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 111Date 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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CaseChat Overview and Summary
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
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Decision
Reasons for decision
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.