Talacko v Talacko

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

S CI 1998 07393

JAN TALACKO (AS EXECUTOR OF THE ESTATE OF HELENA MARIE TALACKO) & ORS (ACCORDING TO THE SCHEDULE ATTACHED)	Plaintiffs
v
JAN EMIL TALACKO	Defendant

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JUDGE:	SLOSS J
WHERE HELD:	Melbourne
DATES OF HEARING:	11, 12 (mention) and 13 May 2015
DATE OF JUDGMENT:	12 November 2015
CASE MAY BE CITED AS:	Talacko & Ors v Talacko
MEDIUM NEUTRAL CITATION:	[2015] VSC 624

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PRACTICE AND PROCEDURE – Certificate under Foreign Judgments Act 1991 (Cth) – Judgment debtor was bankrupt at time when judgment creditor made application for the certificate – Whether s 58(3) of Bankruptcy Act 1966 (Cth) operated as a stay of enforcement of the judgment debt – Whether application for certificate issued by the Prothonotary pursuant to s 15 of the Foreign Judgments Act 1991 (Cth) and O 11 of the Supreme Court (Miscellaneous Civil Proceedings) Rules 2008 was ‘duly made’.

BANKRUPTCY – Effect of a sequestration order on enforcement of a judgment debt – Whether s 58(3) of Bankruptcy Act 1966 (Cth) operates to prevent a judgment creditor from taking steps to enforce remedy in respect of a provable debt – Whether application made by a judgment creditor during bankruptcy for a certificate under s 15 of the Foreign Judgments Act 1991 (Cth) is ‘duly made’.

JUDICIAL REVIEW – Challenge to the issue by the Prothonotary of a certificate under s 15 of the Foreign Judgments Act 1991 (Cth) – Whether the act of the Prothonotary in issuing a certificate is a ‘decision’ for the purposes of the Administrative Decision (Judicial Review) Act 1977 (Cth) – Whether the ‘decision’ is reviewable under the inherent jurisdiction of the Court or under O 56 of the Supreme Court (Civil Procedure) Rules 2008 – Whether any review of a ‘decision’ of the Prothonotary must take place under the Administrative Decision (Judicial Review) Act 1977 (Cth).

JUDICIAL REVIEW – Cross-vesting – Special federal matter – Whether a review of the issue by the Prothonotary of a certificate under the Foreign Judgments Act 1991 (Cth) is a ‘special federal matter’ under the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth) – Whether there are ‘special reasons’ for the matter to be determined by the Supreme Court.

PRACTICE AND PROCEDURE – Death of a party – Two applicants seeking appointment as sole representative of the estate in the proceeding – Appointment of representative under r 16.03 of the Supreme Court (General Civil Procedure) Rules 2008.

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APPEARANCES:	Counsel	Solicitors
For Mr David Jellicoe Findlay (Applicant)	Mr J Guss	Joseph Guss
For Mrs Judith Gail Talacko (Applicant)	Mr J D Merralls QC and Mr J B Masters	Strongman & Crouch
For the 2^nd – 5^th Plaintiffs (Respondents)	Mr S Howells and Dr M Sharpe	Tolhurst, Druce & Emerson

TABLE OF CONTENTS

Introduction......................................................................................................................................... 1

The Foreign Judgments Act 1991 (Cth).......................................................................................... 2
The 1998 proceeding..................................................................................................................... 3
The various proceedings commenced in the Czech Republic on 4 November 2011......... 4
Sequestration order made on 7 November 2011 against the estate of Mr J E Talacko....... 5
The first certificate issued by the Prothonotary dated 4 July 2012........................................ 6
The use made of the first certificate in the proceedings in the Czech Republic................. 9
The gist of the rival arguments advanced in the petition proceedings in the Czech Republic about the effect of Mr Talacko’s Australian bankruptcy........................................................................ 10
Orders made by North J on 10 December 2012 granting leave to take further steps....... 15

Challenge to the validity of the first certificate.......................................................................... 15

The hearing of the applications before Daly AsJ....................................................................... 18

Appeals lodged against Daly AsJ’s Ruling................................................................................. 20

The Prothonotary’s second certificate dated 23 February 2015........................................... 20
The issue of the second certificate effectively renders the appeals futile.......................... 23
The process (as agreed between the parties) to be adopted in respect of the appeals.... 26

The hearing of the fresh summonses dated 8 May 2015........................................................... 27

Did the Prothonotary have power under s 15 of the Foreign Judgments Act 1991 (Cth) to issue a certificate with respect to the judgment and orders made in the 1998 proceeding?...... 28

Relevant provisions of the Bankruptcy Act 1966 (Cth)........................................................... 29
The scheme of the Bankruptcy Act 1966 (Cth).......................................................................... 31
The effect of the sequestration order on the relationship between debtor and creditor.. 32
Does s 58(3) operate to impose a stay of execution of the judgment debt for the purposes of s 15(2) of the Foreign Judgments Act 1991 (Cth)?....................................................................................... 35
What effect, if any, does the leave granted by North J nunc pro tunc on 10 December 2012 have vis-à-vis the first (and second) certificates?...................................................................................... 41
The second to fifth plaintiffs contend that the first certificate and/or the second certificate were nevertheless valid and effective because their actions were directed to ‘recognising’ rather than ‘enforcing’ the judgments.......................................................................................................... 50
Summary of conclusion.............................................................................................................. 53

Review of the acts of the Prothonotary as an official of the Court – is the Court’s inherent supervisory jurisdiction overridden by either the ADJR Act or Order 56 of the Rules?.................... 53

The Court’s inherent supervisory jurisdiction....................................................................... 53
Order 56 – does mandamus or certiorari lie against the Prothonotary?............................ 57
The ADJR Act............................................................................................................................... 58
Does the Supreme Court have jurisdiction to determine this matter by reason of s 4(1) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth)?................................................................ 63
Conclusion................................................................................................................................... 65

Alleged errors or deficiencies in the second certificate............................................................. 66

Whether Mr Findlay or Mrs Talacko is to be appointed as representative of Mr J E Talacko’s estate 67

Rule 16.03 of the General Civil Procedure Rules................................................................... 67
Mrs Talacko as a candidate for appointment......................................................................... 68
Mr Findlay as a candidate for appointment........................................................................... 69
Appointment of a sole representative of the estate............................................................... 70

Summary of outcome and proposed orders................................................................................ 74

HER HONOUR:

Introduction

The applications made in this proceeding (the ‘1998 proceeding’) involve challenges to both the validity and correctness of certificates issued by the Prothonotary of this Court purportedly pursuant to s 15 of the Foreign Judgments Act 1991 (Cth). The certificates, which purport to be certificates as to the finality of judgments and orders obtained in the Supreme Court of Victoria, have been sought for use (and in the case of the first certificate, used) in proceedings brought by the second to fifth plaintiffs in courts in the Czech Republic.

The substantive issue raised by the present applications concerns the interplay between the provisions of the Foreign Judgments Act 1991 (Cth) empowering the issue of certificates of judgments obtained in Australian courts, and the provisions of the Bankruptcy Act 1966 (Cth) that operate to convert the rights of judgment creditors upon the making of a sequestration order. The applicants, Mrs Judith Talacko and Mr David Findlay respectively, have separately brought applications seeking to challenge the exercise of power by the Prothonotary, and the validity of the certificates issued at the request of the second to fifth plaintiffs, relying principally on s 58(3) of the Bankruptcy Act 1966 (Cth) which they contend operates to impose a stay of execution for the purposes of s 15(2) of the Foreign Judgments Act 1991 (Cth).[1] There is also a procedural issue raised as to whether a representative of the estate of the defendant, the late Mr J E Talacko, should be appointed for the limited purpose of agitating the substantive issue, and if so, which of the two candidates who have consented to do so, namely Mrs Talacko and Mr Findlay, should be appointed. In response, the second to fifth plaintiffs contend that any application to challenge the validity of the certificates ought be made under either the Administrative Decisions (Judicial Review) Act 1977 (Cth) (‘the ADJR Act’) or under Order 56 of the Supreme Court (General Civil Procedure) Rules 2005 (the ‘General Civil Procedure Rules’).
[1]After the applications were heard, a fresh summons was issued by Mrs Talacko dated 26 August 2015 seeking to restrain the first plaintiff in the 1998 proceeding, Dr Jan Talacko, from enforcing the judgment of Kyrou J dated 11 December 2009 or otherwise seeking to use or rely upon the first certificate or the second certificate issued by the Prothonotary until the present summonses have been determined. At the hearing of the fresh summons, it became apparent that a further certificate dated 4 June 2013 (the ‘third certificate’) had been issued by the Prothonotary at the request of the first plaintiff. This led to further summonses being issued by each of Mr Findlay and Mrs Talacko respectively, seeking relief in respect of the third certificate along similar lines to that sought in respect of the first and second certificates. Orders were made on 22 September 2015 adjourning those summonses to a date to be fixed at or following the delivery of judgment in respect of the present applications.

In order to understand the basis on which the second to fifth plaintiffs apparently sought the issue of the certificates, the use they have made of the certificates in various proceedings in the Czech Republic, and the several bases on which the certificates are now sought to be challenged, it is necessary to recount in some detail the background to this proceeding and the other substantive litigation on foot between the parties over many years. Before doing so, however, it is convenient to outline the statutory framework established under the Foreign Judgments Act 1991 (Cth).

The Foreign Judgments Act 1991 (Cth)

The long title for the Foreign Judgments Act 1991 (Cth) states that it is ‘[a]n Act relating to enforcement of foreign judgments in the Commonwealth, and for related purposes.’ The Act was intended to ‘provide a framework for the enforcement of foreign civil judgments in Australia by a simple registration process’ that would ‘replace existing State and Territory legislation governing registration and enforcement of foreign civil judgments in State and Territory supreme courts.’[2]
[2]Commonwealth, Parliamentary Debates, House of Representatives, 29 May 1991, 4218 (The Hon. Michael Duffy, Attorney-General).

When the Foreign Judgments Act1991 (Cth) was enacted, it replaced the existing State and Territories-based system of registration.[3] In Re Cryonic Medical,[4] Nettle J observed that for the most part, the Act was enacted to overcome the difficulties of enforcing a foreign judgment at common law, and sought ‘to provide a framework for the enforcement of foreign civil judgments in Australia by a simple registration process, and to give effect to arrangements agreed with New Zealand as part of closer economic relations and an agreement entered into with the United Kingdom in 1990.’[5]
[3]See Yoon v Song [2000] NSWSC 1147, at [12].
[4][2002] VSC 338.
[5]Ibid, at [7]. See also M Davies, A Bell and P Brereton (eds), Nygh’s Conflict of Laws in Australia, (LexisNexis Butterworths, 9^th ed, 2014), at 936, [41.1].

One of the ‘related’ purposes of the Foreign Judgments Act 1991 (Cth) was to provide for the issue of certificates pertaining to judgments obtained in Australian courts. Relevantly, s 15 of the Act provides for the issue of certificates ‘where an application is duly made by a judgment creditor who wishes to enforce in a country a judgment that has been given in an Australian court’. Section 16 provides for the making of regulations and s 17 effectively confirms that the power to make rules regulating the practice and procedure of a superior court extends to making any rules, not inconsistent with the Act or regulations made pursuant to it, ‘prescribing all matters necessary or convenient to be prescribed for carrying out or giving effect to this Act’ including ‘(b) prescribing the matters to be proved on an application for the registration of a judgment and for regulating the mode of proving those matters’.

The 1998 proceeding

Mr Jan Emil Talacko (‘Mr J E Talacko’) is the sole defendant to the 1998 proceeding. In October 1998, the second to fifth plaintiffs, who are named as respondents to each of the present applications, together with other members of the wider Talacko family commenced proceedings against Mr J E Talacko alleging causes of action for breach of contract, breach of trust and breach of fiduciary duty in respect of dealings with a number of properties in Europe. These properties were apparently properties that were owned by Mr J E Talacko’s parents prior to them being seized by communist regimes in Czechoslovakia and East Germany. Terms of settlement were entered into on 23 February 2001, by way of settlement of the 1998 proceeding, but when Mr J E Talacko breached his obligations under those terms of settlement the plaintiffs successfully applied for reinstatement of the 1998 proceeding.[6] Subsequently, on 11 December 2009, final orders were made by Justice Kyrou requiring Mr J E Talacko to pay the plaintiffs the total sum of € 10,073,818.[7] On 16 September 2013, the plaintiffs also obtained an order for costs in a substantial money sum against Mr J E Talacko. Both the judgment and the costs order remain unsatisfied.
[6]Talacko v Talacko [2008] VSC 128 (24 April 2008).
[7]Talacko v Talacko [2009] VSC 579 (11 December 2009). The judgment required the defendant to pay to the first plaintiff, and to the second to fifth plaintiffs, respectively, the sum of € 4,740,830, and € 296,079 by way of interest.

Mr J E Talacko brought an appeal in respect of the decision and final orders made by Kyrou J but it was dismissed by the Court of Appeal on 18 March 2011.[8] An application for special leave to appeal from that decision was dismissed by the High Court of Australia on 28 October 2011.[9]
[8]Talacko v Talacko [2011] VSCA 71.
[9]Talacko v Talacko [2011] HCATrans 301.

The various proceedings commenced in the Czech Republic on 4 November 2011

Following the dismissal of Mr Talacko’s application for special leave, the Czech lawyers acting for the second to fifth plaintiffs commenced two petition proceedings in the District Court for Prague 1. The first petition proceeding, No 49 EXE 2107/2011-73 was filed on 4 November 2011 against Mr J E Talacko. The second, petition proceeding No 68C 139/2011, was filed on the same day against David Talacko and Paul Talacko, who are sons of Mr J E Talacko and his wife, Mrs Judith Talacko, and resident in Prague.

The nature of these two petition proceedings has been the subject of affidavit evidence from Mr Josef Hlavicka, the Czech lawyer acting for the second to fifth plaintiffs.[10] In an affidavit of Mr Hlavicka sworn on 9 November 2012 (and filed in the bankruptcy proceedings in the Federal Court),[11] he describes petition proceeding No 49 EXE 2107/2011-73 as an ‘execution petition’, that was filed against Mr J E Talacko:

in order to enforce the obligation to pay the Clients the amount of EUR 4,740,830, the amount of EUR 296,079 and the amount of AUD 81,914.40 on the basis of final, conclusive and enforceable decisions of the Supreme Court of Victoria at Melbourne . . . The execution petition was lodged to the Court Executor JUDr. Tomas Vrana, Executor’s office at Prerov on 4 November 2011. Subsequently the Executor’s office filed a petition to the District Court of Prague 1 to decide on the enforcement.[12]

[10]Mr Josef Hlavicka, the Czech lawyer acting for the second to fifth plaintiffs, has provided evidence to both this Court and the Federal Court of Australia on several occasions since 2006 in connection with the suite of litigation conducted between the parties. A number of earlier affidavits sworn by him and filed in other proceedings, including the bankruptcy proceedings in the Federal Court, have been produced as exhibits to other affidavits filed in this proceeding by or on behalf of the parties.

[11]The affidavit of Mr Hlavicka sworn on 9 November 2012 appears as part of ‘Ex JGJ-2’ to the affidavit of Mr Jonathan Joseph sworn on 16 December 2014.

[12]Affidavit of Mr Hlavicka sworn on 9 November 2012, at [4(i)].

Mr Hlavicka describes the second petition proceeding, No 68C 139/2011, as a petition to contest the effectiveness of ’donation agreements’ made between Mr J E Talacko and his sons, whereby he transferred to them by way of gift all of his interest in certain properties in the Czech Republic and elsewhere that were in issue in the equitable compensation proceedings then pending before Kyrou J.[13] Mr Hlavicka says, that this petition, if successful, would enable the second to fifth plaintiffs to claim ‘their enforceable rights’ against David and Paul, being ‘the persons to whom Jan Talacko transferred a property by way of a gift with the intention to curtail the creditor’s (Clients) claim’ and that ‘[i]n this way, it is possible to contest [Mr J E Talacko’s] legal acts made during the last three years.’[14]
[13]In the Report to Creditors dated 16 January 2012, the trustee in bankruptcy notes that the ‘new’ Statement of Affairs of the bankrupt ‘provided on 23 December 2011, albeit signed on 16 March 2010’… discloses the disposal of several real property assets in the Czech Republic and Slovakia’ made within the last 5 years. The Report states that the following properties are listed in the Statement of Affairs as having been transferred but for which no consideration is disclosed:
·Hastalska 12, Prague, Czech Republic, being plot number 823, Prague 1
·Hastalska 15, Prague, Czech Republic, being plot number 860, Prague 1
·Rybna 29, Prague, Czech Republic, being plot number 832, Prague 1
·Ramova 8, Prague, Czech Republic, being plot number 821, Prague 1
·Melantrichova 11, Prague, Czech Republic, being plot number 425, Prague 1
·Kollarova Street, Holesovice, Czech Republic, being plots 309/1, 308/2 and 310
·Kbley, Czech Republic, being land plot no 1964/2 and 1965/4 no 212
·Repy, Czech Republic, being land located at Repy, Prague, Czech Republic
These real property assets are described in the Report to Creditors as having a value exceeding AUD$23.9M.
[14]Affidavit of Mr Hlavicka sworn on 9 November 2012, at [4(ii)].

Sequestration order made on 7 November 2011 against the estate of Mr J E Talacko

On 7 November 2011, several days after the petition proceedings were filed in the Czech Republic, Mr J E Talacko was made bankrupt. The Federal Court of Australia (North J) made a sequestration order against his estate upon application made by the second to fifth plaintiffs, Mr J E Talacko having failed to pay the judgment debt and other sums due to them. (It appears that initially, application was made for the appointment of an interim or temporary trustee, and orders were made, but they were later annulled.[15])
[15]See Transcript 11/05/15, at 17 (lines 24-28, Mr Guss). The history of the earlier proceedings is set out in the case stated in Talacko v Talacko ((2010) 268 ALR 266, at [4] (per Gray, Mansfield and Mc Kerracher JJ). In the Report to Creditors dated 16 January 2012, the trustee in bankruptcy records the history of the bankruptcy as including the appointment in August 2010 of the official trustee as interim trustee under s 50 of the Bankruptcy Act 1966 (Cth). See also the Schedule to the Order made by North J on 7 November 2011.

In the present proceeding, the applicants contend that once the sequestration order was made by the Federal Court, the provisions of the Bankruptcy Act 1966 (Cth) were enlivened and operated to affect the ability of the second to fifth plaintiffs, as judgment creditors, to enforce the judgments and orders made in the 1998 proceeding against the bankrupt estate of Mr J E Talacko.

The second to fifth plaintiffs dispute that position, and as will be seen below, they rely upon leave granted by North J in the bankruptcy proceedings on 10 December 2012 ‘nunc pro tunc from 7 November 2011’ as permitting them to continue to take further steps in the petition proceedings in the Czech Republic.

The first certificate issued by the Prothonotary dated 4 July 2012

At the request of the second, third and fourth plaintiffs in the 1998 proceeding,[16] the Prothonotary issued a document entitled ‘Certificate of Finality of Judgments and Orders’ dated 4 July 2012 (the ‘first certificate’). The first certificate was issued by the Prothonotary purportedly pursuant to the power conferred by Chapter II, Order 11 of the Supreme Court (Miscellaneous Civil Proceedings) Rules 2008 (Vic) (the ‘Miscellaneous Civil Proceedings Rules’). Order 11 provides the machinery provisions that apply in this Court for the registration of judgments under the Foreign Judgments Act 1991 (Cth). Rules 11.10 and 11.11 set out the procedure that applies where a judgment creditor wishes to enforce in a foreign country a judgment that has been given by the Supreme Court of Victoria and seeks the issue of a certificate under s 15 of the Foreign Judgments Act 1991 (Cth) in order to do so.
[16]Namely, Alexandra Bennett, Martin Talacko and Rowena Talacko.

Section 15 provides:

Issue of certificates of judgments obtained in Australian courts
(1)Subject to this section, where an application is duly made by a judgment creditor who wishes to enforce in a country a judgment that has been given in an Australian court, the Registrar of the court must issue to the judgment creditor:
(a)a certified copy of the judgment; and
(b)a certificate with respect to the judgment containing such particulars including:
(i)the causes of action to which the judgment relates; and
(ii)the rate of interest (if any) payable on any amount payable under the judgment;
as are prescribed by the regulations or by Rules of Court.[17]

(2)An application may not be made until the expiration of any stay of enforcement of the judgment in question.
(3)Nothing in subsection (1) prevents a fee being imposed in respect of the issue of the documents referred to in that subsection.

[17]Section 17(1), deals with ‘Rules of Court’ and relevantly provides that the power to make rules “extends to making any rules, not inconsistent with this Act or any regulations made under this Act, prescribing all matters necessary or convenient to be prescribed for carrying out or giving effect to this Act, including . . . (b) prescribing the matters to be proved on an application for the registration of a judgment and for regulating the mode of proving those matters”.

Section 3 provides that for the purposes of the Act, the expression ‘Registrar’, in relation to a court, means ‘the person who holds, in relation to that court, the office of, or the office equivalent to the office of, Registrar or Clerk.’ Accordingly, in the context of the Supreme Court of Victoria, the Prothonotary is a ‘Registrar’ for the purposes of the Act.

Rule 11.10 requires that an application under s 15(1) be made in the proceeding in which the judgment was obtained, here relevantly the 1998 proceeding. Such an application is required to be made by the judgment creditor filing a draft of the certificate to be given by the Prothonotary under r 11.11(c),[18] together with an affidavit deposing to such information as will enable the certificate to be granted: r 11.10(3). It is not in dispute that the application made to the Prothonotary by the second to fifth plaintiffs in mid-2012 did not follow the procedure set out in rr 11.10-11.11. The process by which the first certificate was sought and prepared is described by Mr Stephen Howells of counsel in an affidavit sworn by him dated 2 June 2014, which was notarised for use in the petition proceeding in the Czech Republic.[19] Therein Mr Howells states:

I sought a Certificate of Finality on behalf of my clients. I was asked by the Prothonotary to provide a draft to him of the terms of the Certificate that the Plaintiffs sought from him. [The Prothonotary] and his staff carefully considered the draft, made alterations to it and then executed it. It is common practice in all common law jurisdictions for Counsel to be asked by the Court to prepare drafts of the orders and certificates that are sought.[20]

[18]Rule 11.11(c) requires that if the application for a certified copy of a judgment is granted, the copy of the copy of the judgment issued shall —

(c)be accompanied by a certificate by the Prothonotary stating—

(i) that the proceeding is at an end except for enforcement of the judgment;

(ii) the claim or claims in respect of which the judgment was given;

(iii) the grounds upon which the judgment was based;

(iv) the rate at which the judgment carries interest;

(v) such other matters as the Prothonotary considers necessary or desirable.

[19]Mr Howells’ affidavit appears as exhibit’ JGJ-6’ to the affidavit of Mr Jonathan Joseph sworn on 16 December 2014.

[20]Ibid, at [43].

In an affidavit of Mr David Paul Phelan, the solicitor for the second to fifth plaintiffs, sworn on 22 December 2014 and filed in this proceeding, Mr Phelan summarises the events that led to them seeking and obtaining the first certificate and using it in the Czech Republic. Mr Phelan deposes that in October 1998 Mr J E Talacko transferred his interest in the matrimonial property at 312 Glenferrie Road, Malvern to Mrs Talacko for no consideration, and in May 2009 he transferred by way of donation his interests in his overseas properties to his sons, David and Paul, with the result that he was effectively left without any assets. Accordingly, Mr Phelan says, it was ‘necessary to enforce the judgment and orders of Justice Kyrou against the properties in Europe’ and on 4 November 2011, an ‘execution petition’ No 49 EXE 2107/2011-73 was lodged in the Czech Republic on behalf of the second to fifth plaintiffs.

Relevantly for present purposes, the first certificate refers to the judgment of Kyrou J dated 24 November 2009 and the order as to costs and interest made by his Honour on 11 December 2009 as being ‘FINAL, BINDING AND ENFORCEABLE according to law’ by reason of certain stated facts, matters and circumstances, including the dismissal of Mr J E Talacko’s appeal to the Court of Appeal and his application made to the High Court of Australia for special leave to appeal. Further, it states that ‘the said Judgment and Order have now passed into final, binding and enforceable effect, and they are not subject or amenable to any further or other appeal, review, remedy or relief.’ Reference is then made in paragraphs 9 and 10 to the Bankruptcy Act 1966 (Cth) and the Income Tax Assessment Act 1936 (Cth) but the certificate states that neither of those Acts operates ‘to affect the finality or the binding and enforceable effect of the said Judgment and Order.’ [21]
[21] Paragraphs 9 and 10 of the first certificate state as follows:

The use made of the first certificate in the proceedings in the Czech Republic

In his affidavit sworn on 9 November 2012, Mr Hlavicka says that the first certificate issued by the Prothonotary has been filed on behalf of the second to fifth plaintiffs in the execution petition proceedings in the Czech Republic ‘to prove the finality and enforceability of the judgments.’[22] Further, he says the ‘Court also asked the plaintiffs to submit evidence proving that the Australian judgment might be recognized in the Czech Republic’ and in September 2012 the Ministry of Justice of the Czech Republic sent to the Court a letter from the Attorney-General for Australia on the issue of recognition and enforcement of foreign judgments in Australia.[23]
[22]Affidavit of Mr Hlavicka sworn on 9 November 2012, at [7].
[23]Ibid, at [8]. The letter from the Attorney-General is not reproduced in the materials before the Court on the hearing of the current applications.

Mr Hlavicka says that on 18 October 2012 he received the decision of the Appellate Court of the District of Prague 1 approving the enforcement of the specified judgments of the Supreme Court and thus, ‘the decision approving the enforcement entered into legal force.’[24] Mr Hlavicka also mentions that Mr J E Talacko commenced an appeal from a decision made in petition proceeding No 49 EXE 2107/2011-73, which is presently before the Supreme Court of the Czech Republic, being proceeding No 30 Cdo 3753/2012.

The gist of the rival arguments advanced in the petition proceedings in the Czech Republic about the effect of Mr Talacko’s Australian bankruptcy

[24]Affidavit of Mr Hlavicka sworn on 9 November 2012, at [7].

In his affidavit sworn on 9 November 2012 Mr Hlavicka also summarises the gist of the arguments advanced by Mr J E Talacko in the petition proceedings in the Czech Republic, and his response. He says that Mr J E Talacko had indicated that he intended to object to both the enforcement and donation petition proceedings on the basis of his bankruptcy, contending first, that evaluation of the issue of enforceability of a foreign judgment is to be carried out by the state where the decision was issued, and secondly, that by reason of s 58(3) of the Bankruptcy Act1966 (Cth) it is not possible for a creditor to enforce any remedy against the person or property of the bankrupt in respect of a provable debt.[25]
[25]Ibid, at [10].

Mr Hlavicka’s response to those arguments is to the effect that ‘the [Australian] Bankruptcy order does not negatively affect either the finality or the enforceability of the Australian judgments in the Czech Republic’ because ‘[t]he Bankruptcy Act 1966 operates directly upon a bankrupt who is present in Australia and directly only upon assets located in Australia.’[26] Further, he explains that as the transfer of the Czech properties from Mr Talacko to his sons took place on 2 May 2009, when the application for registration of the transfer to the sons was filed, the statutory period of three years for contesting the transfer has passed and so the Australian Trustee in Bankruptcy would be time-barred if he sought to commence a similar proceeding contesting the transfers of the properties to the sons. Further, Mr Hlavicka says, in any event, it is ‘debatable whether the Australian Trustee in Bankruptcy may act on the territory of the Czech Republic in its capacity as bankruptcy trustee (i.e., as a special body, not as a natural person).’[27] Mr Hlavicka summarises the position, stating that in his opinion, ‘currently there is no viable way for the Australian bankruptcy trustee to contest [Mr J E Talacko’s] donation of properties to his sons before Czech courts.’[28]
[26]Ibid.
[27]Ibid, at [12].
[28]Ibid.

In an affidavit sworn by Mr Phelan, the solicitor for the second to fifth plaintiffs, on 22 December 2014 for the purposes of the current applications, Mr Phelan refers to the opinion expressed by Mr Hlavicka to the effect that an Australian trustee in bankruptcy would not have the powers of a Czech bankruptcy trustee because such powers are vested in trustees appointed by the Czech courts, and then expresses his own opinion:

17.His [Mr Hlavicka’s] conclusion is consistent with the conclusion that I have reached as to the status of the Bankruptcy Act in the Czech Republic based on reports from my clients as to the advice they have received about Czech law. I have concluded that the Bankruptcy Act is not recognised by the Czech Courts and that [Mr Talacko’s] bankruptcy can have no impact on proceedings in the Czech Republic. I am reinforced in that conclusion from the following finding which commences at the foot of page 4 of the decision of the Municipal Court of Appeal for the City of Prague made on 4 October 2012, as follows:
It can be agreed with the authorised parties that the assets of the obligated party in the Czech Republic cannot be the subject matter of insolvency proceedings held in Australia in the absence of an international treaty, and therefore, launching insolvency proceedings cannot have any relevant impact on the distrainment proceedings in the Czech Republic.

I note that my clients are recorded as being the “authorised parties” at page 1 of the decision and that [Mr Talacko] is the obligated party. …
18.The Kyrou judgment has been recognised for enforcement by the Municipal Court of Appeal for the City of Prague … I am informed by my clients that the decision of the Municipal Court of Appeal for the City of Prague made on 4 October 2012 is the subject of an appeal by [Mr Talacko] to the Supreme Court of the Czech Republic and that no decision has been delivered by that Court. …
…
22.The Second to Fifth Plaintiffs are not in a position to enforce the Kyrou judgment and this will remain the case until it is recognised in the Czech Republic and all appeals have been finalised. The question of recognition is before the Supreme Court of the Czech Republic. In the circumstances, the Second to Fifth Plaintiffs will [sic. not] take any step after the date hereof to enforce the Kyrou judgment unless the step has been specifically authorised by an order of the Federal Court under section 58(3) of the Bankruptcy Act.[29]

[29]Ibid, at [17], [18] and [22] (emphasis added).

In an affidavit of Ms Lucie Dolanska Banyaiova, who was the legal representative for Mr J E Talacko in the proceedings in the Czech Republic, sworn on 16 December 2014 and filed in support of the present application made by Mrs Talacko, Ms Banyaiova deposes as to the key steps which have been taken in those proceedings since the first certificate was issued by the Prothonotary on 4 July 2012. In summary, Ms Banyaiova says as follows:

(a) On 16 July 2012, the second to fifth plaintiffs filed a motion to the Municipal Court in Prague in proceedings file No. 64 Co 142/2012, being the appellate court reviewing the correctness of the enforcement order issued on 3 January 2012 by the District Court in Prague 1 under No. 49 EXE 2107/2011-73, responding to the Court’s request of 13 June 2012 that they provide evidence as to the finality and enforceability of the orders made by the Supreme Court of Victoria. In their motion to the Municipal Court, the second to fifth plaintiffs submitted that the Prothonotary’s first certificate ‘clearly confirms the finality and enforceability of the orders of the Supreme Court of Victoria in Melbourne the enforcement of which is sought.’[30]
[30]Affidavit of Ms Lucie Dolanska Banyaiova sworn on 16 December 2014, at [5].

(b) By resolution dated 4 October 2012, the Municipal Court in Prague confirmed the correctness of the enforcement order issued by the District Court in Prague 1 under No. 49 EXE 2107/2011-73 and confirmed the enforcement of the orders of the Supreme Court of Victoria. In its reasoning, the court specifically referred to the Prothonotary’s first certificate ‘stating that it follows from this Prothonotary’s Certificate that the [second to fifth plaintiffs] duly certified and proved the finality and enforceability of the said orders.’[31]
[31]Ibid, at [5].

(c) Mr J E Talacko filed an extraordinary appeal to the Supreme Court of the Czech Republic on 6 November 2012, requesting the Supreme Court to cancel the ordered enforcement of the orders of the Supreme Court of Victoria. The arguments advanced on behalf of Mr Talacko were to the effect that the orders of the Supreme Court of Victoria are not enforceable due to bankruptcy proceedings against him in the Federal Court of Australia. The Supreme Court of the Czech Republic has not rendered its decision as yet.[32]
[32]Ibid.

(d) On 2 November 2012, Mr Talacko filed a separate plea to the District Court of Prague 1 seeking to stay the enforcement proceedings relating to the orders of the Supreme Court of Victoria. Once again, one of the key issues advanced by him was that the orders of the Supreme Court of Victoria are not enforceable due to the bankruptcy proceedings against Mr Talacko in the Federal Court of Australia. The District Court of Prague has not made any determination on the merits of this plea as yet.[33]
[33]Ibid.

(e) Since the Municipal Court in Prague confirmed the enforcement of the orders of the Supreme Court of Victoria, the bailiff has issued several execution orders for payment of the due enforced sums by way of sale of property of Mr Talacko. According to Ms Banyaiova:

Specifically, the bailiff ordered the forced sale of real estate of Jan Emil Talacko located in Stredocesky kraj (mid-Bohemian region) district Benesov, town of Porici nad Sazavou, two plots of land one No. 1524/2 of the area of 1513 m² and the other No. 1524/5 of the square area 16 m². The forced sale of this land has not occurred so far. In addition, the bailiff confiscated in November 2012 the sum of approx. CZK 295,000.00 (approx. AUD 16,732.00) from the account of Jan Emil Talacko.[34]

[34]Ibid.

Ms Banyaiova deposes that because the feature of enforceability is one of the ‘key and fundamental prerequisites for enforcement of any judicial decisions in the Czech Republic’ there are, in her opinion:

reasonable grounds for concluding that, under Czech law, that the Municipal Court in Prague could have denied the enforcement of the orders issued by the Supreme Court of Victoria in Melbourne and the above enforcement steps would not have been possible if the Prothonotary’s Certificate did not refer to the order of Justice Kyrou referred to in paragraphs 7, 8 and 9 therein as being “final, binding and enforceable”.[35]

[35]Ibid, at [6] (emphasis in original text).

Further, she says:

In my professional opinion, there are reasonable grounds for concluding that, under Czech law, unless the Prothonotary’s Certificate is set aside or is varied to remove the references in paragraphs 7, 8 and 9 therein to Justice Kyrou’s order being ”enforceable”, further steps will be taken by the bailiff in the Czech Republic by way of enforcement of Justice Kyrou’s order.[36]

[36]Ibid, at [7].

In a supplementary affidavit sworn on 18 December 2014, following the filing of Mrs Talacko’s application in this proceeding, Ms Banyaiova expresses her professional opinion that if the Prothonotary’s first certificate is to be set aside or amended, this should happen as soon as possible, because otherwise the bailiff will continue taking enforcement action against the assets falling into Mr Talacko’s estate, including forcing a sale of the Bohemian real estate.[37]
[37]Supplementary affidavit of Ms Banyaiova sworn on 18 December 2014.

In Mr Phelan’s affidavit sworn on 22 December 2014, he responded to and addressed Ms Banyaiova’s concern. Mr Phelan stated that his clients had informed him that it was not expected that the bailiff would take any enforcement action until after Mr J E Talacko’s appeal to the Supreme Court of the Czech Republic had concluded. Further, he said that he had written to their Czech lawyers requesting that they inform the bailiff that his clients ‘do not wish to have any enforcement steps taken until the outcome of the Supreme Court appeal is known and further leave is obtained under section 58 of the Bankruptcy Act (Cth).’[38]
[38]Affidavit of Mr Phelan, sworn 22 December 2014, at [30].

Orders made by North J on 10 December 2012 granting leave to take further steps

On 10 December 2012, on the application of the second to fifth plaintiffs and with the consent of Mr J E Talacko’s trustee in bankruptcy, Justice North of the Federal Court of Australia made a number of orders concerning the taking of further steps in relation to the bankrupt estate of Mr J E Talacko. Among other things, the orders made in the bankruptcy proceedings specifically addressed the continued pursuit of the execution petition proceedings against Mr Talacko in the Czech Republic. In paragraph 3 of his orders, his Honour granted leave, nunc pro tunc from 7 November 2011, permitting the plaintiffs to continue to take further steps but ‘provided that no step be taken to enforce any judgment against [Mr J E Talacko] without the prior leave of the Federal Court of Australia in its bankruptcy jurisdiction.’ The transcript of the hearing on that day records counsel for the second to fifth plaintiffs, Mr Howells, informing the Court about the substance of the relief sought in proposed order 3 concerning the overseas properties.[39] With the consent of counsel for the trustee in bankruptcy, Mr Bornstein, orders were made accordingly by his Honour.[40]
[39]Transcript of Federal Court proceedings before North J, 10/12/2012, at pp 10-11.
[40]Order 3 was expressed in the following terms:
Leave be granted nunc pro tunc from 7 November 2011 to the Applicants pursuant to s 58(3) of the Bankruptcy Act 1966 (Cth) to continue to take further steps, including defending or pursuing any appeal, up to judgment against the Respondent [Mr J E Talacko] in the Petition proceedings that have been lodged in their names in the District Court of Prague on 4 November 2011 and which have been assigned numbers 49 EXE 2107/2011-73 and 48 EXE 522/2012-75 provided that no step be taken to enforce any judgment against the Respondent without the prior leave of the Federal Court of Australia in its bankruptcy jurisdiction.

Challenge to the validity of the first certificate

It is against this background that an application was issued on behalf of Mr J E Talacko in the 1998 proceeding seeking to challenge the validity of the first certificate. The solicitor who was acting for Mr J E Talacko prior to his death, Mr Joseph Guss,[41] says that the first certificate only came to light in the course of the conduct of proceeding No 49 EXE 2107/2011-73 and associated proceedings in the Czech Republic on or about March 2014. The second to fifth plaintiffs dispute this timing, but Mr Guss says the certificate first came to his attention on 26 March 2014 when a copy of it (but without the attachments referred to in paragraph 6 thereof) was provided to him by the Czech lawyers acting for Mr J E Talacko.
[41]Mr Guss now acts as the solicitor for one of the applicants, Mr Findlay.

On 30 October 2014, Mr Guss in his (then) capacity as solicitor for Mr J E Talacko issued a summons directed to the Prothonotary and the second to fifth plaintiffs seeking orders in relation to the first certificate, pursuant to Rule 11.12 of the Miscellaneous Civil Proceedings Rules and s 15 of the Foreign Judgments Act 1991 (Cth). In effect, the summons sought to have the certificate declared invalid and an order that it be quashed, cancelled or set aside or alternatively that the Prothonotary be ordered to amend it to comply with the law. The application was listed for hearing on 6 November 2014 but in the meantime, on 3 November 2014, Mr J E Talacko passed away.

It appears that Mr Talacko died intestate, having revoked all earlier wills.

On 18 November 2014, McDonald J, before whom the trial of the 2009 proceeding was shortly to take place, made orders on the return of Mr J E Talacko’s summons. His Honour adjourned the summons for hearing on 8 December 2014, in order that Mr Guss could inform his Honour’s Associate and the second to fifth plaintiffs if he had instructions to appear on behalf of any party to whom Mr J E Talacko’s interest in the 30 October 2014 summons had been assigned, transmitted or devolved.

At the adjourned hearing on 8 December 2014, McDonald J made orders adjourning the summons for further hearing on a date to be fixed. Later on 8 December 2014 a fresh summons was issued by Mr Findlay as applicant, directed to the Prothonotary and the second to fifth plaintiffs as respondents. The summons sought orders pursuant to r 16.03(1)(b) of the Supreme Court (General Civil Procedure) Rules 2005 (the ‘General Civil Procedure Rules’) that Mr Findlay be appointed to represent the estate of Mr J E Talacko, deceased, for the purpose of the proceeding commenced by Mr Talacko in respect of the first certificate; alternatively, pursuant to r 16.03(1)(b), that the Court may proceed in the absence of a person to represent the estate of the deceased.

An affidavit of Mr Guss, sworn on 8 December 2014 was filed in support of Mr Findlay’s application. Therein Mr Guss deposes as to the history of the personal and professional relationship between Mr Findlay and Mr J E Talacko, which dates back to their first meeting in 1964, including his role as solicitor for Mr Talacko in the 1998 proceedings between about 1993 and 2005 and as a consultant from late 2011, and the appointment of Mr Findlay as Mr Talacko’s attorney under an enduring power of attorney on 21 March 2012. His affidavit also exhibits a consent from Mr Findlay pursuant to r 16.03(1), consenting to his appointment as representative of the estate of Mr Talacko for the purpose of seeking orders in respect of the first certificate.

On 16 December 2014, a summons in similar form was issued on behalf of Mrs Judith Talacko, the widow of Mr J E Talacko. Mrs Talacko sought orders that she be appointed to represent the estate of her husband pursuant to r 16.03(1) and for the purpose of conducting an application for declarations that the Prothonotary exceeded his authority in issuing the first certificate and that the certificate is invalid and be set aside; alternatively for an order that the Prothonotary amend the certificate as the Court deems appropriate.

An affidavit of Mr Jonathan Guy Joseph, the solicitor for Mrs Talacko, sworn on 16 December 2014 was filed in support of her application. In his affidavit, Mr Joseph deposes as to Mrs Talacko’s concern that the statements made in the first certificate, to the effect that the orders made by Kyrou J are ‘FINAL, BINDING AND ENFORCEABLE according to law’, are misleading and ‘would mislead the Czech courts in the Czech proceedings into believing that the provisions of the Bankruptcy Act 1966 (Cth) do not affect the enforceability of the Kyrou orders.’[42] Further, Mr Joseph says he is instructed by Mrs Talacko, who presently resides in the Czech Republic, that the plaintiffs ‘are seeking to use the Prothonotary’s Certificate in the Czech proceedings to seek enforcement against Jan’.[43]
[42]Affidavit of Mr Joseph sworn on 16 December 2014, at [22]-[24].
[43]Ibid, at [25(a)].

The hearing of the applications before Daly AsJ

The applications filed in December 2014 by each of Mr Findlay and Mrs Talacko to be appointed as the sole personal representative of the estate of Mr J E Talacko pursuant to r 16.03 were heard by Daly AsJ on 22 December 2014. The question for her Honour to determine was whether she should appoint either of the applicants as the representative for the purpose of challenging the first certificate, and if so, which of them.

The second to fifth plaintiffs opposed the applications, primarily on the basis that the summonses and any challenge to the validity of the first certificate were incompetent. At the hearing before Daly AsJ, the second to fifth plaintiffs produced an amended notice of contention directed at each of the applicants wherein they contended that each application is incompetent because:

(a)it seeks the review of a decision made under a Commonwealth enactment being a decision to which the Administrative Decisions (Judicial Review) Act 1977 (Cth) applies and the jurisdiction of this Honourable Court is therefore denied by section 9 of that Act.
(b)neither Order 16 of Chapter 1 of the Supreme Court (General Civil Procedure) Rules nor Rule 16.03 have any application to the present matter.

The primary submissions of the second to fifth plaintiffs were to the effect that the Court is functus officio in the 1998 proceeding and the summonses seek relief that could only be obtained under the ADJR Act or Order 56 of the General Civil Procedure Rules.[44] Aside from questioning the competency of the summonses, they also submitted that it would be inappropriate for her Honour to make an appointment under r 16.03, at least at this time. Her Honour summarised their submission as follows:

Under s 19 of the Administration and Probate Act 1958 (Vic), the property of the estate of Jan Talacko vests in the State Trustee, and the State Trustee ought to be notified of this application. Mr Findlay has absolutely no interest in this dispute, and his application ought to be dismissed. Mrs Talacko may have an interest, albeit uncertain at this stage, and her application to be appointed as a representative ought to be viewed in the light of the allegations of fraud and conspiracy made against her in the current proceeding that she has been involved in a fraud.[45] As such, Mrs Talacko’s application, if not dismissed for the substantive reasons advanced by the plaintiffs, ought to be stood over to be heard and determined by the trial judge in the current proceeding [i.e., the 2009 proceeding to be heard by McDonald J in March 2015] in order to assess the merits of her application in the light of any findings made about her conduct. Given the undertakings proffered by the plaintiffs to refrain from taking any enforcement action with respect to the Czech proceedings for the time being, there is no prejudice in having these matters held over to that time.[46]

[44]Rule 56.01(1) provides that:

Subject to any Act, the jurisdiction of the Court to grant any relief or remedy in the nature of certiorari, mandamus, prohibition or quo warranto shall be exercised only by way of judgment or order (including interlocutory order) and in a proceeding commenced in accordance with these Rules.

[45]See Talacko v Talacko [2014] VSC 238.

[46]See the Ruling of Daly AsJ delivered on 4 February 2015, at [18].

The applicants rejected the second to fifth plaintiffs’ submissions that the summonses were incompetent. They contended that the Court has an inherent jurisdiction to supervise the conduct of officers of the Court. Further, they argued the issuing of the certificate is a ‘ministerial act’ of the Prothonotary, relying upon the well-known passage in the High Court’s judgment in Griffith v Tang,[47] and thus is not a decision within the meaning of the ADJR Act, or otherwise amenable to judicial review. The applicants also maintained that the Court is not functus officio because the first certificate was issued by the Prothonotary in the 1998 proceeding, as required by the Rules.
[47](2005) 221 CLR 99, at 130-131, [89].

On 4 February 2015, Daly AsJ delivered her ruling, dismissing both summonses and made orders accordingly. Her Honour formed the view that the applications should be dismissed on the grounds that each of the summonses is incompetent. Her Honour found that:

Even if the Court is not functus officio in the 1998 proceedings, any application to challenge the validity of the Certificate ought to be made either to the Federal Court under the ADJR Act, or under O 56 of the Rules. I accept the submissions of senior counsel for the plaintiffs that even the more truncated relief proposed to be sought by Mrs Talacko, that the Certificate be amended, must amount to relief in the form of certiorari or mandamus, and as such, if sought in this Court, must be sought by a proceeding brought under O 56 of the Rules. After all, given the provisions of the Foreign Judgments Act, I doubt that the power rests with a Judge of this Court to amend the Certificate: rather, it is more likely that the Court would exercise its supervisory jurisdiction if it was thought fit to do so by directing that the Prothonotary amend the Certificate: that is, an order in the nature of mandamus.[48]

[48]See the Ruling of Daly AsJ delivered on 4 February 2015, at [26].

Her Honour also said that while it was not strictly necessary for her to make a finding that any challenge to the validity of the certificate must be brought under the ADJR Act, or alternatively must be brought in this Court, or could be launched in either venue, she thought it ‘strongly arguable that the decision to issue the Certificate, and in particular the decision to include the statements made which are complained of by the applicants, is a decision within the meaning of s 3 of the ADJR Act.’[49] In so doing, she rejected the applicants’ contention that in issuing the certificate what the Prothonotary did was ‘ministerial’ in nature. Rather, she formed the view that in issuing the certificate in the form in which he did, ‘the Prothonotary was required to exercise some degree of discretion, judgment or skill.’[50]
[49]Ibid, at [30].
[50]Ibid, at [33].

Appeals lodged against Daly AsJ’s Ruling

Notices of Appeal against her Honour’s ruling and orders were filed by Mrs Talacko on 18 February 2015, and by Mr Findlay on 25 February 2015, following which an appeal book common to both appeals was prepared and filed. While those appeals were pending, the solicitors for the second to fifth plaintiffs made contact with the Prothonotary, apparently without the knowledge of the solicitors for Mr Findlay or Mrs Talacko, and arranged for the issue of an amended certificate.

The Prothonotary’s second certificate dated 23 February 2015

By letter dated 1 April 2015, Mr Phelan wrote to the solicitors for each of the parties enclosing ‘copy certificate of finality of judgments and orders dated 23 February 2015’.[51] The document enclosed with the letter was entitled ‘Amended Certificate of Finality of Judgment and Orders’, and was signed by the Prothonotary and sealed with the seal of the Court dated 23 February 2015 (the ‘second certificate’). The heading of the second certificate states that ‘[t]his certificate is an amendment and replaces in its entirety’ the first certificate issued by the Prothonotary.[52]
[51]Exhibit ‘JGJ-7’ to the affidavit of Mr Joseph sworn on 5 May 2015.
[52]The second to fifth plaintiffs contend that the Prothonotary’s power to issue the second certificate derives from the power s 15 of the Foreign Judgments Act1991 (Cth) and is supported by s 33(3) of the Acts Interpretation Act 1901 (Cth), which provides:
Where an Act confers a power to make, grant or issue any instrument of a legislative or administrative character (including rules, regulations or by-laws) the power shall be construed as including a power exercisable in the like manner and subject to the like conditions (if any) to repeal, rescind, revoke, amend, or vary any such instrument.

The relevant amendments were not marked-up and the accompanying letter did not disclose the substance of them or describe them in any way. Accordingly, Mr Joseph arranged for a marked-up version to be prepared which shows the changes made to the Prothonotary’s Certificate. In summary, the mark-up shows that, for the most part, the amendments so made remove the expression ‘enforceable’ where used throughout the certificate: so that the phrase stating that the judgments and orders ‘are final, binding and enforceable according to law’ now reads ‘are final, conclusive and binding’, and the orders of Kyrou J are now said to be ‘at an end except for enforcement of the said Judgment and Order and are final conclusive and binding’. Further, the reference in paragraph 9 of the first certificate to the operation of the Bankruptcy Act 1966 (Cth) and the Income Tax Assessment Act1936 (Cth) has been deleted. By way of insertion, the second certificate now makes reference to a further order made by Kyrou J on 16 September 2013 (being after the first certificate had issued).[53]
[53]By this order, Kyrou fixed the costs to be paid pursuant to the judgment dated 11 December 2009 in the sum of $ 2,680,239.00.

Mr Joseph says that he was not informed by the solicitor for the second to fifth plaintiffs, and was not otherwise aware, that the amended (second) Prothonotary’s Certificate was being sought or had been applied for or issued.[54] He says that at no time during the trial of the 2009 proceeding before McDonald J in March 2015 did the second to fifth plaintiffs or any other party mention the existence of the second certificate either formally to the Court or, as best he knows, informally between practitioners. Once he became aware that the second certificate had been issued, Mr Joseph arranged for a legal trainee to search the most recent (hard copy) Court file for the 1998 proceeding and obtain copies of all documents pertaining to its issue. Relevantly, that search revealed only a letter from the solicitor for the second to fifth plaintiffs to the Prothonotary dated 6 February 2015, being shortly after Daly AsJ pronounced orders, enclosing a document entitled ‘draft proposed amended certificate’ together with the annexures marked ‘A’ to ‘K’ thereto.
[54]Affidavit of Mr Joseph sworn on 5 May 2015, at [14]-[15].

The letter from the solicitor for the second to fifth plaintiffs to the Prothonotary which accompanied the ‘draft proposed amended certificate’ commences by referring to the most recent order of Kyrou J, noting that interest on that judgment accrues at $771.03 per day, and says the second to fifth plaintiffs now seek ‘a replacement certificate that contains a reference to the latest judgment by Mr Justice Kyrou.’[55] It also refers to the recent challenges to the first certificate by Mr Findlay and Mrs Talacko, noting that ‘they have not resulted in any order affecting the Certificate as yet,’ and to the ruling made by Daly AsJ on 4 February 2015. The letter also records that the first certificate has been relied upon by the second to fifth plaintiffs in the Czech Republic, as follows:

The Certificate has been relied upon by our clients in the Czech Republic since 2012. Reliance on the Certificate has also been referred to in a decision (“Resolution”) of the Supreme Court of the Czech Republic dated 18 December 2014, which we received on 5 February 2015.
We can provide a copy of the Resolution if required. Consequently, it is important that there be certainty as far as the content of the Certificate is concerned.
While we do not make any admission about the criticisms that Mr Guss has made, we have formed the view that in order to ensure that no embarrassment is caused either in the Czech courts or in this Court, we should ask you to issue a replacement certificate that deals with the matters referred to above and also addresses Mr Guss’s criticisms to the extent necessary to discourage or pre-empt any further proceedings. We note also that at the hearing before Associate Justice Daly on 22 December 2014 Senior Counsel for Judith Talacko informed the Court that his client “would only be seeking that the Court amend the Certificate …”, and we refer you to paragraph 17 of Her Honour’s Ruling.

Accordingly, we enclose a draft proposed replacement certificate and ask that you let us know through your staff what course of action you propose.
Finally, we note also that no other party has a present entitlement to be heard on the question of making a certificate in these circumstances and that under Chapter II Order 11.11(e) of the Rules you have power to include in the certificate any matter you consider necessary or desirable. There is good reason for this given that such certificates might be intended for use in proceedings abroad and that some explanation of circumstances may be necessary.[56]

[55]See exhibit ‘JGJ-9’ to the affidavit of Mr Joseph sworn on 5 May 2015.

[56]Ibid.

Following notification of the issue of the second certificate, several letters and emails passed between the parties and the Victorian Government Solicitor’s Office (‘VGSO’), as solicitor for the Prothonotary, in relation to the pending appeals and the second certificate. The VGSO informed all parties and the Court that in the appeals, as in the proceeding, the Prothonotary does not intend to take an active role and will abide by the decision of the Court.[57]

The issue of the second certificate effectively renders the appeals futile

[57]See exhibit ‘JGJ-10’ to the affidavit of Mr Joseph sworn on 5 May 2015.

On Friday 24 April 2015, the Court sent an email to the solicitors for the parties, outlining a timetable for the provision of their respective written outlines of submissions and requesting that the parties consult and agree upon a common book of authorities and other materials to be filed by 12 noon on Thursday 7 May 2015, in advance of the hearing of the appeals on Monday 11 May 2015.[58]
[58]The appeals were initially listed for hearing on 6 May 2015. However, at the request of the second to fifth plaintiffs, the date was altered by consent of the other parties so as to accommodate the unavailability of their counsel, Mr Howells.

By letter dated 4 May 2015 the solicitor for the second to fifth plaintiffs wrote to the solicitors for the respective applicants to inform them that because ‘Judith Talacko has entirely recast the basis upon which she opposes and challenges the making of the Certificates dated 4 July 2012 and 23 February 2015’ they are seeking advice from senior counsel and will likely need to file a further affidavit from the Czech Republic to respond to this new case. In that event, they said, ‘there is no prospect that these steps will be completed in sufficient time to permit the appeal to be heard on 11 May 2015.’[59] Each of the solicitors for the respective applicants responded to the effect that they opposed any adjournment of the hearing of the appeals, primarily on the basis that it was not apparent why any further affidavit from the Czech Republic would be relevant. By letter dated 5 May 2015, the solicitor for the second to fifth plaintiffs wrote to the Court, copied to the applicants, and requested that the matter be listed for mention in order that they might make an application for the adjournment of the hearing of the appeals to a date on or after 15 June 2015. The adjournment was said to be necessary ‘to supplement the material in the Appeal Book in order to respond to the claim that the Prothonotary could not issue the Certificates.’ Further the solicitor for the second to fifth plaintiffs stated that a further affidavit needs to be obtained from their Czech lawyer, Mr Josef Hlavicka, in order to respond to the new case advanced by Mrs Talacko, and ‘[i]n particular the affidavit will address how the Certificate dated 4 July 2012 has been used in the Czech Republic.’[60]
[59]See exhibit ‘JGJ-11’ to the affidavit of Mr Joseph sworn on 5 May 2015.
[60]See exhibit ‘JGJ-15’ to the affidavit of Mr Joseph sworn on 5 May 2015.

The matter was listed for mention on 7 May 2015 so as to facilitate the second to fifth plaintiffs making their foreshadowed application for an adjournment of the hearing of the appeals in order to permit them to put on further affidavit evidence from Mr Hlavicka. At the mention hearing, Dr Michelle Sharpe of counsel appeared for the second to fifth plaintiffs. When the Court enquired as to what was the substance of the further evidence they proposed to adduce from Mr Hlavicka, Dr Sharpe said:

Well Your Honour I don't think that I have instructions to put anything further that what I have already put,[61] other than that it would contain more detailed evidence of the proceedings currently on foot in the Czech Republic. The nature of those proceedings, that is that in essence they're not enforcement proceedings per say [sic] against the defendant of the judgment, and how that certificate, which has now been replaced, has been used. On my instructions Your Honour I don't think I can submit anything more than that.[62]

[61]The Second to Fifth Plaintiffs’ Outline of Submissions dated 6 May 2015 noted (at [12]) that they ‘will be seeking an adjournment of the Appeal hearing to permit them to adduce affidavit evidence of the Donation proceeding and the Registration proceeding.’

[62]Transcript, 07/05/15, at pp 9 (line 19) – 10 (line 23).

At the mention hearing, the submissions made by counsel for the second to fifth plaintiffs were to the effect that the second certificate ‘entirely replaced’ the earlier certificate dated 4 July 2012, that was the subject of the decision made by Daly AsJ, such that the first certificate effectively no longer has any operative force or effect.[63] The applicants accepted that their appeals were rendered futile because there was no longer in existence anything for which the representative orders were sought. However, they said there was now something else in existence, namely the second certificate, and they wished to challenge its contents and validity on the grounds set out in their respective written submissions.
[63]See Transcript 07/05/15, at p 9 (line 5).

Each of the applicants opposed the grant of any adjournment. In essence, they contended that the whole process for the issue of the second certificate was defective because the effect of ss 58 and 82 of the Bankruptcy Act 1966 (Cth) was that there was no judgment extant at the time of issue, the judgment having been converted into a right to prove in the bankruptcy, such that the second to fifth plaintiffs were no longer in the position postulated by s 15 of the Foreign Judgments Act 1991 (Cth). Secondly, they sought special leave under r 77.03(2) of the Supreme Court (General Civil Procedure) Rules[64] to permit them, as representative parties, to proceed under fresh summonses to attack the validity and content of the second certificate before a Judge rather than having to make application in the first instance to an Associate Justice.[65]
[64]Under r 77.03(2), if special leave is granted, the jurisdiction and powers of an Associate Justice may be exercised by a Judge of the Court.
[65]See Maher v Wallace Dairy Co Ltd [1984] VR 129, at 133 and Body Corporate Strata Plan No. 4166 v Stirling Properties Ltd (No. 2) [1984] VR 307.

At the conclusion of argument, the Court indicated that it did not propose to grant any adjournment. The Court was satisfied, however, that notwithstanding that the appeal had effectively been rendered futile, there nevertheless remained a real issue in dispute between the parties concerning the validity and content of the certificates. In those circumstances, the Court indicated that it was disposed to grant special leave and to adjourn the mention hearing to the next day in order that the parties and their legal advisers could consult with a view to devising a procedure that would be capable of being regarded under the Civil Procedure Act2010 (Vic) as an efficient and fair means for the Court to proceed to hear and determine the essential issue in dispute between them.

The process (as agreed between the parties) to be adopted in respect of the appeals

The parties responded by preparing and providing a joint memorandum to the Court setting out the process (as agreed between them) to be adopted in respect of the appeals brought by Mr Findlay and Mrs Talacko in the proceeding.[66] The agreed process was as follows:
[66]See email from Mr Masters, junior counsel for Mrs Talacko, to the Court (and copied to all parties) dated 8 May 2015, enclosing the joint memorandum. At the mention hearing on 8 May 2015, Dr Sharpe confirmed that she consented to the making of the fresh applications in the form proposed.

1.At the hearing listed for 10.30 am on 8 May 2015, Mr Findlay and Mrs Talacko file fresh summonses in the attached form (the Summonses).
2.The Summonses be made returnable at 10.30 am on 11 May 2015.
3.At the hearing on 11 May 2015, the Court hear the applications brought by the Summonses.
4.At the hearing on 11 May 2015, the parties make submissions in relation to both the procedural aspects of the applications (that is, paragraphs 1 and 2 of the Summonses) and the substantive aspects of the applications (that is, paragraphs 3 to 10 of the Summonses). This will obviate the need for a further hearing concerning the substantive aspects in the event that either Mr Findlay or Mrs Talacko is appointed to represent the estate of Jan Emil Talacko as sought in paragraph 2 of the Summonses.
5.The Court determine the procedural aspects of the applications (that is, paragraph 1 of the Summonses and, if applicable, paragraph 2 of the Summonses) on the basis of the submissions to be made at the hearing on 11 May 2015.
6.In the event that either Mr Findlay or Mrs Talacko is appointed to represent the estate of Jan Emil Talacko as sought in paragraph 2 of the Summonses, the Court determine the substantive aspects of the relevant application (that is, paragraphs 3 to 10 of the relevant summons) on the basis of the submissions having been made at the hearing on 11 May 2015.

On 8 May 2015, orders were made dismissing the second to fifth plaintiffs’ application for an adjournment and providing for Mr Findlay and Mrs Talacko respectively to issue fresh procedural summonses directed to the Prothonotary and to the second to fifth plaintiffs, and for their applications to be heard on 11 May 2015.[67] The Court also fixed a timetable for the filing of any further submissions by the parties.
[67]A copy of these summonses was also to be provided to the first plaintiff, Dr Jan Talacko, who did not appear at the hearing on 8 May 2015.

The Orders of 8 May 2015 also recorded under ‘Other Matters’ that the second to fifth plaintiffs, by their counsel, gave a fresh undertaking to the Court, in similar terms to the undertaking given before Daly AsJ, that they would not take any further step, whether by themselves or by their servants or agents, to enforce the judgment of Kyrou J dated 11 December 2009 or otherwise seek to use or rely upon the Prothonotary’s first certificate dated 4 July 2012 or the second certificate dated 23 February 2015 until the determination of the summonses dated 8 May 2015 or further order.[68]
[68]The terms in which this undertaking was expressed were enlarged by consent on 22 September 2015, once the parties became aware of the existence of the third certificate.

The hearing of the fresh summonses dated 8 May 2015

The summonses issued on behalf of Mr Findlay and Mrs Talacko respectively dated 8 May 2015 sought substantive relief, in addition to the making of a ‘representative’ order for the purposes of making the application, as follows:

…
3.A declaration that the Certificate of Finality of Judgments and Orders dated 4 July 2012 (the First Certificate) has been revoked.
4.Further or alternatively, a declaration that the First Certificate is invalid.
5.A declaration that the Prothonotary of the Supreme Court of Victoria exceeded his authority in issuing the Amended Certificate of Finality of Judgments and Orders dated 23 February 2015 (the Second Certificate).
6.A declaration that the Second Certificate is invalid.
7.Further or alternatively, an order that the Second Certificate is set aside.
8.Further or alternatively, an order directing the Prothonotary to amend the Second Certificate in such manner as the Court deems appropriate.
…

At the commencement of the hearing on 11 May 2015, Mr Guss informed the Court that he had given notice of the hearing to State Trustees Limited, as the executor pro tem of Mr J E Talacko’s estate,[69] and also to the solicitors for the trustee in bankruptcy. The Court informed the parties that, having read the papers, the Court was satisfied that the matters raised for determination on the summonses are important matters concerning the powers of the Prothonotary to issue a certificate under s 15 of the Foreign Judgments Act 1991 (Cth); secondly, that the case is an appropriate one for a grant of special leave under r 77.03 to permit the applications to be heard by a Judge rather than an Associate Justice; and thirdly, that the procedure agreed between the parties is a fair and efficient one that will promote the stated objectives of the Civil Procedure Act2010 (Vic).[70] The Court also determined that the most sensible way forward was to hear argument on the substantive matter first and then proceed to determine the issue of representation, noting that this was the approach adopted by Tadgell J in Equity Trustees Executors & Agency Co Ltd v Busst.[71]

Did the Prothonotary have power under s 15 of the Foreign Judgments Act 1991 (Cth) to issue a certificate with respect to the judgment and orders made in the 1998 proceeding?

[69]Section 19 of the Administration and Probate Act 1958 (Vic) provides that the estate of an intestate shall vest in the State Trustees between death and grant of administration.

[70]See ss 8 and 9.

[71]Unreported, Supreme Court of Victoria, No 10559/91, Tadgell J, 2 November 1992, BC9200615.

The central question raised for determination on the fresh summonses is whether the Prothonotary’s power under s 15 of the Foreign Judgments Act 1991 (Cth) to issue a certificate with respect to the judgment and orders made in the 1998 proceeding was enlivened upon the making of the first and/or second request by second to fifth plaintiffs.

Each of Mrs Talacko and Mr Findlay challenge the exercise of the Prothonotary’s power and the validity of the certificates issued, relying principally on the scheme of the Bankruptcy Act 1966 (Cth) and its operation. Relevantly, for present purposes, they wish to contend that once a sequestration order was made by North J on 7 December 2011, s 58(3) of the Bankruptcy Act 1966 (Cth) operated to impose a stay of execution of the judgment debt for the purposes of s 15(2) of the Foreign Judgments Act1991 (Cth). That is, the applicants say that the words of s 58(3), prohibiting the enforcement of any remedy against ‘the person or the property of the bankrupt in respect of a provable debt’, have the effect of staying the enforcement of the judgments and orders in question and are relevantly to be regarded as a ‘stay of enforcement’ for the purposes of s 15(2).[72] They submit that the orders North J made on 10 December 2012 granting leave do not alter that position because the leave so granted was made expressly subject to the proviso that ‘no step be taken to enforce any judgment against [Mr J E Talacko] without the prior leave of the Federal Court in its bankruptcy jurisdiction.’ Accordingly, the applicants contend that the application made by the second to fifth plaintiffs for the issue of a certificate under s 15 was not ‘duly made by a judgment creditor’ who was capable of enforcing a judgment that had been given by an Australian court.
[72]Section 15(2) provides:
(2)An application may not be made until the expiration of any stay of enforcement of the judgment in question.

The second to fifth plaintiffs, on the other hand, rely upon the leave granted by North J permitting them to continue the petition proceedings in the Czech Republic. They contend that their application for the issue of the first certificate, and for the second certificate respectively was in each case ‘duly made by a judgment creditor’ because ‘leave had indeed been given by the Court pursuant to section 58(3) to take a fresh step in a proceeding’.[73]

Relevant provisions of the Bankruptcy Act 1966 (Cth)

[73]Second to Fifth Plaintiffs’ Further Outline of Submissions, dated 10 May 2015, at [5].

Several provisions of the Bankruptcy Act 1966 (Cth) are central to the contentions advanced by the applicants. For convenience, they are set out below:

Section 58(1) provides:

Subject to this Act, where a debtor becomes a bankrupt:
(a)the property of the bankrupt, not being after-acquired property, vests forthwith in the Official Trustee or, if at the time when the debtor becomes a bankrupt, a registered trustee becomes the trustee of the estate of the bankrupt by virtue of section 156A, in that registered trustee;
. . .

Section 5(1) defines ‘property’, ‘the property of the bankrupt’ and ‘provable debt’ as follows:
property means real or personal property of every description, whether situate in Australia or elsewhere, and includes any estate, interest or profit, whether present or future, vested or contingent, arising out of or incident to any such real or personal property.
the property of the bankrupt, in relation to a bankrupt, means:
(a) except in subsections 58(3) and (4):
(i)the property divisible among the bankrupt’s creditors; and
(ii)any rights and powers in relation to that property that would have been exercisable by the bankrupt if he or she had not become a bankrupt; and

(b)in subsections 58(3) and (4):
(i)the property, rights and powers referred to in paragraph (a) of this definition; and

(ii) any other property of the bankrupt.

provable debt means a debt or liability that is, under this Act, provable in bankruptcy.

Section 58(3) provides:
Except as provided by this Act, after a debtor has become bankrupt, it is not competent for a creditor:
(a)to enforce any remedy against the person or the property of the bankrupt in respect of a provable debt; or
(b)except with the leave of the Court and on such terms as the Court thinks fit, to commence any legal proceeding in respect of a provable debt or take any fresh step in such a proceeding.

Section 82(1) provides:
Subject to this Division, all debts and liabilities, present and future, certain or contingent, to which a bankrupt was subject all the date of the bankruptcy . . . are provable in his or her bankruptcy.

Section 83(1) provides:
Subject to this Division, a creditor who desires to prove a debt in a bankruptcy shall lodge, or cause to be lodged with the trustee a proof of debt in accordance with this section.

The applicants’ contentions regarding the construction and operation of s 58(3) of the Bankruptcy Act 1966 (Cth) take, as their starting point, the scheme of the Act and the modern system of bankruptcy law.

The scheme of the Bankruptcy Act 1966 (Cth)

In Storey v Lane,[74] Gibbs CJ observed that ‘[a]n essential feature of any modern system of bankruptcy law is that provision is made for the appropriation of the assets of the debtor and their equitable distribution amongst his creditors, and for the discharge of the debtor from future liability for his existing debts.’[75] Accordingly, his Honour said, the policy of the Bankruptcy Act 1966 (Cth) is ‘to assist in ensuring that the assets of the insolvent debtor are distributed in the interests of creditors generally, to prevent one creditor obtaining an undue advantage over the others, and to prevent the scheme of the Bankruptcy Act from being defeated.’[76]
[74](1981) 147 CLR 549.
[75]Ibid, at 556.
[76]Ibid, at 557.

Section 6(5) of the Cross-Vesting Act permits the court to direct a party to the proceeding to give a notice in accordance with subsection (4). In the present case it is appropriate that such a direction be given requiring the appointed representative of the estate of the late Mr J E Talacko to give a notice to the Attorneys-General so as to bring forward submissions that would facilitate the Court considering whether there are special reasons for it to order that the substantive issues raised by the applicants’ summonses be determined by this Court.

While the general rule is that special federal matters should be heard by the Federal Court, s 6(3) nevertheless leaves open the prospect that the Supreme Court may proceed to determine the matter where there are special reasons for doing so. Here, the substantive issues raised by the applicants’ summonses involve a review of the conduct of the Prothonotary of this Court in issuing the first and second certificates pursuant to the Foreign Judgments Act 1991 (Cth) and the Miscellaneous Civil Procedure Rules. In my view, those circumstances would be capable of providing a proper basis for this Court to be satisfied that there are special reasons for the proceeding to be determined by this Court. Such a course would also facilitate the efficient and timely resolution of the real issues in dispute between the parties. Accordingly, while the occasion for the Court to be satisfied that there are special reasons has not yet formally arisen, that is the course I would propose to adopt, subject to receiving any submission to the contrary made by the Attorneys-General. Further, the provision of a copy of these reasons to the Attorneys-General should assist them to readily understand the nature of the special federal matter and the manner in which it has arisen and to prepare any submissions in response to the notice.

Alleged errors or deficiencies in the second certificate

The applicants contend that notwithstanding that the second certificate has corrected or addressed some of the errors that were present in the first certificate, it is nevertheless defective. First, they say it fails to make any reference to the Bankruptcy Act or the Income Tax Assessment Act1936 (Cth). That is, the error was said to lie in the fact that the second certificate does not reproduce any reference to the operation of the Bankruptcy Act 1966 (Cth) and the Income Tax Assessment Act1936 (Cth) of the kind made in paragraph 9 of the first certificate.[172] Further, the applicants submit that if the Court were to find that there was power to issue the first certificate or the second certificate, then the second certificate is misleading and deceptive to the extent that it fails to refer to the effect of s 58(3) of the Bankruptcy Act1966 (Cth) upon the money orders made by Kyrou J and Wood AsJ, which are clearly ‘provable debts’ under s 82(1) of the Bankruptcy Act1966 (Cth) and as such are stayed from enforcement.
[172]The relevant passage in paragraph 9 of the first certificate stated:
The provisions of the Bankruptcy Act 1966 (Commonwealth) and the Income Tax Assessment Act 1936 (Commonwealth) operate upon parties to proceedings under those enactments within their respective terms but do not operate to affect the finality or the binding and enforceable effect of the said Judgment and Order.

Given the conclusions I have reached above about the operation of s 58(3) of the Bankruptcy Act1966 (Cth) in effecting a stay of enforcement of the judgments and orders in question, it is not necessary for me to deal with this issue. But even if, contrary to my view, it were possible for the second to fifth plaintiffs to ‘duly’ make application for a certificate under s 15(1), in circumstances where the judgment debtor is a bankrupt and the relevant money orders are ‘provable debts’, it would be desirable for the certificate to address the operation and effect of s 58(3) of the Bankruptcy Act1966 (Cth).

Whether Mr Findlay or Mrs Talacko is to be appointed as representative of Mr J E Talacko’s estate
Rule 16.03 of the General Civil Procedure Rules

Rule 16.03 of the General Civil Procedure Rules facilitates the representation of the estate of a deceased person in circumstances where the deceased person was interested in any question in a proceeding but the deceased person has no personal representative. Rule 16.03(1) provides that in such circumstances the Court may—

(a)proceed in the absence of a person to represent the estate of the deceased; or
(b)by order (with the consent of the person appointed) appoint a person to represent the estate for the purpose of the proceeding.

Before making an order under r 16.03, the Court may require notice of the application for the order to be given to any person having an interest in the estate.[173] Where an order is made under r 16.03(1), that order and any judgment or order subsequently given or made in the proceeding ‘binds the estate of the deceased person as it would had a personal representative of the deceased been a party’: r 16.03(2).
[173]Rule 16.03(3).

In the present case, each of Mr Findlay and Mrs Talacko consents to being appointed to represent the estate of Mr J E Talacko for the purposes of making this application and seeks such an order in their favour as sole representative. Affidavit material has been filed on behalf of each of them deposing to the merits of their respective appointment. That material makes clear that each of Mr Findlay and Mrs Talacko has had a close and ongoing relationship with Mr Talacko over many years.

Mrs Talacko as a candidate for appointment

Mrs Talacko is the widow of Jan Emil Talacko. While she has a residence in Glenferrie Road, Malvern, Mrs Talacko currently resides in Prague. There are four children of the marriage, and two of her sons, David and Paul, also reside in Prague. Mrs Talacko has retained solicitors in both Prague and Melbourne, the latter having acted on her behalf for the purposes of making the present application. Mrs Talacko may have, subject to rights of the trustee in bankruptcy, rights in respect of assets of Mr J E Talacko’s estate. In that regard, Mrs Talacko has instructed her solicitor in this proceeding that:

(a)her children intend to renounce their rights of inheritance under Czech law with respect to Mr Talacko’s deceased estate; and
(b)in those circumstances, she will be entitled under Czech law to the entire deceased estate of Mr Talacko; and
(c)she has been given legal advice in the Czech Republic to the effect of sub para (b) above.[174]

[174]Affidavit of Mr Joseph sworn on 16 December 2014, at [26].

Mrs Talacko contends that she is a more appropriate person than Mr Findlay to be appointed as the representative of Jan Emil Talacko’s estate under r 16.03 of the General Civil Procedure Rules. She submits that following Mr Talacko’s death, Mr Findlay has no status in respect of Mr Talacko or his affairs, the enduring power of attorney which Mr Findlay once held having been revoked by operation of law on Mr Talacko’s death.

Mr Findlay as a candidate for appointment

Mr Findlay is a retired lawyer, having practised for many years as a barrister and from 1991, as a solicitor. From 1995 to 30 June 2005 he was the principal of the law firm known as Findlay Arthur Phillips and from 1993 until his retirement from that firm, he acted for Mr Talacko in this proceeding. Mr Talacko appointed him as his attorney under an Enduring Power of Attorney on 21 March 2012. As his attorney, Mr Findlay assisted Mr Talacko in the conduct of his personal affairs and, in particular, with instructing lawyers about the conduct of the various legal proceedings to which he was a party.

Mr Findlay first met Mr Talacko in 1964. He has been friends with Mr and Mrs Talacko since then and attended their church wedding in Melbourne on 27 September 1965. Mr Findlay says that as a result of acting for Mr Talacko in proceedings over many years, he is conversant with the facts and claims made by the plaintiffs, and Mr Talacko respectively. At the conclusion of the appeal and special leave application in the 1998 proceeding, and following the making of the sequestration order on 7 November 2011, Mr Findlay says that ‘in his capacity as a close friend’ he resumed consultation with Mr Talacko in respect of the various litigation on foot in the Supreme and Federal Courts, and also the proceedings in the Czech Republic.

Mr Findlay resides in suburban Melbourne. He deposes that during Mrs Talacko’s absences overseas, and in particular during her prolonged absence in the months preceding Mr Talacko’s death in 2014, he acted as Mr Talacko’s carer while he was an in-patient at an aged care facility in Camberwell and later in hospital. During this time Mr Findlay was liaising with doctors and assisting Mr Talacko in the conduct of the various legal proceedings. Following Mr Talacko’s death, Mr Findlay arranged Mr Talacko’s funeral and paid the fee therefore and collected his ashes afterwards.

Mr Findlay acknowledges that he no longer has any formal role or status in respect of Mr Talacko or his affairs. Nevertheless, he contends that he is well-placed to perform the role of representing the estate on this application in the 1998 proceeding. The challenge to the first certificate was initiated by Mr Talacko, at a time when Mr Findlay held an enduring power of attorney. Following Mr Talacko’s death, Mr Findlay made a fresh application on 8 November 2014 seeking appointment as representative of the estate in order that he could continue to press the issue. A few days later, Mrs Talacko issued her application seeking essentially the same relief save that she be appointed as the representative of the estate.

Appointment of a sole representative of the estate

During the trial of the 2009 proceeding, the second to fifth plaintiffs applied pursuant to r 9.09 of the General Civil Procedure Rules for State Trustees Limited to be added as a party to the proceeding. Separately, Mr Findlay applied to be appointed, pursuant to r 16.03(1)(b), to represent the estate of Mr J E Talacko for the purposes of the trial. Justice McDonald made an order adding State Trustees Limited as the seventh defendant nunc pro tunc from 3 November 2014 and dismissed Mr Findlay’s application on discretionary grounds. The judgment delivered by McDonald J in the 2009 proceeding on 7 August 2015 records that State Trustees Limited played no active role in the proceedings.[175]
[175]See Talacko v Talacko [2015] VSC 287, at [34].

In the present case, neither the solicitors for the trustee in bankruptcy nor State Trustees Limited as the executor pro tem of Mr Talacko’s estate has sought to appear before the Court on the hearing of the applications or take any active role in the proceedings.

The present applications raise a substantive matter that is of importance to the Court, as well as to the parties, namely whether certificates issued by the Prothonotary in this proceeding, purportedly pursuant to the Foreign Judgments Act 1991 (Cth) and the Miscellaneous Civil Procedure Rules, for use in proceedings in the Czech Republic are irregular, incorrect or invalid.

To date, it appears that only the first certificate has been used in proceedings in the Czech Republic.[176] Leaving to one side the conclusions I have reached about their lack of competency to request the issue of such a certificate, it is clear that the second to fifth plaintiffs by their conduct in unilaterally seeking the issue of the second certificate to amend and replace in its entirety the first certificate, must be taken to have recognised and acknowledged that the first certificate does not correctly state the effect of the relevant judgments and orders. Otherwise, no useful purpose would be served by seeking the issue of the second certificate as a replacement for the first. Accordingly, in these circumstances, I am satisfied that the estate of Mr Talacko has a proper interest in raising this matter before the Court.
[176]The second to fifth plaintiffs have relied on the first certificate in the petition proceedings in the Czech Republic. The first plaintiff, Dr Talacko, has also sought to rely upon the first certificate in the ‘Set Aside’ proceedings in the Czech Republic commenced in Prague by his late mother on 20 April 2012. The third certificate, which was issued at the request of Dr Talacko and is in the same (or substantially the same) terms as the first certificate, does not appear to have been relied upon or used in any proceedings to date.

There is a dearth of authority on r 16.03(1)(b), and what factors should guide the exercise of the Court’s discretion to appoint a person to represent the estate of the deceased for the purposes of an application or the trial of a proceeding. In Hewitt v Gardner; Hewitt v Gardner,[177] a decision concerning the counterpart provision in New South Wales, r 7.10(2)(b) of the Uniform Civil Procedure Rules 2005 (NSW),[178] Ward J examined the procedural history of the rule. Her Honour noted that the predecessor to the present rule is found in Part 8 Rule 16 of the old Supreme Court Rules and dates back to s 44 of the Chancery Procedure Act 1852 (15 & 16 Vic c 86), but she added ‘many older variants of the rule do not include an equivalent of r 7.10(1)(b)’.[179]
[177][2009] NSWSC 705.
[178]Rule 7.10(2) provides:
The court:
(a)may order that the proceedings continue in the absence of a representative of the deceased person’s estate, or
(b)may appoint a representative of the deceased person’s estate for the purposes of the proceedings, but only with the consent of the person to be appointed.
[179]Ibid, at [77] (emphasis in original). Rule 7.10(1) provides:
This rule applies to any proceeding in which it appears to the court:
(a)that a deceased person’s estate has an interest in the proceedings, but is not represented in the proceedings, or
(b)that the executors or administrators of a deceased person’s estate have an interest in the proceedings that is adverse to the interests of the estate.

Her Honour then turned to consider what r 7.10 contemplates, stating:

Although the present service of Ritchie’s Uniform Procedure NSW when addressing r 7.10 appears to contemplate that normally the appointment will be of an administrator ad litem:
An appointment will not be made under this rule without the consent of the proposed appointee, but, subject to this, the court may appoint any person it considers appropriate: Re Curtis & Betts [1887] WN 126; Pratt v London Transport Board [1937] WN 43; Lean v Alston [1947] KB 467; Re Hart; Smith v Clarke [1963] NSWR 627; (1962) 80 WN (NSW) 1120. Normally the person would be appointed administrator ad litem: Dean & Chapter of Ely v Gayford (1853) 51 ER 896; 16 Beav 561,

on my reading of Dean & Chapter of Ely v Gayford, while that case supports the proposition that the person appointed under such a rule “ought, as nearly as possible, to be the same as would have been appointed administrator ad litem” (at 896-897), it does not support the proposition that an appointee under the rule must necessarily (or would normally) be appointed as an administrator ad litem.[180]

[180]Ibid, at [78]. See also the observations made by Austin J in Aliperti v Official Trustee [2000] NSWSC 315, at [6] when discussing the origin of Pt 8r 16 of the old Supreme Court Rules.

Justice Ward was also satisfied that the rule could be used to appoint a personal representative to act as plaintiff, even though the reported cases suggest that historically it has rarely been done.[181] Her Honour summarised the position, stating:

The usual circumstance in which a personal representative would be appointed under the rule is where there is no person willing or able to take out a grant of probate or administration and where proceedings cannot be continued or disposed of in the absence of a representative of the estate. However, the use of the rule is not limited to such circumstances.[182]

[181]Ibid, at [82]–[88].

[182]Ibid, at [89].

Accordingly, her Honour concluded that she was satisfied that ‘r 7.10 does empower the appointment of a personal representative to act as a plaintiff in appropriate cases’ but recognizing, however, that ‘[u]ltimately, the question whether a personal representative should be appointed is an exercise of discretion (Tarratt v Lloyd; Green v Green (1989) 17 NSWLR 343 at 350 per Gleeson CJ)’.[183]
[183]Ibid, at [92].

Under r 16.03(1) the Court may appoint a person to represent the estate for the purposes of the proceeding (para (b)) or proceed in the absence of such a person (para (a)). In the present case, the presence of the respective applicants before the Court and the submissions made on their behalf has been of considerable assistance in understanding the issues raised and in resolving them. In those circumstances, it is appropriate that a representative be appointed.

Each of Mr Findlay and Mrs Talacko has demonstrated a sufficient nexus with the late Mr Talacko and his estate to suggest that, in the absence of a personal representative, either of them would be suitable candidates for appointment and be capable of performing the role as representative of his estate. But only one representative is required to perform the role. If, as seems necessary, a choice is to be made between two candidates in a finely balanced contest, I would exercise my discretion in favour of Mrs Talacko, given her status as the widow of the deceased and her desire and willingness to act.

Once Mrs Talacko indicated that she was prepared to take on the role as personal representative there was no obvious reason or necessity for Mr Findlay to continue to seek to do so. The submissions made on behalf of Mrs Talacko were to the effect that while she was ‘grateful to Mr Findlay for what he’s done in the past’ nevertheless she was the more appropriate candidate.[184] Further, it was said, even though Mrs Talacko may reside in Prague, she has solicitors in Melbourne acting for her and has been available to give them instructions, and she is fully aware of the proceedings that are taking place in Prague and the use to which the certificates have been put.
[184]Transcript 13/05/15 at p 163, lines 21-22.

The submissions made on behalf of Mr Findlay adverted to a concession made in the 2009 proceeding before McDonald J by Mr Glick QC, senior counsel for Mrs Talacko, to the effect that she had a conflict of interest in respect of her position vis-à-vis Mr Talacko and his estate. The submissions made before me clarified that the conflict referred to arose from the fact that both Mrs Talacko and the estate of her late husband were each named as defendants in that proceeding. Mrs Talacko admits that there was conflict in that proceeding but submits that it has no relevance to her fitness as a candidate for appointment to represent the estate in these proceedings. Mrs Talacko is not a party to the 1998 proceedings and having now heard the present applications, I am satisfied that no conflict, real or apparent, has been identified as relevant in these proceedings.

Summary of outcome and proposed orders

The procedure agreed between the parties to the application contemplated that in the event that a ‘representative’ order is made, appointing either Mr Findlay or Mrs Talacko to represent the estate of Jan Emil Talacko, the Court would then proceed to determine the substantive aspects of the relevant application (that is, paragraphs 3 to 10 of the relevant summons) on the basis of the submissions having been made at the hearing.

Having determined that Mrs Talacko should be appointed to represent the estate, I propose making procedural orders as follows:

1.That Judith Gail Talacko be appointed, nunc pro tunc from 8 May 2015, to represent the estate of the first defendant, the late Jan Emil Talacko, pursuant to Rule 16.03(1) of the Supreme Court (General Civil Procedure) Rules 2005, for the purposes of conducting an application for the orders set out in the summons dated 8 May 2015.

The summonses issued on behalf of Mr Findlay and Mrs Talacko respectively dated 8 May 2015 also sought substantive relief. For the reasons set out above, I have concluded that the declaratory relief sought in the applicants’ summonses involves the Court embarking upon a ‘review’ of a decision to which the ADJR Act applies. However, because the matter is a special federal matter for the purposes of the Cross-Vesting Act, the Court may order that the proceeding be determined by the Supreme Court but only if it is satisfied that there are special reasons for doing so, and after notices have been given to the relevant Attorneys-General and a reasonable time has elapsed to enable them to consider whether submissions should be made to the Court. To facilitate this course, I propose making orders as follows:

2.That by 4.00 pm on 16 November 2015, Judith Gail Talacko as the appointed representative of the estate of the first defendant, the late Jan Emil Talacko, shall give notice under section 6(4) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) to each of the Attorney-General of the Commonwealth and the Attorney-General of Victoria specifying the nature of the special federal matter raised by her application for the orders set out in the summons dated 8 May 2015, such notice to be accompanied by a copy of these reasons. The notice should include a statement to the effect that if, after considering the matter the Attorneys-General wish to make submissions to the Court in relation to the proceeding, they should do so in the first instance in writing, to be filed and served by 4.00 pm on 7 December 2015.
3.If no submissions are received from the Attorneys-General raising any objection to the Supreme Court proceeding to determine the special federal matter raised, and the Court after taking into account any submission made by the Attorneys-General is satisfied that there are special reasons for the Supreme Court to determine the special federal matter raised, orders should be made as follows:
3.1. A declaration that the Certificate of Finality of Judgments and Orders issued by the Prothonotary of the Supreme Court of Victoria and dated 4 July 2012 (the First Certificate) is invalid.
3.2A declaration that the Amended Certificate of Finality of Judgments and Orders issued by the Prothonotary of the Supreme Court of Victoria and dated 23 February 2015 (the Second Certificate) is invalid.
3.3An order requiring the second to fifth plaintiffs to bring to the attention of the courts of the Czech Republic in which the First Certificate has been relied upon or otherwise used, notification that the First Certificate has been declared invalid, as has the Second Certificate which they sought and obtained in April 2015 to amend and replace the First Certificate.

4.In the event that either of the Attorneys-General seeks to intervene and raise any submission about the special federal matter, the matter shall be re-listed for further directions.

The parties acknowledge that the appeals from the ruling and orders made by Daly AsJ on 4 February 2015 have been rendered a nullity. In those circumstances, it will be necessary to make orders discontinuing or formally dismissing the appeals.

I will hear from the parties on the appropriate form of orders generally, including as to costs.

SCHEDULE OF PARTIES

S CI 1998 07393

BETWEEN:

JAN TALACKO (AS EXECUTOR OF THE ESTATE OF HELENA MARIE TALACKO)

First Plaintiff

ALEXANDRA BENNETT

Second Plaintiff

MARTIN TALACKO

Third Plaintiff

ROWENA TALACKO

Fourth Plaintiff

MARGARET HELEN BEATRICE TALACKO

Fifth Plaintiff

- and -

JAN EMIL TALACKO

Defendant

9. The said Judgment and order are binding upon the parties to this proceeding and those to whom notice of the hearing was duly and properly given. The said judgment and Order operate res judicata according to law against any contrary contention that might be raised by the Defendant [Mr J E Talacko]. The said Judgment and Order are entitled to be accorded full faith and credit throughout the Commonwealth and its territories. The provisions of the Bankruptcy Act 1966 (Commonwealth) and the Income Tax Assessment Act 1936 (Commonwealth) operate upon parties to proceedings under those enactments within their respective terms but do not operate to affect the finality or the binding and enforceable effect of the said Judgment and Order.

10. By reason of the circumstance that no appeal or other process of any kind has been successfully lodged or raised against any of the other Judgments or Orders of the Court set out in paragraph 6 hereof those Judgments and Orders have become FINAL, BINDING AND ENFORCEABLE according to law.

[2015] VSC 624

12 November 2015