Talacko v Talacko

Case [2010] FCAFC 54

FEDERAL COURT OF AUSTRALIA

Talacko v Talacko [2010] FCAFC 54

Citation: Talacko v Talacko [2010] FCAFC 54
Parties: HELENA MARIE TALACKO, ALEXANDRA ANN BENNETT, MARTIN THOBURN JAN TALACKO, ROWENA KIRSTEN EVE TALACKO AND MARGARET HELEN BEATRICE TALACKO v JAN EMIL TALACKO
File number: VID 201 of 2010
Judges: GRAY, MANSFIELD AND MCKERRACHER JJ
Date of judgment: 27 May 2010
Catchwords: BANKRUPTCY - special case stated - statutory interpretation - general powers of Court pursuant to s 30(1) of the Bankruptcy Act 1966 (Cth) - restraint of person in respect of whom a bankruptcy notice has been issued from leaving the jurisdiction - delivery up of passport - fundamental right to travel freely - Bankruptcy Act 1966 as a code
Legislation: Bankruptcy Act 1966 (Cth) ss 30(1), 78
Cases cited: Anthony Hordern & Sons Ltd v Amalgamated Clothing & Allied Trades Union of Australia (1932) 47 CLR 1
Re Bayliss; Ex parte Hadotone Pty Ltd and Others v Official Trustee in Bankruptcy (1987) 15 FCR 91
Re Bilen; Ex parte Sistrom (unreported, Federal Court, Neaves J, 11 April 1985)
Re Brazel; Ex parte Royal Nominees Pty Ltd (unreported, Federal Court, Cooper J, 2 June 1995)
Clunies-Ross, Re; Totterdell, Ex p (1987) 72 ALR 241
Coco v The Queen (1993) 179 CLR 427
Danieletto v Khera (1995) 35 NSWLR 684
Electrolux Home Products Pty Ltd v Australian Workers' Union [2004] HCA 40; (2005) 221 CLR 309
Evans v State of NSW [2008] FCAFC 130; (2008) 104 ALD 234
Jackson v Sterling Industries Ltd (1986) 12 FCR 267
Potter v Minahan (1908) 7 CLR 277
Storey v Lane (1981) 147 CLR 549
Talacko v Talacko (No 2) [2009] VSC 444
Talacko v Talacko [2010] FCA 193
Talacko v Talacko [2010] FCA 239
Vale v Sutherland [2009] HCA 26; (2009) 237 CLR 638
Weiss v Official Trustee in Bankruptcy (1983) 1 FCR 40
Williams v Minister for the Environment & Heritage [2003] FCA 627; (2003) 74 ALD 111
Date of hearing: 6 May 2010
Place: Melbourne
Division: GENERAL DIVISION
Category: Catchwords
Number of paragraphs: 39
Counsel for the Applicants: G Bigmore QC and P Fary
Solicitor for the Applicants: Holding Redlich
Counsel for the Respondent: MD Wyles SC and TJF McEvoy
Solicitor for the Respondent: Findlay Arthur Phillips

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

GENERAL DIVISION

VID 201 of 2010
BETWEEN:

HELENA MARIE TALACKO, ALEXANDRA ANN BENNETT, MARTIN THOBURN JAN TALACKO, ROWENA KIRSTEN EVE TALACKO AND MARGARET HELEN BEATRICE TALACKO
Applicants
AND:

JAN EMIL TALACKO
Respondent

JUDGES:

GRAY, MANSFIELD AND MCKERRACHER JJ

DATE OF ORDER:

27 MAY 2010

WHERE MADE:

MELBOURNE

THE COURT ORDERS THAT:

1.The question stated for the consideration of the Full Court be answered as follows:

Question:Do the provisions of s 30(1) of the Bankruptcy Act 1966 (Cth) empower the Court to order that a person in respect of whom a bankruptcy notice has been issued pursuant to the provisions of the Act ‑

(a)be restrained from leaving the jurisdiction;

(b)be required to deliver…

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Talacko v Talacko [2010] FCAFC 54
Case
[2010] FCAFC 54
Decision Date

CaseChat Overview and Summary

In the case of Talacko v Talacko, the Full Court of the Federal Court of Australia was tasked with determining whether the Bankruptcy Act 1966 (Cth) empowers the Court to restrain a debtor from leaving the jurisdiction and to require them to surrender their passport. The case arose out of a dispute between the parties regarding the interpretation of the general powers of the Court under section 30(1) of the Bankruptcy Act. The Court was required to decide if these provisions permit the issuance of such orders despite the fundamental right to travel freely.

The legal issues before the Court centred on the interpretation of section 30(1) of the Bankruptcy Act. Specifically, the Court needed to determine whether the Act, as a code, exhausts all possible restrictions on a debtor's travel. Additionally, the Court considered the balance between the fundamental right to travel and the objectives of the Bankruptcy Act, which include the equitable distribution of the debtor's assets among creditors.

The Court concluded that the Bankruptcy Act does not comprehensively enumerate all restrictions on a debtor's travel, thereby allowing for additional restrictions under section 30(1). The Court emphasised the importance of the right to travel freely but balanced this against the necessity of preventing the Bankruptcy Act's purposes from being thwarted. The Court found that the power to make such orders is not lightly exercised and that the fundamental right to travel must be weighed against the potential defeat of the Act's objectives. Given these considerations, the Court answered the posed questions affirmatively, holding that the provisions of section 30(1) do empower the Court to restrain a debtor from leaving the jurisdiction and to require the surrender of their passport.

The Court also addressed the issue of costs, agreeing with the parties that if the questions were answered in the affirmative, it would be appropriate for the applicants to bear their own costs. Consequently, the Court ordered that the questions be answered in the affirmative, that the applicants' costs be their own, and that there be no order as to the respondent's costs of the case stated.

Orders

Orders of the court

1. The question stated for the consideration of the Full Court be answered as follows:

Question: Do the provisions of s 30(1) of the Bankruptcy Act 1966 (Cth) empower the Court to order that a person in respect of whom a bankruptcy notice has been issued pursuant to the provisions of the Act ‑

(a) be restrained from leaving the jurisdiction;

(b) be required to deliver up his or her passport or passports to the Court or to any other person?

Answer: (a) Yes.

(b) Yes

2. The applicants’ costs of the case stated be the applicants’ costs of the proceeding.

3. There be no order as to the respondent’s costs of the case stated.

Note:

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Nothing contained in s 78 of the Bankruptcy Act suggests that it is an exhaustive statement of the restriction on travel or movement of a debtor. CONCLUSION To restrain a citizen from travelling is an order which would not be granted lightly and, in granting the order, the importance of the right to be free to travel would be a significant consideration to weigh in the balance. So also would be the prospect that the purposes of the Bankruptcy Act would be defeated or the bankruptcy rendered nugatory if travel were not restrained. The weighing of such considerations in the course of the exercise of judicial discretion is a task with which courts are charged on many occasions. A contention that the questions should be answered in the negative could readily defeat the objectives of the Bankruptcy Act. It fails to take into account the requirement that a court must act judicially in the making of any order under s 30(1)(b) and must have regard to whether or not such an order is ‘necessary’ for the purposes of carrying out or giving effect to the Bankruptcy Act. For the foregoing reasons, the question posed for the Court’s consideration in the case stated will be answered in the affirmative.COSTS The parties are agreed that if the questions are to be answered ‘yes’ then in the circumstances to which the case stated has come before the Court, it would be appropriate that the disposition of costs be on the basis that the costs be the applicants’ costs in the proceeding. We consider that the appropriate orders are:1.The question stated for the consideration of the Full Court be answered as follows:Question:Do the provisions of s 30(1) of the Bankruptcy Act 1966 (Cth) empower the Court to order that a person in respect of whom a bankruptcy notice has been issued pursuant to the provisions of the Act ‑(a)be restrained from leaving the jurisdiction;(b)be required to deliver up his or her passport or passports to the Court or to any other person?Answer:(a) Yes.(b)Yes2.The applicants’ costs of the case stated be the applicants’ costs of the proceeding.3.There be no order as to the respondent’s costs of the case stated. Those orders will be made.

Ratio Decidendi

Legal Principle Established

The real question on the first limb of the respondent’s argument is whether the principle of statutory construction in Coco and Electrolux dictates that in the exercise of judicial power conferred by Parliament under s 30(1), a judge exercising such power may not make an order, despite considering that it is ‘necessary’ for the purposes of the Bankruptcy Act, if the effect of the order is to erode for a period of time a common law right – ‘fundamental’ or otherwise. CONSIDERATIONThe fundamental right argument The making of ancillary orders to prevent the scheme of the Bankruptcy Act from being defeated is neither novel or unusual. In Storey v Lane (1981) 147 CLR 549 (at 556-557), Gibbs CJ observed (footnotes omitted):An 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. In Hill v East and West India Dock Co Earl Cairns cited with approval the following passage from the judgment of James LJ in Ex parte Walton; In re Levy: "Now, the bankruptcy law is a special law, having for its object the distribution of an insolvent's assets equitably amongst his creditors and persons to whom he is under liability, and, upon this cessio bonorum, to release him under certain conditions from future liability in respect of his debts and obligations." If further authority is needed for the proposition that the equitable distribution of the assets of the insolvent debtor is a fundamental purpose of the bankruptcy law, reference may be made to Attorney-General (Ontario) v Attorney-General (Canada) and Reg v Davison. It is equally clear that and (sic-any) system of bankruptcy law "may frequently require various ancillary provisions for the purpose of preventing the scheme of the Act from being defeated": Attorney-General (Ontario) v Attorney-General (Canada); Royal Bank of Canada v Larue. For example, it may be necessary to frame provisions to stop individual action by creditors for the purpose of obtaining payment of the debts due to them when the aim of the law is to secure administration of the debtor's assets in the interest of the creditors generally: Attorney-General (British Columbia) v Attorney-General (Canada). (emphasis added) The breadth of the language appearing in s 30(1) supports a conclusion that it should not be construed narrowly or in a confined or limited way. In Re Bilen; Ex parte Sistrom (unreported, Federal Court, Neaves J, 11 April 1985), Neaves J said:In my opinion s 30(1) of the Bankruptcy Act 1966 is not a provision limiting the Court’s jurisdiction. It is a facultative provision giving the Court full power, within the limits of its jurisdiction to be found elsewhere, to make such orders as it considers should be made in order to carry out and give effect to the Act. The words used are not words of limitation but of extension.