008] VSC 128 [80]-[98].

   [10]See the chain of email correspondence set out in the judgment of McDonald J: Talacko v Talacko [2015] VSC 287.

1. For instance, in March 2000 (prior to the trial before Ashley J), Judith Talacko sent an email to Jan, David and Peter Talacko in the following terms:

Dearest Tato [Jan] and Angels,

Just spoken to David F [David Findlay] re. taking a mortgage again.  He is really adamant about doing it ASAP so that you can easily be declared bankrupt and should we lose then there is no worry about them getting anything.  David said it can’t be traced as gratuity because the house is in my name now anyway and I am fee (sic) to do with the money what I like.  So I can take a mortgage to pay off debts elsewhere.  He says they can touch nothing if it is that way.  He wants to have a chat with Pete and me about this during the week.  I shall try to get Pete to give us a moment even if it might be at midnight but David said that is fine… His feelings about the mortgage are that if it goes foul and the chips fall the wrong way then we don’t have to care at all.  I guess he has a point.[11]

[11]Talacko v Talacko [2015] VSC 287 [93]. The italicised names are added.

1. Another example is the email sent by Paul Talacko to Jan in October 2003:

As far as I can make it out clause 3 of the draft transfer contract says Tato transfer all the German property inherited from Alois Talacko including the property in Kiefernstrasse.  The fact there might be no other German property is neither here nor there, some might turn up in the future and be discovered in some, as yet unknown document.  If my interpretation is right it means that it is yet another attempt as extending the terms of settlement which mentioned only Kiefernstrasse 19 and 19a. 

Under clause 3 of the settlement, Vermin are out of time.

Also, I’ve been thinking, it’s arguable but that because of the stupid letter that Head Vermin sent, they might have repudiated the settlement.[12]

[12]Ibid [223].

1. In the 2015 trial, McDonald J, after reviewing the email correspondence between Jan, David, Paul and, at times, Judith, concluded that:

The contents of these emails demonstrate unequivocally that at no point did any of the first to fourth defendants resile from their common purpose of preventing the plaintiffs from accessing any of [Jan’s] property.[13]

[13]Ibid [116].

1. Mr Witt joined Findlay Arthur Phillips as an articled clerk in 1995.  He was admitted to practice on 4 March 1996.  In 2000 he became a partner.  He commenced to act for Jan Talacko in the 1998 proceeding in 2005 when it was reinstituted and the claim amended to allege breaches of the terms of settlement by Jan Talacko.[14]

   [14]Ibid [16].

1. The trial of the revived and amended 1998 proceeding commenced on 19 November 2007 before Osborn J.

1. On 24 April 2008, his Honour found for the plaintiffs and held that Jan Talacko had breached the terms of settlement.  Subject to the resolution of a couple of outstanding defences, Jan Talacko was held liable to pay equitable compensation to the plaintiffs.

1. In the course of the judgment, his Honour said:[15]

   [15]Talacko v Talacko [2008] VSC 128 [134] – [136] (references omitted).

The reasons offered for the defendant’s failure to execute the documentation were variously described in evidence by the defendant, but I am satisfied that the fundamental reason was simply that he did not accept the plaintiffs were entitled, as a matter of fairness, to a transfer of the properties the subject of the terms. In turn, he wished to evade compliance with his obligation to execute the transfer documentation. Thus, he variously stated concerning his obligations with respect to the terms:

·It was his job to recover the property and he had to correct the evils of the past;

·You don’t offer a bunch of flowers to someone who attacks you;

·He did all the work;

·He spent a lot of money by way of incidental costs in pursuing recovery of the land;

·Helena did nothing by way of comparable effort;

·Peter visited the country but couldn’t bear it and didn’t want to come back;

·“I know I spent a lot of time a lot of ... a lot of expenses and I could not see that somebody could come along and get the benefit of all my work without moving a finger and I think on reflection if that was the case I would do the same thing again because that’s how I felt at the time.”

These views are to be understood against a background of serious antipathy to the plaintiffs arising in a context of perceived family grievance exemplified by the following statement about the list of properties prepared by the defendant in 1990:

This document I prepared in 1990 after I visited Czechoslovakia, 1991 and 1990 as well. After I visited to the Czechoslovakia for the first time. This document was given to my - I gave it to my brother. He informed me that he gave a copy of it to my sister, and I was very upset because I had not been talking to my sister for years after she threw my mother out of her house. I tried desperately and the - when the Czech and communism was over in Czechoslovakia I tried to rectify my relation- my relation with my sister, and I asked her to come along to my youngest son 21st birthday. The whole thing was an utter disaster. She left. Slapped my daughter and she said she'll never visit my place again. From then on I knew I could no longer have any relations with her.

It follows that I am satisfied:

(a)that the defendant was obliged to execute and deliver up the Dresden transfer documentation provided to him;

(b)that the failure to do so was actuated by extraneous considerations, inconsistent with the plaintiffs’ obligations under the terms and forms part of a larger body of evidence supporting the view that after receipt of the Dresden transfer documentation the defendant refused to proceed with the terms.

1. On 9 September 2008, in attempting to resist a Mareva injunction, Jan Talacko swore an affidavit deposing that he had no intention of disposing of his interests in the Czech properties.

1. So, as things stood at the commencement of 2009, the final step in the 1998 proceeding was to determine the amount of equitable compensation payable by Jan Talacko, and to resolve the remaining defences.[16]  It was clear, at that time, that the claim for equitable compensation would be substantial, with estimates measured in millions of euros.[17]  This part of the proceeding was managed by Kyrou J, with a trial date fixed for October 2009.

   [16]See Talacko v Talacko [2009] VSC 349 [7], [8], [49]-[50], [213]-[217].

   [17]Ibid [50].

1. On 12 May 2009, Jan, David and Paul Talacko executed in Prague:

(a)        a donation agreement in respect of interests in some of the properties in Repy;

(b)        a donation agreement in respect of interests in some of the properties in Kbely  and Prague 1;

(c)        a donation agreement in respect of interests in the properties in Holesovice; and

(d)       applications for change of ownership under the donation agreements from Jan to David and Paul in respect of the interests in the properties referred to in (a), (b) and (c).[18]

[18]Ibid [55].

1. Last year, in the 2015 trial, McDonald J held that the donation agreements constituted an equitable fraud, to which Jan, David, Paul and Judith Talacko were parties.[19]

   [19]Talacko v Talacko [2015] VSC 287 [2], [157]-[159].

1. As Elliott J put it, when determining whether legal professional privilege was lost over certain privileged documents (including the email):

…there is no dispute that [Jan Talacko], prior to 12 May 2009, having repeatedly given assurances on solemn occasions that he would not dispose of or deal with the Properties, voluntarily entered into the Transfer Arrangements without notice to the plaintiffs. The Transfer Arrangements involved no valuable consideration.[20]

[20]Talacko v Talacko [2014] VSC 328 [70].

1. On 10 June 2009, the plaintiffs learned of the donation agreements and applications for registration when their Prague based attorney, Mr Hlavička, made inquiries at the Real Estate (Cadastral) Registry in Prague (the Real Estate Registry).[21]  According to Mr Hlavička, as at that date, the applications for registration had been registered in relation to some of the Repy and Kbely properties and were pending in relation to some of the other properties, and the applications for registration in relation to the Prague and Holesovice properties had been lodged and were pending.

   [21]Talacko v Talacko [2009] VSC 349 [50].

1. Mr Hlavicka also said that the Real Estate Registry was obliged by law to register an application for registration unless it is withdrawn by all the parties to the application.[22]

   [22]Ibid [57] referring to Hlavicka’s affidavit sworn 18 June 2009.

1. At a directions hearing on 11 June 2009 in the 1998 proceeding, counsel for the plaintiffs informed Kyrou J of the existence of the donation agreements and applications for registration.  They foreshadowed the joinder of David and Paul Talacko as defendants.[23]  His Honour made Mareva-type orders against Jan Talacko, as follows:

1.Until 4.15pm on 23 June 2009 or further order, the Defendant be restrained from taking any further steps by himself or by his employees, agents or attorneys from selling, transferring, donating or otherwise dealing with any of the properties listed in an attachment to the Order.

2.Until 4.15pm on 23 June 2009 or further order, the Defendant immediately take all such steps as he is able to take to withdraw any application(s) for transfers and any documents relating to applications or transactions that he, or his employees, agents or attorneys have lodged with the Real Estate Registry of the Capital City of Prague in the Czech Republic, or any other like Registry, in respect of any of the properties listed in Attachment A to this Order.

[23]Ibid [58].

1. His Honour also ordered (by order 2) that Jan Talacko contact David and Paul Talacko requesting that they withdraw the applications for transfer of the properties identified in the donation agreements.

1. On 17 June 2009, Mr Witt sent an email to Jan and Judy Talacko which read as follows:

Dear Jan and Judy,

Further to our phone call this morning, attached are some extracts from the Czech Civil Code which, although they do not go as far as you thought, do support what you are saying.  I have provided a copy of these to Russell [Berglund QC] and Daryl [Williams junior counsel] and asked them to consider whether they feel that Jan should sign an affidavit stating that he was gifting the properties to the boys in order to avoid Czech inheritance law.[24]

[24]Talacko v Talacko [2015] VSC 287 [85]. I should add that there is no evidence that the counsel named provided any such advice.

1. I pause here to note the observation of McDonald J in the 2015 trial:

This email is direct evidence that the first and fourth defendants proposed to Mr Witt that an affidavit be prepared giving a false explanation for the Donation Agreement, deposing that the first defendant was gifting the properties to the second and third defendants in order to avoid Czech inheritance laws. This is not a case of the fourth defendant merely acquiescing in a course of action undertaken by the first defendant. Rather, the email supports a finding that both the first and fourth defendants had jointly proposed a false explanation for the Donation Agreement. Whilst the email post-dates the Donation Agreement by approximately one month, it is contemporaneous with that transaction. Further, the email pre-dates the transfer which was completed in late July 2009.[25]

[25]Ibid [87]

1. On 23 June 2009, Kyrou J made further orders against Jan Talacko:

…

2.Until 4.15pm on 16 July 2009 or further order, the Defendant be restrained from taking any further steps by himself or by his employees, agents or attorneys from selling, transferring, donating or otherwise dealing with any of the properties listed in an attachment to the Order.

3.Until 4.15pm on 16 July 2009 or further order, the Defendant immediately take all such steps as he is able to take to withdraw any application(s) for transfers and any documents relating to applications or transactions that he, or his employees, agents or attorneys have lodged with the Real Estate Registry of the Capital City of Prague in the Czech Republic, or any other like Registry, in respect of any of the properties listed in an attachment to the Order.

...

6.By 4.00pm on 30 June 2009, the Defendant file and serve an affidavit setting out the precise steps taken by him to comply with paragraph 2 of the Order of Justice Kyrou made on 11 June 2009 and paragraph 3 of this Order.

...

9.Unless the Defendant pays to the Plaintiffs the amount of $74,919.16 set out in the Order of Associate Justice Wood made on 1 June 2009 by 4.30pm on 7 July 2009, his defence be struck out at that time...[26]

[26]Ibid [60].

1. On 26 June 2009, the plaintiffs’ then solicitors, Holding Redlich, sent separate letters by email and/or post to David, Paul, Nicole and Peter Talacko, which stated, inter alia:

We are ... writing to you to inform you that, unless you are prepared to risk being joined to [the 1998] proceeding:

1.You should not accept any transfer of [Jan Talacko’s] interest in the Properties or any of his other assets; and

2.You should immediately reverse any transfer to you of [Jan Talacko’s] interest in the Properties.

Should you accept any such transfer and/or fail to reverse any such transfer from your father, our clients will pursue orders against you personally for any of the assets referred to in paragraph 2 you receive from your father, as well as interest and costs. Rest assured that although no orders have been made by a Czech court in respect of this matter, you should not take comfort in this. Our clients will take whatever steps necessary to enforce any order of the Supreme Court of Victoria against you in Australia, the United Kingdom, the Czech Republic, or elsewhere (if necessary) so that your father’s attempts to prevent our clients’ recovering their rightful entitlements from any judgment of the Supreme Court of Victoria are not successful.[27]

[27]Ibid [62].

1. On the same day, Jan Talacko swore an affidavit, part of which read:

I have been advised that it is not within my power to unilaterally withdraw any applications for the transfer of the relevant properties and that in order for this to happen it requires the agreement of all other parties to those transfers. As such, I have sought to obtain the agreement of both David Talacko and Paul Talacko to effect such a withdrawal. In particular, following my being advised by my solicitors of the Order made by His Honour on 11 June 2009 I took the following steps to comply with order 2 of that Order:

(a)On 12 June 2009 I telephoned both Paul Talacko and David Talacko. During those conversations I advised them of the contents of the order and asked them to agree to withdraw the applications referred to in that Order. I also told them that I would confirm the request in writing and email it to them;

(b)On 13 June 2009 I emailed a letter to both Paul Talacko and David Talacko advising them of the contents of the order and asked them to withdraw the applications referred to in that Order. Now produced and shown to me and marked “JET 1” is a true copy of the letters emailed to them;

(c)On 19 June 2009 I wrote to the Land Registry in Prague requesting that all applications for registration of the applications for the transfer of the relevant properties to Paul Talacko and David Talacko be withdrawn. Now produced and shown to me and marked “JET 2” is a true copy of this letter.

Based on the advice received by me I do not believe that there is anything further that I can do in order to withdraw the applications. However, pursuant to order 3 of Justice Kyrou made 23 June 2009 I have this day again emailed letters to my sons requesting that they withdraw the said applications. Now produced and shown to me and marked “JET 3” is a true copy of these letters.[28]

[28]Ibid [63].

1. The emails to David and Paul Talacko dated 12 June 2009 (which were identical) referred to in the affidavit read as follows:

I have been ordered by a court in Australia to try to reverse the transfers.  Please see if you can do anything to help me in this respect.[29]

[29]Ibid [64].

1. Jan Talacko’s letter to the Real Estate Registry of 19 June 2009 stated:

Pursuant to that order I hereby request that all of these applications be immediately withdrawn provided that this is not contrary to Czech procedures, laws and practices.[30]

[30]Ibid [65].

1. The emails from Jan to David and Paul Talacko of 26 June 2009 (which were identical) read as follows:

I have again been ordered by the Supreme Court of Victoria to “take all such steps as I am able to take to withdraw any application(s) for transfers and any documents relating to the applications or transactions that he, or his employees, agents or attorneys have lodged with the Real Estate Registry of the Capital City of Prague in the Czech Republic, or any other like Registry, in respect of any of the properties listed in Attachment A to this Order”.

I therefore request that you return to me all documents you are holding in relation to these properties and that you take all steps that you can to withdraw them from the Land Registry provided it is allowable, legally permitted or not against the Czech procedures and laws.

I have already written to the Land Registry asking that the documents be withdrawn so they should need nothing more in order to complete this other than your request. I have been advised that if I do not comply with this order then I will be in contempt of Court in Victoria.[31]

[31]Ibid [66].

1. Jan Talacko did not pay the amount of $74,919.16 for costs owing to the plaintiffs for costs by 7 July 2009, and his defence in the 1998 proceeding was struck out.[32]

   [32]It was reinstated on 10 August 2009 by Kyrou J.  Jan Talacko paid the money.

1. On or about 7 July 2009, Jan Talacko terminated Mr Witt’s instructions in relation to the 1998 proceeding.  Mr Witt applied for leave to file a notice of cessation to act.  Kyrou J noted:

The proposed notice set out Jan Talacko’s Prague address as his last known address even though he had been living in the Malvern property continuously since at least 5 June 2009, when he swore his affidavit of preliminary discovery.[33]

[33]Talacko v Talacko [2009] VSC 349 [67].

1. On about 9 July 2009, the plaintiffs learnt that Jan Talacko’s Czech based attorney, Dr Daniela Burešová, had written to the Real Estate Registry on 17 June 2009 and provided information for the purpose of progressing the registration of the transfer of the properties.[34]

   [34]Ibid [68].

1. Pausing here, this was in direct contradiction to Jan’s sworn evidence that he had taken steps to halt the transfer, and is totally inconsistent with the alleged instructions to his sons and the Real Estate Registry.

1. On the morning of 13 July 2009, the Associate to Kyrou J sent an email to counsel for the plaintiffs, which was copied to Mr Witt and Holding Redlich, and stated:

I refer to our recent telephone discussion in which you inquired whether Justice Kyrou would be available later today to hear an ex parte application for committal in relation to contempt and relief pending committal and the issue of a warrant.

His Honour is of the view that any application should be made in the Practice Court with notice to the defendant’s solicitors who still remain on the record. Justice Byrne is in the Practice Court this week.[35]

[35]Ibid [69].

1. Upon receipt, Mr Witt telephoned Judith Talacko and informed her of its contents.[36]

   [36]Ibid [70].

1. In the early afternoon, a private investigator acting for the plaintiffs observed Jan Talacko leaving the Malvern property in a taxi carrying a medium sized suitcase.  The taxi arrived at the Tullamarine Airport where he was observed talking to staff at the Qantas international departures inquiries desk.  He presented what appeared to be travel documentation.  He then left the airport by taxi.[37]

   [37]Ibid [71].

1. Shortly afterwards, the plaintiffs filed a summons seeking an order that Jan Talacko be dealt with for contempt on the grounds that he had breached the orders of 11 and 23 June 2009.  In addition, the plaintiffs obtained an arrest warrant from Bongiorno J.[38]  Following discussions between the plaintiffs’ lawyers and Mr Witt, Jan Talacko agreed to attend Court before Bongiorno J that evening (13 July 2009).  At that hearing, his counsel informed the judge that he was instructed that Jan Talacko had gone to the airport to meet friends who did not arrive, and that he had his Australian passport with him but his Czech passport was in Prague.  Bongiorno J remanded Jan Talacko in custody to appear before Byrne J in the Practice Court the next day.[39]

   [38]Ibid [72].

   [39]Ibid [73].

1. Jan Talacko appeared before Byrne J the next morning (14 July 2009).  His counsel informed the Court that, contrary to the instructions he had received the previous day, Jan Talacko had in his possession both his Australian and Czech passports.  Further, counsel told the Court that he was instructed that Judith Talacko had telephoned Jan Talacko and informed him of the contents of Kyrou J’s Associate’s email on the 13^th  whilst he was at the airport.  Counsel also said that Dr Burešová had sent her letter of 17 June 2009 to the Real Estate Registry without Jan’s knowledge or instructions.[40]

   [40]Ibid [74].

1. Byrne J dismissed the summons as the order of 11 June 2009 did not contain an indorsement pursuant to r 66.10(3) of the then Rules of Court. However, the plaintiffs filed an identical summons and Jan Talacko appeared before his Honour in the afternoon of 14 July 2009.[41]

   [41]Ibid [75].

1. Byrne J then granted an injunction which, as varied on 15 July 2009, prevented Jan Talacko from leaving Victoria, attending any point of international departure or applying for any other passport until the conclusion of the hearing of the contempt summons or further order.  His Honour also ordered Jan Talacko to deliver his passports to Mr Witt upon the latter undertaking not to return them to Jan Talacko unless the Court so ordered or the plaintiffs consented.[42]

   [42]Ibid.

1. In an affidavit sworn on 15 June 2009, Jan Talacko swore that Dr Burešová’s letter of 17 June 2009 to the Real Estate Registry was sent without his instructions.  He also said that David and Paul Talacko came to Australia in late June 2009 to attend their sister’s wedding on 5 July 2009 and left around 14 July 2009.[43]

   [43]Ibid [76].

1. On 15 July 2009, Mr Witt advised the Court that Jan Talacko had reinstated his instructions to act for him in the 1998 proceeding.[44]

   [44]Ibid [77].

1. At a directions hearing on 16 July 2009 before Kyrou J, further discussions took place concerning the plaintiffs’ application to add David and Paul Talacko as defendants to the 1998 proceeding and to amend the statement of claim.  His Honour expressed concern about whether the 1998 proceeding would be ready to be heard by the scheduled date of 5 October 2009 if David and Paul Talacko were added as defendants.  His Honour also raised the possibility of pleading the new causes of action in a separate proceeding.[45]

   [45]Ibid [78].

1. At that hearing, Kyrou J made the following orders:

1.Until 4.15pm on 24 July 2009 or further order, the Defendant be restrained from taking any further steps by himself or by his employees, agents or attorneys for the purpose of or in furtherance of selling, transferring, donating or otherwise dealing with any of the properties listed in Attachment A to this Order (‘Properties’).

2.Until 4.15pm on 24 July 2009 or further order, the Defendant take all such steps as he is able to take to withdraw any application(s) for transfers and any documents relating to applications or transactions that he, or his employees, agents or attorneys have lodged with the Real Estate Registry of the Capital City of Prague in the Czech Republic, or any other like Registry, in respect of any of the Properties.

...

4.The Defendant sign a clean copy of the letter which is exhibit “JET-2” to his affidavit sworn on 26 June 2009 and deliver the original of the signed letter to Holding Redlich by noon on 17 July 2009.

5.The Defendant send a letter to the Cadastral Registrar in Prague both by post and by fax by 5.00pm on 17 July 2009 in which he:

(a)requests the Cadastral Registrar not to take any further steps to register the transfers to his sons, David Talacko and Paul Talacko, of the properties listed in the attachment to the letter; and

(b)advises that his attorney, Daniela Buresova is not authorised to take any further steps in furtherance of or for the purpose of the registration of the transfers to David Talacko and Paul Talacko of the properties listed in the attachment to the letter,

and that he:

(c)attach to the letter the document which is attachment A to this Order; and

(d)send by fax a copy of the letter to Holding Redlich by 5.00pm on 17 July 2009.

1. On 17 July 2009, the plaintiffs commenced proceeding no. SCI 2009 7819 (the 2009 proceeding) which named Jan, David and Paul as defendants.[46]  Kyrou J made the following orders (the 17 July orders):

Until 4.15pm on 24 July 2009 or further order, the Secondnamed Defendant, David Talacko and the Thirdnamed Defendant, Paul Anthony Talacko, be restrained from taking any further steps by themselves or by their employees, agents or attorneys for the purpose of or in furtherance of the registration of the transfers to them of the properties listed in attachment A to this Order.

Attachment A identified properties in Prague, Slovakia and Dresden. His Honour also gave leave to the plaintiffs to serve the 17 July orders and other documents outside Australia pursuant to r 7.06 of the then Rules of Court (subsequent references to service of the 17 July orders includes the orders themselves and the other accompanying documents).

[46]Ibid [82].

1. It was on the following morning (18 July 2009) that Mr Witt sent the email (reproduced in paragraph [9]) to Jan Talacko, his wife Judith, and their children, Peter and Nicole.

1. Attempts at service of the 17 July orders (and the initiating 2009 proceeding) on David and Paul in Prague commenced on 28 July and continued during that month and into early August.

1. In an affidavit sworn 23 July 2009, Mr Witt said that he had been advised by Jan, Judith, Nicole and Peter Talacko that:

David Talacko and Paul Talacko have advised that because they believe that the plaintiffs may now seek to join them as parties to Court proceedings in Australia they do not wish to take any step or do anything associated with this proceeding, including assisting with the production of documents, for fear that it may ultimately cause some prejudice to their defence of those proceedings...[47]

[47]Ibid [83].

1. On 24 July 2009, Kyrou J conducted directions hearings and made orders in both the 1998 and 2009 proceedings.  David and Paul Talacko had not been served and did not appear.[48]  In the 2009 proceeding, Kyrou J made orders, which included the following:

   [48]Ibid [85].

Mareva-type orders against the Secondnamed Defendant

…

3.Until 4.15pm on 10 August 2009 or further order, the Secondnamed Defendant, David Talacko, be restrained from taking any further steps by himself or by his employees, agents or attorneys for the purpose of or in furtherance of the registration of the transfers to him of the properties listed in Attachment A to this Order or any interest in those properties.

4.The Secondnamed Defendant, David Talacko, send a letter to the Cadastral Registrar in Prague both by post and by fax by 5.00pm on 31 July 2009 in which he:

(a)requests the Cadastral Registrar not to take any further steps to register the transfers to him of the properties listed in the attachment to the letter; and

(b)advises that no attorney, agent, employee or other person is authorised by him to take any further steps in furtherance of or for the purpose of the registration of the transfers to him of the properties listed in the attachment to the letter,

and that he:

(c)attach to the letter the document which is Attachment A to this Order; and

(d)send by fax a copy of the letter to the Plaintiffs’ lawyers, Holding Redlich, on fax number [phone] by 5.00pm on 31 July 2009.

5.Until 4.15pm on 10 August 2009 or further order, the Secondnamed Defendant, David Talacko, be restrained, whether by himself or by his employees, agents or attorneys, from selling, transferring, donating or otherwise dealing with any of the properties listed in Attachment A to this Order or any interest in those properties.

INDORSEMENT

TAKE NOTICE that you, DAVID TALACKO, the Secondnamed Defendant in this proceeding, are served with this Order and that you are liable to imprisonment or to sequestration of your property if you disobey this Order by doing an act which this Order requires you to abstain from doing or if you refuse or neglect to do any act within the time specified in the Order for the doing of the act.

1. Paragraphs 6, 7 and 8 of the orders were directed to Paul Talacko, and were identical to paragraphs 3, 4 and 5 directed to David Talacko. Paragraph 10 of the orders gave leave to the plaintiffs to serve the orders and certain other documents on David and Paul Talacko outside Australia pursuant to r 7.06 of the Rules.[49]

   [49]Ibid [87].

1. In an affidavit of 29 July 2009, Jan Talacko stated that David and Paul had indicated to him that they were:

not willing to co-operate in any way with the production of documents because they have been threatened with legal proceedings by the Plaintiffs ... and they do not wish to do anything that might compromise their position in that regard.[50]

[50]Ibid [88].

1. In an affidavit sworn 7 August 2009, Mr Hlavička set out details of his discussions with the registrar at the Real Estate Registry on 4 August 2009, as follows:

... I attempted to persuade the registrar to provide David and Paul with a longer period (30 days) for confirmation of the withdrawal, as we had information that they are abroad. The registrar confirmed that she was satisfied with the form of Jan Emil Talacko’s withdrawal included in his affidavit dated 26 June that we provided to her, and that she would proceed with writing requests to David Talacko and Paul Talacko asking them to either file the approval of the withdrawal of the registration proceeding or reject the approval. The registrar told me that the requests will be prepared by the end of this week (i.e. 7 August 2009). The registrar insisted that provision of the 10-day period to David Talacko and Paul Talacko was sufficient to allow them to file their answers, since they are both, in the proceeding before the Real Estate Register, represented by an attorney who has filed a power of attorney to the registrar recently. I also understand from the registrar that the attorney indicated to her that David Talacko and Paul Talacko would not be willing to withdraw the applications. The registrar confirmed to me that provided that either Paul Talacko or David Talacko does not agree to the withdrawal of the registration application, the registrar will have to proceed with the registration of ownership as it is prescribed by Czech law.[51]

[51]Ibid [91].

1. In that affidavit, Mr Hlavička also set out details of attempts to serve David and Paul Talacko in Prague with the writ, orders, summonses and affidavits.[52]

   [52]Ibid [90].

1. On 10 August 2009, Kyrou J made further Mareva-type orders against Jan, David and Paul Talacko in relation to the registration of the transfers.  His Honour also heard an application for substituted service of the 2009 proceeding and was satisfied that David and Paul Talacko were avoiding service.[53]  So, his Honour made orders for substituted service:

   [53]Ibid [90].

15. In lieu of personal service of any document on the Secondnamed Defendant, David Talacko, the Plaintiffs have leave to serve him by one of the following means:

(a) by posting the relevant document to him at Rybna Street 29, Prague 1, Czech Republic;

(b) by delivering the relevant document to him at Rybna Street 29, Prague 1, Czech Republic;

(c) by posting the relevant document to Mr Robert Zelenka at Jiriho z Podebrad 583/28 in Ceska Lipa, Czech Republic;

(d) by delivering the relevant document to Mr Robert Zelenka at Jiriho z Podebrad 583/28 in Ceska Lipa, Czech Republic;

(e) by posting the relevant document to Mr Robert Zelenka at Hastalska Street 760/27, Prague 1, Czech Republic; and

(f) by delivering the relevant document to Mr Robert Zelenka at Hastalska Street 760/27, Prague 1, Czech Republic.

16. In lieu of personal service of any document on the Thirdnamed Defendant, Paul Anthony Talacko, the Plaintiffs have leave to serve him by one of the following means:

(a) by posting the relevant document to him at Hastalska Street 15, Prague 1, Czech Republic;

(b) by delivering the relevant document to him at Hastalska Street 15, Prague 1, Czech Republic;

(c) by posting the relevant document to Mr Robert Zelenka at Jiriho z Podebrad 583/28 in Ceska Lipa, Czech Republic;

(d) by delivering the relevant document to Mr Robert Zelenka at Jiriho z Podebrad 583/28 in Ceska Lipa, Czech Republic;

(e) by posting the relevant document to Mr Robert Zelenka at Hastalska Street 760/27, Prague 1, Czech Republic; and

(f) by delivering the relevant document to Mr Robert Zelenka at Hastalska Street 760/27, Prague 1, Czech Republic.

17. The Plaintiffs have leave to serve the Second and Thirdnamed Defendants outside of Australia of the following:

(a) the affidavit of Howard Roger Rapke sworn 7 August 2009;

(b) the affidavit of Josef Hlavicka when sworn;

(c) this Order.

Kyrou J also ordered (by order number 4) that Jan Talacko, by 4.15 pm on 12 August 2009:

(a)        communicate with David and Paul by telephone and read out the terms of the order; and

(b)        forward copies of the writ, statement of claim, 17 July 2009 and 24 July 2009 orders to David and Paul.

1. Mr Witt swore affidavits on 7 and 10 August 2009 in which he set out information he had received from Dr Burešová through Jan Talacko about the nature of the proceedings that the plaintiffs had brought in the Czech Republic (without notice to Jan Talacko).[54]  It was suggested that there was a breach by the plaintiffs of undertakings given to the Court in relation to the Czech proceedings.  The affidavits exhibited various documents relating to the Czech proceedings and were in support of the opposition to the continuation of the Mareva injunction against the defendants in the 2009 proceeding.[55]

   [54]Ibid [130].

   [55]Ibid.

1. Kyrou J did not accept the argument that the plaintiffs had breached the undertakings, and rejected any suggested discretionary considerations as warranting refusal of the Mareva relief sought against Jan, David and Paul Talacko.  His Honour held:

On the contrary, the discretionary considerations, overall, are overwhelmingly in favour of the granting of such relief in the form set out in the August Order.[56]

[56]Ibid [131].

1. On 11 August 2009, Mr Witt (in the presence of Jan Talacko) conveyed to David and Paul Talacko, by telephone, the terms of the orders made by Kyrou J on 10 August 2009.[57]

   [57]Talacko v Talacko [2009] VSC 385 [10].

1. On the same day, Jan Talacko forwarded by email to David and Paul Talacko, copies of the documents in the 2009 proceeding (including the 17 July orders).[58]

   [58]Talacko v Talacko [2009] VSC 579 [72].

1. Although it is not entirely clear, it appears that by 26 August 2009, the transfers of all the properties were completed and registered with the Real Estate Registry.

1. On 7 October 2009, the trial of the 1998 proceeding on the question of equitable compensation and the remaining defences commenced before Kyrou J.  The trial took 13 days.  His Honour delivered judgment on 24 November 2009, finding that the plaintiffs were entitled to equitable compensation of €8,955,016 and $881.017.[59]  His Honour dismissed the remaining defences.

   [59]Talacko v Talacko [2009] VSC 533.

1. On 11 December 2009, Kyrou J ordered that in addition to the sums already the subject of the judgment, Jan Talacko pay €592,158 by way of interest.[60]

   [60]Talacko v Talacko [2009] VSC 579 [72].

1. The judgments of Osborn J and Kyrou J were appealed.  The appeals were dismissed by the Court of Appeal and the High Court refused an application for special leave.[61]

   [61]Talacko v Talacko (2011) 31 VR 340; Talacko v Talacko [2011] HCATrans 301.

1. On 17 December 2009, Kyrou J issued warrants for the arrest of David and Paul Talacko to answer charges of contempt of court.

1. On 7 November 2011, Jan Talacko was declared bankrupt.

Background facts: the Czech proceeding and related Victorian decisions

1. In 2008, the plaintiffs instituted proceedings in the Czech Republic in relation to Jan Talacko’s ownership of a number of the properties.[62]

   [62]Talacko v Talacko [2009] VSC 349 [128]; Talacko v Talacko [2008] VSC 128; Talacko v Talacko [2008] VSCA 229 [19]-[20].

1. On 28 February 2008, the District Court of Prague 1 granted a preliminary injunction prohibiting Jan Talacko from disposing of some of the Czech properties and, in particular, from selling, letting for a period longer than 3 years, or encumbering those properties with other third party rights.[63]

   [63]Talacko v Talacko [2009] VSC 533 [302].

1. On 19 March 2008, Jan Talacko lodged an appeal with the City Court of Prague against the decision granting the preliminary injunction.[64] In support of the appeal, he filed a document entitled ‘Answer to Complaint’ dated 4 April 2008, which included the following statement in relation to the terms of settlement referred to at [16] – [22] above:

   [64]Ibid.

My participation in the amicable settlement was forced as the Plaintiffs threatened they would apply for the seizure of my wife’s family house in Australia. At that time, my wife was staying in the house taking care of her sick mother and I was exposed to heavy psychological pressure from the Plaintiffs. I consider my signature on the Terms of Settlement invalid, for it was attached to the document under obviously disadvantageous conditions. At that time, I was in very bad mental and physical shape. ...

...

... I am confident that the settlement is also invalid because it was not inserted into any resolution of the [Supreme Court of Victoria]. Since the settlement fails to provide any enforcement title in Australia, it can not be compliant with the concept of Czech law. In the Czech Republic, I would never agree to an out-of-court settlement with respect to rights which have been statute barred (even if they existed).

... I admit I signed the Terms of Settlement on 23 February 2001. I consider the Terms of Settlement invalid as they were forced upon me. I signed them under distress and under obviously disadvantageous conditions.

During the day-long negotiation, at the end of which I was compelled to sign the terms of settlement, I had neither a Czech legal counsel nor the possibility to access one.

I wanted the purposeless proceedings to be terminated knowing that under international laws an Australian court may not decide on real estate in the Czech Republic. For the same reason, the Australian judge was not willing to make such a decision and did not mention the “so-called settlement” in the official minutes. Despite ... that, as a demonstration of my good faith, I paid the Plaintiffs all of their expenses in the amount of AUD 150,000.

What is more, under Article 6, if I breach the conditions of the settlement, the Plaintiffs cannot but seek compensation from an Australian court, not the transfer of the property.

Such compensation cannot exceed the value of the real estate in my possession (as specified in section 1) under the Terms of Settlement minus expenses. Requiring two thirds of all of the real estate would be invalid under the laws of Victoria. The options on page 10 of the complaint have been fabricated and contradict the original text of the Terms of Settlement dated 23 February 2001.[65]

[65]Ibid.

1. Kyrou J made the following observations of this account in his judgment of 24 November 2009:

Having regard to the principles discussed in this judgment and what the defendant’s senior counsel told Ashley J on 28 February 2001, the defendant’s statement to the City Court of Prague is inaccurate in material respects and would have given that Court a false impression about the settlement, the scope and effect of the Terms and the legitimacy and efficacy of the Victorian proceeding. That false impression had the potential to seriously prejudice the plaintiffs.  I cannot believe that any of the defendant’s Australian lawyers would have had any role in the preparation of such a flawed statement.

Mr Williams informed me that it is not part of the defendant’s case that he signed the Terms under duress.  He submitted that, in his statement to the City Court of Prague, the defendant did not use the expression ‘distress’ in the sense of ‘duress’ under the common law but in the sense of what is recognised as duress in Czech law.  I reject this submission. In my opinion, the defendant was using the expression in its natural meaning rather than in any technical sense under any particular system of law.[66]

[66]Ibid [302]-[303] (citations omitted).

1. Jan Talacko contended that the Czech proceedings meant the continuation of the 1998 proceeding (and its reinstatement) was an abuse of process.  This contention was dismissed by Osborn J in a ruling on 26 June 2008.[67]   His Honour subsequently ordered Jan Talacko to pay the costs of the application.

   [67]Talacko v Talacko [2008] VSC 128.

1. In November 2008, Jan Talacko applied to the Court of Appeal for leave to appeal against Osborn J’s costs order.  The Court dismissed the appeal and said:

...

In this case, the evidence discloses that the ... Czech proceeding was commenced in the following circumstances. First, the [plaintiffs]’ attempts to enforce the terms of settlement in this Court were being vigorously defended by the [defendant]. The defences included an allegation that the [plaintiffs] had repudiated the terms of settlement, that the repudiation had been accepted and that the [defendant] was thereby discharged from any obligations imposed upon him by the terms of settlement. Second, the trial judge had reserved his decision on the preliminary issues, including the repudiation defence, and was yet to deliver his decision. Third, the [plaintiffs] had received legal advice that if their application to enforce the terms of settlement failed, and they wished to enforce their legal rights against the [defendant] in the Czech Republic, some of their legal rights would become unenforceable after February 2008 by reason of the operation of statutory time limitations in the Czech Republic. Fourth, the [plaintiffs] had objectively reasonable concerns that the [defendant] may act to dispose of or encumber the properties which are the subject of the ... Czech proceeding. These concerns arose in circumstances where they were unaware of any other property owned by the [defendant] in the Czech Republic and the [defendant] had transferred his interest in valuable real estate in Victoria to his wife, for no consideration, shortly after the original proceeding against him was commenced by the [plaintiffs]. Accordingly, the ... Czech proceeding includes a claim for interlocutory relief restraining the [defendant] from dealing with the subject properties.

Further, in determining whether the Court should find or infer that the commencement and maintenance of the Czech proceedings constituted a repudiation of the terms of settlement, it is necessary to consider the conduct of the [plaintiffs] when objection was taken by the [defendant] to the continued prosecution of both the application in this Court and the ... Czech proceeding. In this regard, the evidence discloses that the [plaintiffs] immediately offered undertakings to the [defendant], to the effect that they would not prosecute the ... Czech proceedings pending the final resolution of proceedings in this Court. The [defendant] refused to accept the undertakings and maintained the position that the [plaintiffs] were obliged to elect between proceeding in this Court or in the Czech Republic. When the [plaintiffs] refused to so elect, the [defendant] applied to stay or dismiss the proceeding in this Court as an abuse of process. As appears above, the trial judge rejected this application. Based upon revised undertakings, the trial judge held that the continued maintenance of the proceedings in both this Court and the Czech Republic was not vexatious or an abuse of process. The [defendant] did not seek leave to appeal against this decision.[68]

[68]Talacko v Talacko [2008] VSCA 229 [60]-[61].

1. Ultimately, Jan Talacko’s argument that the Czech proceedings stymied the 1998 proceedings was rejected by Kyrou J.[69]

   [69][2009] VSC 533 [296]-[333].

Evidence on the application

The applicants’ evidence

1. The applicants filed the following affidavits:

(a)        David Paul Phelan sworn 5 September 2014;

(b)        Faten Award sworn 2 April 2015;

(c)        David Paul Phelan sworn 9 February 2016; and

(d)       David Paul Phelan sworn 26 February 2016.

Mr Witt’s evidence

1. Mr Witt filed the following affidavits:

(a)        Michael Geoffrey Witt sworn 14 November 2014;

(b)        Daryl John Williams sworn 25 November 2014;

(c)        Daryl John Williams sworn 25 November 2014;

(d)       Robert Douglas Belcher sworn 27 February 2015;

(e)        Simon Wilson QC sworn 25 March 2015;

(f)         Peter James Hiland sworn 29 April 2015;

(g)        Russell Lindsay Berglund sworn 29 April 2015;

(h)        Michael Geoffrey Witt sworn 6 May 2015;

(i)         Janette Witt sworn 25 February 2016;

(j)         Bettina Louise Evert sworn 25 February 2016; and

(k)        Michael Geoffrey Witt sworn 29 February 2016.

1. Mr Witt also gave oral evidence to supplement his affidavits.  His evidence dealt with both the circumstances surrounding the sending of the email and his personal circumstances (which I will set out later).

1. In relation to the email, he said that he sent it early on the morning of the 19^th  at about 5.00 am.  He was tired, had had a long day in court (for another matter), and was frustrated by the result.  He then said as follows:

I am very embarrassed by the e-mail. I was appalled when I re-read it, when this proceeding came to light, and I am very sorry about it. It's certainly - this proceeding has taught me a lot about how to conduct myself, how to deal with difficult clients. In stressful situations to be more cautious in giving advice and not to act so impulsively on important matters like this.[70]

[70]Transcript of Proceedings, Queen v Witt (26 November 2015), 52.

1. In the course of the hearing, Mr Witt also said:

(a)        ‘it was wrong because he was attempting to avoid the court’s judgment;’

(b)        ‘it is wrong to try and avoid the court’s jurisdiction;’ and

(c)        ‘when you are involved in court proceedings you need to be obedient to the court’.[71]

[71]Transcript of Proceedings, Queen v Witt (26 November 2015), 25 – 26.

Principles in relation to a charge of contempt

1. Order 75.11 of the Supreme Court (General Civil Procedure) Rules 2015 (the Rules) provides:

(1)       Where the respondent is a natural person, the Court may punish for contempt by committal to prison or fine or both.

(2)       Where the respondent is a corporation, the Court may punish for contempt by sequestration or fine or both.

(3)     When the Court imposes a fine, it may commit, or further commit, the respondent to prison until the fine is paid.

(4)     The Court may make an order for punishment on terms, including a suspension of punishment.

1. The Court therefore has a wide power: it may imprison (or impose a suspended sentence) or fine a contemnor. [72]  This was not disputed by Mr Witt.

   [72]Scott v Evia [2007] VSC 15 [45]-[50], [70]; Grocon v CFMEU (No.2) [2014] VSC 142 [102].

1. Given Mr Witt’s admission of the charge, it is only necessary to mention a couple of matters in addition to those discussed in R v Witt.[73]

   [73][2016] VSC 19.

1. A contempt of court may be committed by a party acting in a way which may frustrate the administration of justice.  It matters not that David and Paul were not the clients of Mr Witt.  What is relevant is whether his actions inhibited the administration of justice.[74]

   [74]Ibid [46].

Principles of sentencing on a charge of contempt

1. It is accepted that the Sentencing Act 1991 (Vic) does not apply to the imposition of penalty for a contempt of court.[75]  However, as a matter of common sense, the relevant principles for sentencing (including those laid down by the Sentencing Act) should be taken into account, where relevant, to the imposition of a penalty.[76]

   [75]Varnavides v VCAT (2005) 12 VR 1 [17]-[18].

   [76]Grocon v CFMEU (No 2) [2014] VSC 142 [77]-[78].

1. There are a number of decisions of this Court and the Federal Court dealing with the imposition of penalties for contempt.  From those cases, the following are the relevant considerations:

·    the nature and circumstances of the contempt (including the objective seriousness of the contempt);

·    the effect of the contempt on the administration of justice;

·    the contemnor’s culpability as judged by his or her state of mind and intention at the time of the contempt;

·    general and specific deterrence;

·    the previous good character of the contemnor (including the absence or presence of a prior conviction for contempt;

·    the contemnor’s personal circumstances and financial means;

·    whether the contemnor has exhibited contrition and made an apology;

·    denunciation of the contempt; and

·    the passage of time since the occurrence of the contempt.[77]

[77]See DPP v Johnson [2002] VSC 583 [55]-[60]; R v Age Co Ltd [2008] VSC 305, [22]; Alfred v CFMEU (No 2) (2011) FCA 557 [14]; Bovis Lend Lease Pty Ltd v CFMEU (No 2) (2009) FCA 650; Grocon v CFMEU [2014] VSC 142 [77]-[78].

Analysis of the charge

Nature and circumstances of Mr Witt’s contempt

1. I have set out in considerable detail the chronology of events leading up to and surrounding the time the email was sent.  This demonstrates that, by July 2009, Mr Witt must have known of the scheming and deceptive nature of his client and his two sons, David and Paul.  To put it bluntly, I am readily prepared to assume that each was a crook who was prepared to engage in a conspiracy to defraud the other members of the family and would do anything to avoid the processes of the Court. 

1. Mr Witt must have also known that statements to the Court concerning Jan Talacko’s stated intentions to reverse the donation agreement were, in all likelihood, false, and that David and Paul had connived with Jan to endeavour to place the properties outside the reach of their despised relatives.

1. Mr Witt also knew that the terms of the 17 July orders made against David and Paul were designed to prevent the fulfilment of the conspiracy hatched by the three defendants to thwart the likely effect of the judgment of Osborn J.  As an officer of the Court, Mr Witt also knew that he had an obligation to ensure that the Court’s orders were adhered to – even if he considered that the three Talackos would treat the orders as if they were confetti.

1. I should set out the relevant parts of the email again here:

I have deliberately left Paul and David off this email as I do not want it to be able to be said that they had any notice or knowledge of the orders made against them because for so long as they do not have notice of this then they cannot be in contempt if they do not comply.  I therefore strongly advise that no one tells Paul or David anything about this new case other than to warn them to look out for process servers in Prague.

1. Notwithstanding his awareness of his obligations, the email contained three serious breaches of his ethical obligations.

1. First, Mr Witt made a positive decision not to advise Paul or David of the terms of the 17 July orders.  He did this with the stated purpose of endeavouring to ensure that they could not be charged with contempt.  As I have said, it matters not (and it was not contended otherwise by his counsel) that David and Paul were not his clients.  It is clear from the terms of the email that in the regular course of business David and Paul would have received the email, as did his client, Jan, his wife Judith, and the other two children.  This was unethical behaviour, inconsistent with Mr Witt’s oath to uphold the administration of justice in this State.

1. Second, Mr Witt urged the other members of the family not to pass on any information to David and Paul about the 2009 proceeding.  This was also inconsistent with his obligation to the Court and the administration of justice.

1. Third, Mr Witt advised the other members of the family to tell David and Paul to watch out for process servers.  This was a further fundamental breach of his obligation as an officer of the Court.  Mr Witt knew that orders of a serious nature had been made by the Court, and then advised his client and his family to tell two of the defendants in the 2009 proceeding to avoid process servers (which advice I have no doubt was acted upon).

1. I also accept that each of these matters had the potential to inflame Jan Talacko’s manifest disregard for the Court and its orders.  However, in Mr Witt’s defence, I think that, by this time, Jan Talacko’s disdain of the Court’s authority was already well entrenched.

1. There are several other matters that need to be taken into account when examining the circumstances of Mr Witt’s contempt.

1. The first is to spell out the obligations of a legal practitioner.  Emerton J in Legal Services Board v Forster (No 3) said as follows in relation to a legal practitioner charged with contempt:

You are a member of the legal profession of long standing. You well knew the importance of complying with the Order and the seriousness of breaching it. You must also be taken to have appreciated the seriousness of seeking to interfere with the ability of the Board to retain counsel of its choosing. In my view, legal practitioners should be held to a higher standard when it comes to compliance with Court orders and the preservation of the due administration of justice than ordinary members of the public. Legal practitioners are bound to uphold the rule of law, which is an essential element in any civilised and properly functioning community.[78]

[78]Legal Services Board v Forster (No 3) [2012] VSC 640 [15] (‘Forster’).

1. The second is to note that the advice was given under the cover of legal professional privilege.  But for the orders of Elliott J (which removed the veil of the privilege over the email on the basis that it was undertaken in the furtherance of a fraud),[79] this correspondence would never have come to light.  In other words, the giving of such unethical advice was almost certainly undertaken with the anticipation that it would never see the light of day.

   [79]Talacko v Talacko [2014] VSC 328.

1. In addition, notwithstanding Mr Witt’s subsequent statements of remorse and apology for his actions (which I will consider in a moment), he did nothing in the days, weeks or months after sending the email to remedy his conduct (I put to one side actions mandated by the Court).  He did not endeavour to pass on the terms of the injunctions to David and Paul, albeit having their email addresses.  He did not endeavour to right the wrong in relation to the advice to avoid the process servers. 

1. In summary, he did nothing of his own volition until the charge of contempt was laid.

1. This consideration leads me to reject the proposition that in some way his actions were influenced by tiredness or frustration at the orders made by Kyrou J on the previous day, as was suggested in his affidavit.

1. I have no doubt that the true explanation for Mr Witt’s behaviour is that he was far too close to his client and his client’s family.  He was prepared, to the point of now sacrificing his professional reputation, to give advice which was inconsistent with his obligations as an officer of the Court.

1. I do not accept that Mr Witt’s relationship with his client, and the closeness of it, is a mitigating factor.  Rather, it should have been evident to him, given his knowledge of  what his client and two sons had been up to, that they were in all likelihood engaged in fraudulent conduct which could well lead to criminal charges.  The lights should have been flashing (at the absolute latest) once he learnt what was happening in Prague with the donation agreements.  Rather than counsel his client and his client’s sons to comply with the orders of the Court, he effectively took the opposite course in sending the email. 

1. In conclusion, this was egregious conduct by Mr Witt at odds with his oath of office.

Effect of the contempt on the administration of justice

1. It may be accepted that Mr Witt was dealing with an extremely difficult client who was determined to defy orders of the Court.  However, as an Australian lawyer and officer of this Court, Mr Witt has ethical responsibilities which cannot be compromised.  He is held to a higher standard than that of a lay person.  He had an obligation, while practising in this State, to practise law as a fit and proper person.  His duty to the Court was paramount.

1. Mr Witt’s conduct, as I have described, amounted to an inducement to his client, and his client’s sons, to disregard the Court’s authority.  This plainly interfered with the proper administration of justice.

1. In Mr Witt’s favour is the fact that the advice had very little practical effect on the outcome of the proceeding.  As I discuss subsequently, the orders for substituted service made by Kyrou J on 10 August 2009 effectively circumvented the attempts by David and Paul to avoid service of the 2009 proceeding and the 17 July orders.

Mr Witt’s culpability

1. Mr Witt gave viva voce evidence at the first hearing and said that, at the time of sending the email he was aware:

(a)          that Jan Talacko had sought to transfer some properties in the Czech Republic to his sons residing in Prague;

(b)        of his client’s instructions to Senior Counsel which resulted in Senior Counsel’s exchange with Osborn J on 20 June 2008 regarding Jan Talacko’s stated intention not to dispose of the properties in question;

(c)         of his client’s intention to avoid judgment creditors (which showed an underlying intention to avoid the Court’s judgment being given effect to); and

(d)       he prepared the 9 September 2008 affidavit of Jan Talacko, in which Jan Talacko swore that had no intention of dealing with the properties in question other than on normal commercial terms, where permitted (which was based on his client’s instructions).[80]

[80]R v Witt [2016] VSC 19 [42].

1. Mr Witt’s actions were purposeful and intentional.  I acknowledge that, as he and his wife Janette deposed, he was under considerable stress in dealing with a difficult client.  I also accept that Mr Witt’s predecessor, Mr Findlay, played a significant role in providing advice to Mr Witt and, behind his back, to Jan Talacko.  Notwithstanding these matters, it is not uncommon for lawyers to have difficult clients who receive advice from all quarters.  This, coupled with exhaustion and personal issues is insufficient to mitigate Mr Witt’s culpability. 

1. It is important to remember that Mr Witt could have chosen not to continue to act for Jan Talacko.  At times, legal practitioners have to make such decisions, and put principle over profit.  As I mentioned earlier, this is a case of a practitioner becoming too intertwined in his client’s affairs.

Deterrence (general and specific)

1. It is especially important to ensure that lawyers who hold themselves out as, and have declared themselves to be, fit and proper persons to practise that profession in this State, are deterred from elevating their duty to clients over that owed to the Court.  That is particularly so when giving advice which is covered by legal professional privilege. 

1. In relation to specific deterrence, I am confident that Mr Witt will not repeat this conduct.

Good character of the contemnor

1. Mr Witt has practised as a solicitor since 1996.  He lives with two dependent children in a house owned by his wife.  He does not have any prior convictions for contempt.

1. There is a body of affidavit evidence from lawyers who have associated with Mr Witt attesting to his good character and professional attributes.  Mr Witt’s wife, Janette, has also sworn as to his good character.

1. I accept that Mr Witt is a person of good character and well regarded in the community.  I also accept that he is, in normal circumstances, a ‘hardworking, honest and reliable’ solicitor.[81]

   [81]Affidavit of Simon Wilson QC sworn 25 March 2015.

Personal circumstances and financial means

1. In the written submissions filed on behalf of Mr Witt on this charge, it was argued that the punishment should be in the form of a reprimand.  No affidavit material as to his financial circumstances was filed.

1. Prior to the hearing I was aware, from the affidavit material, that Mr Witt was married with two dependent children – both of school age – and that his circumstances were relatively meagre.

1. In the affidavit of his wife, Janette Witt, she deposes that she has had to take on full time employment in case Mr Witt’s ability to practise is limited; they have moved their fourteen year old son from a private to public school because of financial difficulty; and their eleven year old son will also not be able to attend a private school for secondary education as planned.  Mrs Witt also said that their relationship has suffered because of the uncertainty caused by this case; that there has been considerable stress and tension in the home.  I accept her evidence as to these matters.

1. I also accept, as deposed by Mr Witt in his affidavit of 10 November 2014, that this was a difficult time, both with personal issues and the conduct of Jan Talacko’s litigation.

1. In the course of discussion with counsel as to penalty, I indicated that the real choices in this case lay between imprisonment and a large financial penalty.  This produced a further affidavit filed the evening of the first day of the hearing.  In that affidavit, Mr Witt set out the details of his earnings, which were somewhat different to that which I had assumed from the earlier affidavits.  It is not necessary to go into detail, save to say that Mr Witt’s income (however it is distributed) from the practice is in the region of approximately $150,000 gross per annum from what appears to be a modest, but successful, two-person suburban practice. 

Denunciation of the contempt

1. I consider denunciation to be of utmost importance in this case.  As Emerton J aptly noted in Forster:

As Harper J said in R v Garde-Wilson, [82] the community must be able to look to legal practitioners to shoulder responsibility for the maintenance of the rule of law to a greater extent than persons who do not make their livelihood from the law.[83]  

[82][2005] VSC 452.

[83]Forster [2012] VSC 640, [16].

Apology / contrition

1. I consider that Mr Witt’s insight, contrition (albeit late in the day), admission of the charge, and subsequent ‘sincere and unconditional’[84] apology to the Court (which I accept) must mitigate the penalty to be imposed.

   [84]Affidavit of Mr Witt, 10 November 2014 [21].

1. In particular, there was a real utilitarian benefit in Mr Witt’s admission of this charge at an early point in time.  Equally, I think it shows a real degree of remorse as to his conduct.  To some extent, that is tempered by the reality of the situation: his actions will affect his career and indeed have placed his liberty in jeopardy.  In such circumstances, remorse may be for the predicament – not the wrong.

1. I reiterate that Mr Witt did not, at any time after sending the email in question, attempt to correct his mistake or acknowledge an error on his part.  It was only when answering to the contempt charge that he demonstrated remorse.  Having said that, I am satisfied that it is genuine and that Mr Witt sincerely understands and regrets his actions.

Other considerations

1. I am also conscious that Mr Witt’s conviction on this charge will, in all likelihood, place his practising certificate in jeopardy.  I was told by counsel that he has reported the charge and his admission of it to the Legal Services Commissioner.  I assume that he will be charged and, given his plea to this charge, convicted of a serious ethical offence.

1. In addition, there are the costs that Mr Witt has incurred personally in defending the charges.  In due course, I will make an order that he pay the applicants’ costs on an indemnity basis. 

Conclusions as to penalty

1. For the reasons I have set out, this is a serious charge.  The penalty must sheet home to all legal practitioners that actions by lawyers (whose duty is to uphold the rule of law) which frustrate the process of the Court cannot be tolerated, particularly when carried out under the cloak of legal professional privilege.  Mr Witt’s conduct as a legal practitioner must be denounced.  He must also be punished for his actions which were inconsistent with his obligations to the Court.  But for his admission of the charge and acknowledgment of his unethical conduct, it is my firm opinion that the only realistic penalty would be that of imprisonment for a period of months.  However, I am satisfied that, given his admission of the charge (coupled with a reasonable degree of remorse), his previous good character, anxiety suffered over a lengthy period of time caused by the uncertainty about the result of the charge and its impact on himself and his family, and my belief that he will never again engage in this type of behaviour, such a drastic penalty should not be imposed.

1. Rather, I think that the appropriate penalty is the imposition of a substantial fine, notwithstanding that this decision will inevitably result in other significant financial consequences.

1. In my view, the appropriate penalty is a fine of $25,000, to be paid as follows:

(a)       $5,000 on or before 30 July 2016.

(b)      $10,000 on or before 30 December 2016.

(c)       $10,000 on or before 30 August 2017.

In the event that Mr Witt fails to pay any of these sums by the due date, he will be liable to ninety days imprisonment and will forfeit any amount already paid.[85] 

[85]         Rule 75.03.  See Chen v Chen (No 3) [2007] VSC 52 [24]; Pattinson v Bell (2007) FCA 137 [45].

1. The penal orders are set out in detail at [188].

The applicants’ claim for reparation

1. The applicants argue that they have suffered loss as a direct result of Mr Witt’s conduct.  In an affidavit sworn by Mr Phelan on behalf of the applicants on 9 February 2016, the losses are divided into three broad categories:

(a)        the costs associated with failed attempts at personal service of David and Paul Talacko in Prague pursued in July and August 2009 ($5,872.36);

(b)        the costs associated with service under the Hague Convention in 2014 ($36,657.93); and

(c)        the whole or part of legal costs incurred by the applicants in relation to the 1998 and 2009 proceedings ($1,854,600.91).

1. The court has a wide and flexible power to punish contemnors, as well as powers to allow the contempt to be purged.[86]  Windeyer J in Australian Consolidated Press Ltd v Morgan said:

When contempt lies in disobedience of an injunction not to do something, the contemnor is ordinarily permitted to purge his contempt by an apology to the court, making reparation for the damage done by the forbidden act and paying the costs as between solicitor and client: see the article “Contempt of Court” in the Encyclopaedia of the Laws of England. I do not suggest that a person who contumaciously disobeys a decree may not in some cases be, sentenced to remain in custody for a fixed term by way of expiation. There are instances of that in the reports; and see s. 93 of the Equity Act, 1901-1957 (N.S.W.). Nevertheless the processes that an equity court uses to enforce its orders are primarily coercive or remedial rather than punitive.[87]

[86]Australasian Meat Industry Employees Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98, 114 - 115; Registrar, Court of Appeal v Maniam (No 2) (1992) 26 NSWLR 309.

[87]Australian Consolidated Press Ltd v Morgan (1965) 112 CLR 483, 498 - 499 (‘Australian Consolidated Press’).

1. In United Telecasters Sydney Ltd v Hardy, Samuels AP expanded upon this concept, and considered the ability to recover such losses as a separate right or cause of action:[88]

Provided a victim of a contempt can prove that he suffered actual damage as a result of the contempt, it may well be arguable that the generative forces of the law which rose to meet the problem of the abuse of court processes can accommodate the challenge of remedying damage inflicted on parties by contemnors. Contempts by the media are an increasingly common problem in the administration of criminal justice, and a common consequence is the need to abort trials. An accused who is not legally aided must bear his costs of the trial. He thus incurs a substantial loss because of the wrong of a third party; and the same might be said of legal aid services. This loss must be seen in its typical context, namely, that it is likely that an accused will have to face a new trial and new costs. The accused must retain legal representation in the interim until his new trial, and bear the costs occasioned by delay. It might be said that to deny him an action on the case would be to leave him uncompensated for his substantial loss, a loss for which he was in no way responsible. For these reasons, it is, I think, fairly open to argue that, by analogy with the tort of collateral abuse of process, the law in such circumstances should recognise an action on the case to recover damages for loss occasioned to an accused by a criminal contempt of court occasioning the need for a pending trial to be aborted. In my opinion, therefore, UTS has not established that the claims for reparation and damages disclose no reasonable cause of action and are so clearly untenable that they cannot possibly succeed. In my view, an arguable claim for recovery is open and Hardy should not be deprived of his opportunity to lay it before the court.[89]

Although this statement related to criminal contempt, it is clear that his Honour’s remarks are of general application.[90]

[88](1991) 23 NSWLR 323.

[89]Ibid 347 (Emphasis added).

[90]Ibid 340-341.

1. It follows that, provided there is a connection, in a legal sense, between the contempt and the alleged loss, it is open to a court to make an order for reparation of the damage.

1. A number of factual matters should now be restated.

1. First, as is evident from the background set out above, the determination of Jan, David and Paul to effect the fraud (in avoiding compliance with the terms of settlement) was evident from 2002 (if not earlier) and persists to the present day.

1. Second, the 17 July orders are the only relevant orders which were frustrated by Mr Witt’s conduct.  Those orders restrained David and Paul from taking any further steps by themselves or by their employees, agents or attorneys for the purpose of or in furtherance of the registration of the transfers to them of the properties.[91]  The email was directed to evading the effect of these orders.

   [91]See [56] above.

1. Third, the registration of the transfers of Jan’s interests in all the Czech properties to David and Paul Talacko occurred by 26 August 2009 as a consequence of the lodging of the transfers in June 2009.

1. Fourth, on 10 August 2009, Kyrou J heard the application for substituted service.  His Honour stated:

I am satisfied that [David and Paul] are aware of the general nature of the plaintiffs’ allegations against them and that they have been avoiding.[92]  

[92]Talacko v Talacko [2009] VSC 349 [44].

1. Fifth, the orders effecting substituted service on David and Paul meant that each was effectively served with the 17 July orders (and those of 24 July 2009).

1. Sixth, notwithstanding the 17 July and subsequent orders, neither David nor Paul took any steps to reverse the transfer.

Attempts at personal service and associated costs in 2009

1. The applicants expended $5,872 in their attempts to serve David and Paul Talacko with the 17 July orders as well as other documents.

1. It is clear that David and Paul endeavoured to avoid service and that Mr Witt’s advice, as a matter of probability, contributed to this conduct.

1. Mr Witt accepts liability to pay these costs. 

Hague service and associated costs in 2014

1. In June 2014, the applicants sought to serve David and Paul Talacko pursuant to the Hague Convention.  Mr Witt denies responsibility for these costs.

1. The applicants argue that, had David and Paul been served and not avoided personal service (which they were encouraged to do), then it would not have been necessary to proceed by way of Hague Convention service in 2014.

1. This submission misses a fundamental point.  When the plaintiffs failed to effect personal service on David and Paul they sought, and were granted, orders for substituted service on the sons.  Orders to this effect were made by Kyrou J on 10 August 2009.

1. David and Paul were made aware of the proceeding on 12 August 2009 over the telephone when they were read the terms of the orders of Kyrou J.  The posting of the orders constituted substituted service.   So, David and Paul had been effectively served with the process by, at the latest, 12 August 2009.

1. It follows that the prejudicial effect of Mr Witt’s advice to avoid service was spent once the terms of the orders of Kyrou J of 10 August 2009 were complied with.  Given that David and Paul had been served four years preceding the attempts at Hague Convention service, there is no tenable connection between the applicants’ expenditure on that form of service (and the associated costs of extending the writ in the 2009 proceeding) and Mr Witt’s email. 

1. Moreover, the object of utilising the Hague Convention was unrelated to the conduct of the 2009 proceeding in this State.  It is clear that the purpose was to ensure that the judgment of Kyrou J was enforceable in the Czech Republic. 

1. No order for reparation under this head should be made.

Legal costs of the 2009 proceeding

1. The applicants claim the costs (or part) of the 1998 and 2009 proceedings which sought to reverse or set aside, or otherwise declared void, the donation agreements.  In the alternative, they claim reparation for the effects of the donation agreements.

1. Mr Witt denies any liability for these costs.

1. The applicants’ primary argument is that, but for Mr Witt’s email, the transfer of the properties the subject of the donation agreements would have been halted.  It is then said that in a scenario where Jan Talacko would have remained the owner of those properties, he would have retained the financial capacity to pay the equitable compensation ordered by Kyrou J for his breach of the terms of settlement in the 1998 proceeding.

1. Alternatively, it is said that service on David and Paul would, in some way, have led to a negotiated settlement of the 2009 proceeding.

1. It was put this way by counsel for the applicants:

If an officer of the Court has put squarely and firmly to is clients and the family members that they ought to comply with these orders then there is, although it might be said not to have been a high prospect of compliance, it cannot be ruled out that there might have been some form of compliance.

1. For this contention to succeed, it must be established that effective service of the 17 July orders on David and Paul in Prague in late July may, at the least, have influenced them to not proceed with the registration of the transfers pursuant to the donation agreements.

1. I am prepared to accept, for the purpose of the argument, that the applicants may recover an amount for reparation if they establish the loss of a chance, or an opportunity to achieve a better outcome in the 1998 proceeding, resulting from Mr Witt’s conduct.

1. In determining whether such a proposition can be established, I think it appropriate to apply the principles set out by the High Court in relation to the recovery of such damages in tort and contractual cases.  In Sellars v Adelaide Petroleum[93] the Court (Mason CJ, Dawson, Toohey and Gaudron JJ) said:

Notwithstanding the observations of this Court in Norwest, we consider that acceptance of the principle enunciated in Malec requires that damages for deprivation of a commercial opportunity, whether the deprivation occurred by reason of breach of contract, tort or contravention of s 52(1), should be ascertained by reference to the court's assessment of the prospects of success of that opportunity had it been pursued. The principle recognized in Malec was based on a consideration of the peculiar difficulties associated with the proof and evaluation of future possibilities and past hypothetical fact situations, as contrasted with proof of historical facts. Once that is accepted, there is no secure foundation for confining the principle to cases of any particular kind.

On the other hand, the general standard of proof in civil actions will ordinarily govern the issue of causation and the issue whether the applicant has sustained loss or damage. Hence the applicant must prove on the balance of probabilities that he or she has sustained some loss or damage. However, in a case such as the present, the applicant shows some loss or damage was sustained by demonstrating that the contravening conduct caused the loss of a commercial opportunity which had some value (not being a negligible value), the value being ascertained by reference to the degree of probabilities or possibilities. It is no answer to that way of viewing an applicant's case to say that the commercial opportunity was valueless on the balance of probabilities because to say that is to value the commercial opportunity by reference to a standard of proof which is inapplicable.[94]

[93](1994) 179 CLR 332.

[94]Ibid [38]-[39] (Emphasis added).

1. The applicants must therefore establish that Mr Witt’s conduct – which, in terms of detrimental effect, was the advice to be given to David and Paul to avoid process servers – was productive of some loss or damage.

1. The problem for the applicants is the assumption that the 17 July orders, if served on David and Paul in late July or early August, would, in some way, have influenced events in Prague, and in particular the registration of the transfers.  For the following reasons, I do not accept this argument.

1. First, as I have said, the substantive prejudice caused by Mr Witt’s advice was undone within a fortnight, or at best for the applicants, three weeks.

1. Second, the 17 July orders were directed at preventing David and Paul from taking any future action in relation to the transfers.  They did not mandate withdrawal of the transfers which had already been lodged at the Registry.

1. Third, accepting that the initial attempts at service on David and Paul in Prague on 28 July (and afterwards) were frustrated by Mr Witt’s conduct, it is simply wishful thinking to imagine that service of the 2009 proceeding (and 17 July orders) would have had any effect on the registration of the transfers to David and Paul.  By late July, the die was well and truly cast.  As discussed previously, the determination of the three conspirators was patent from 2002 (if not earlier).  The transfers were part of the scheme to avoid any part of Jan’s assets being attacked by the plaintiffs.  The transfers had been lodged for over one month.  In some cases, the transfers had already been registered.  Instructions had been given to Dr Burešová to continue with the registrations of the transfers.  Notwithstanding Jan Talacko’s false assurances to the Court, he continued to obfuscate and prevaricate.  It can be readily assumed, the transfers would be registered in accordance with Czech law, whatever happened in Australia.

1. Several Court-ordered requests by Jan Talacko in June 2009 asking David and Paul to withdraw the transfers were ignored (although one would readily infer that contrary instructions were given privately).  From late July, David and Paul had advised this Court that they would have nothing to do with the proceedings in this State.  The registrar at the Real Estate Registry had been told that they were not prepared to withdraw the transfer.

1. Court orders directed to David and Paul were treated no differently.  This is amply demonstrated by the refusal of David and Paul to comply with Kyrou J’s 24 July orders.  As opposed to the 17 July orders (which were directed at preventing future conduct), the 24 July orders were mandatory and required, in effect, steps to be taken to reverse the transfers.  

1. The short point is that David and Paul did nothing to withdraw the transfers, notwithstanding that they were on notice of the Court’s orders.

1. In conclusion, I am satisfied that there was no realistic prospect that David and Paul would have been deterred in any way from continuing to perpetrate the fraud had they been served with the 17 July orders in late July or early August, rather than on 11 August. 

1. It follows that it is inconceivable that, in this context, delay in effecting service of the 17 July orders made any difference to the registration of the transfers to David and Paul.  No damage to the applicants flowed from Mr Witt’s conduct.

1. The alternative argument put by the applicants for reparation was that Mr Witt’s actions resulted in the loss of the opportunity to avoid incurring the costs associated with prosecution of the two claims.  It was said that a negotiated settlement may have been achieved, thus reducing the costs ultimately expended.

1. As to this point, the prospect of a deal is entirely illusory, essentially for the same reasons I have set out in relation to the primary argument.  Nothing was going to deter Jan Talacko and his sons from Jan’s stated aim: ensuring that not one cent found its way to his relatives.

1. The second basis for seeking an amount under this head is that the applicants should receive a payment out of the sequestered funds in acknowledgement of the harm suffered by them.  So, in this case, part of the fine imposed by the Court would be paid to the applicants – arguably consistent with the approach taken by the High Court in Australian Consolidated Press Ltd v Morgan[95] in relation to sequestered property.   In that case, Windeyer J contemplated a payment being made to those who suffered loss as a consequence of the contempt out of any fund arising from the sequestered assets:

Sometimes it may be appropriate that the proceeds of the sequestration, or part thereof, should be applied to the discharge of an equitable obligation, as for example by a direction that equitable debts, the non-payment of which had led to the sequestration, be first paid out of the fund; or that the fund be applied so far as necessary in reparation of the damage caused by the contemnor’s disobedience. But this only illustrates again that sequestration for a civil contempt is coercive and compensatory rather than punitive.[96]

[95]Australian Consolidated Press (1965) 112 CLR 483, 501.

[96]Ibid [501] (Emphasis added).

1. I do not accept that such a course is appropriate in this case.  Mr Witt’s conduct, whilst inconsistent with his oath of office for the reasons I have set out, produced no demonstrable loss to the applicants, over and above the costs associated with attempted service.

Conclusion as to reparation

1. The applicants are entitled to the sum of $5,872.36 for attempts made at personal service.

Costs of the application

1. Mr Witt accepts that he should pay the costs associated with the hearing of charge four on an indemnity basis, but says his cost liability should stop there.

1. There may be an issue about the costs of the hearing associated with charge three.  Solicitors for Mr Witt made a Calderbank offer and, I suspect, wish to argue that, given that the charge was dismissed, their client has an entitlement to costs of that application.

1. I should make the position clear: a contempt application is totally different from any other form of civil process.  Subject to being persuaded otherwise, it is not amenable to the offer and counter-offer process associated with civil proceedings.  Once the Court is seized of the issue, the question of the conduct of the alleged contemnor and any associated costs is a matter for the Court.  Of course, in a case of an unmeritorious contempt proceeding, the liability of the applicants for costs would become a live issue.  This is not such a case.

1. I agree with counsel for the applicants that it would have been inappropriate to settle a contempt case of this kind.  In this instance, while the applicants have a private interest in the outcome of this case, there is also a clear element of public interest (especially when it involves the private communications of a legal practitioner to his clients designed to undermine the court processes) in the applicants’ pursuit of the contempt charges.[97]

   [97]See Louis Vuitton Malletier SA v Design Elegance Pty Ltd [2006] FCA 83.

1. I regard the first hearing (on charge three) as significant to the outcome of this hearing; it provided the necessary background to comprehend, fully, the scale of Jan Talacko’s fraud, the relationships between Mr Witt and Jan Talacko, and the arrangements between Jan Talacko and his two sons, David and Paul.

1. Subject to hearing from counsel for Mr Witt, I will order that Mr Witt pay the applicants’ costs of both hearings on an indemnity basis.

Orders

1. Subject to hearing from Mr Witt’s counsel as to the question of costs, I will make the following orders:

1.          Michael Geoffrey Witt is adjudged in contempt of Court in that on 18 July 2009, as an officer of the Court, he communicated by email with his client, Jan Talacko, and his wife, Judith Talacko, and their children Peter and Nicole Talacko, and sought to prevent David and Paul Talacko from becoming apprised of the orders of 17 July 2009 in proceeding S CI 2009 7819 and thereby to frustrate the intended effect of those orders, and is convicted and fined $25,000 to be paid as follows:

(a) $5,000 on or before 30 July 2016.

(b) $10,000 on or before 30 December 2016.

(c) $10,000 on or before 30 August 2017.

2.        In the event of Michael Geoffrey Witt failing to pay any of the amounts set out in [1] by the stipulated dates then Mr Witt is to be imprisoned for a period of ninety days.  Any amounts paid by Mr Witt shall be forfeited.  

3.        A warrant of committal to prison of Michael Geoffrey Witt shall not issue until further order of this Court.

4.        Mr Witt pay to the applicants:

(a)        the sum of $ 5,872; and

(b)       the costs of and incidental to the hearings before me on 26 November 2015, 29 February 2016 and 1 March 2016 (including any reserved costs), and the costs of hearing judgment on 11 April 2016, on an indemnity basis.

Further steps

1. In my opinion, the reasons for judgment in this case and in the numerous decisions of judges of this Court should be considered by the Director of Public Prosecutions.  There is a significant body of evidence which supports a prime facie case that there have been significant breaches of the criminal law by members of Jan Talacko’s family and, perhaps, their associates and agents.  It is immaterial that David, Paul and Judith now reside overseas.  The primary concern, as this case demonstrates, is the administration of justice (and particularly the efficacy of Court orders).  The conduct of all involved needs to be scrutinised by the prosecuting authority.