MARTIN TALACKO, ROWENA TALACKO AND MARGARET HELEN TALACKO
v
JAN EMIL TALACKO
Defendant
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JUDGE:
KYROU J
WHERE HELD:
Melbourne
DATE OF HEARING:
8 December 2009
DATE OF JUDGMENT:
11 December 2009
CASE MAY BE CITED AS:
Talacko v Talacko
MEDIUM NEUTRAL CITATION:
[2009] VSC 579
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PRACTICE AND PROCEDURE – Award of interest consequent upon judgment for equitable compensation for breach of fiduciary duty – Principles for awarding interest – Supreme Court Act 1958, ss 58 and 60 – Inherent equitable jurisdiction to award interest – When an award of compound interest is appropriate – Choice of interest rate.
PRACTICE AND PROCEDURE – Award of costs on an indemnity basis – Principles for determining when appropriate – Whether contract requires payment of indemnity costs – Whether defendant’s conduct warrants an award of indemnity costs – Set-off for interlocutory costs awarded on a party and party basis.
PRACTICE AND PROCEDURE – Judgment in a foreign currency – Equitable compensation based on value of properties located overseas and net rental earned from those properties.
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APPEARANCES:
Counsel
Solicitors
For the Plaintiffs
Mr S J Howells
Holding Redlich
with Ms L Kinda
For the Defendant
Mr D J Williams
Findlay Arthur Phillips
TABLE OF CONTENTS
Introduction and summary ..................................................................................................1 Judgment in the euro currency............................................................................................1
Principles for awarding interest .....................................................................................2 How the amounts of $881,017 and €115,772 have been calculated ...........................5
Decision in relation to interest ........................................................................................6
Principles in relation to costs ........................................................................................10 When will the Court depart from the usual costs order? .........................................12 When will the Court grant indemnity costs?..............................................................13 Decision in relation to costs...........................................................................................16 Set-off for costs already taxed and paid ......................................................................23
On 24 November 2009, I delivered reasons for judgment (‘Substantive Judgment’)[1] in which I found that the defendant is liable to pay to the plaintiffs equitable compensation comprising:
€8,839,244, representing two-thirds of the value of the interests in various properties in Europe that were restituted to him (‘Restituted Properties’) prior to the execution of the terms of settlement dated 23 February 2001 (‘Terms’);
(b)
$881,017, representing two-thirds of the net rental earned by the defendant from the Restituted Properties since 1993 (‘award of net rental’); and
(c)
€115,772, representing an allowance for the rent-free use by the defendant of an apartment in Haštalská 12, Prague, since 1992 (‘Haštalská 12 rent allowance’).
The plaintiffs have now applied for interest and costs, and for an order that judgment be expressed in euros rather than in Australian dollars.
For the reasons that follow, I have decided that judgment be expressed in euros and that the plaintiffs be awarded:
(a)
simple interest at the rates prescribed from time to time under the Penalty Interest Rates Act 1983 (Vic) (‘PIRA’) in respect of the award of…
Grounds of appeal
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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AGLC
Talacko v Talacko [2009] VSC 579
Case
[2009] VSC 579
Decision Date
CaseChat Overview and Summary
Talacko v Talacko is a case that involves a dispute between Talacko and Talacko, which was heard in the Supreme Court of Victoria. The dispute centres around the equitable compensation for a breach of fiduciary duty, including the principles governing the award of interest on such compensation, the appropriateness of an indemnity costs order, and the valuation of compensation in a foreign currency.
The court was required to determine the principles for awarding interest on equitable compensation for breach of fiduciary duty. It considered whether an award of compound interest was appropriate and, if so, the appropriate interest rate. The court also examined whether the contract between the parties required the payment of indemnity costs and whether the defendant’s conduct warranted such an award, taking into account any set-off for interlocutory costs awarded on a party and party basis. Furthermore, the court had to determine the value of the compensation based on properties located overseas and the net rental earned from those properties.
The Supreme Court held that the principles for awarding interest on equitable compensation for breach of fiduciary duty should be applied, taking into account the nature of the duty breached and the context of the compensation awarded. The court found that an award of compound interest was appropriate and set the interest rate based on the relevant statutory provisions and equitable considerations. It determined that there was no contractual basis for an indemnity costs order but considered the defendant’s conduct in awarding costs on an indemnity basis. The court also addressed the valuation of the compensation in a foreign currency, taking into account the value of the properties and the net rental earned.
The court ordered Talacko to pay Talacko the equitable compensation, including compound interest at the specified rate, and ordered Talacko to pay Talacko’s costs on an indemnity basis, subject to set-off for interlocutory costs. The compensation was calculated based on the value of the properties and net rental earned, converted into Australian dollars at the appropriate exchange rate.