Talacko v Talacko

Case [2010] FCA 239

FEDERAL COURT OF AUSTRALIA

Talacko v Talacko [2010] FCA 239

Citation: Talacko v Talacko [2010] FCA 239
Parties: HELENA MARIE TALACKO, ALEXANDRA ANN BENNETT, MARTIN THORBURN JAN TALACKO, ROWENA KIRSTEN EVE TALACKO and MARGARET HELEN BEATRICE TALACKO v JAN EMIL TALACKO
File number: VID 142 of 2010
Appeal from: Talacko v Talacko [2010] FCA 193
Parties: JAN EMIL TALACKO v HELENA MARIE TALACKO, ALEXANDRA ANN BENNETT, MARTIN THORBURN JAN TALACKO, ROWENA KIRSTEN EVE TALACKO and MARGARET HELEN BEATRICE TALACKO
File number: VID 152 of 2010
Judge: RYAN J
Date of judgment: 17 March 2010
Date of hearing: 10 March 2010
Date of last submissions: 11 March 2010
Place: Melbourne
Division: GENERAL DIVISION
Category: No Catchwords
Number of paragraphs: 48
Counsel for the Applicants in VID 142 of 2010 and Respondents in VID 152 of 2010: Mr G Bigmore QC with Mr P Fary
Solicitor for the Applicants in VID 142 of 2010 and Respondents in VID 152 of 2010: Holding Redlich
Counsel for the Respondent in VID 142 of 2010 and Applicant in VID 152 of 2010: Mr M D Wyles SC with Dr T J F McEvoy
Solicitor for the Respondent in VID 142 of 2010 and Applicant in VID 152 of 2010: Findlay Arthur Phillips

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

GENERAL DIVISION

VID 142 of 2010
BETWEEN:

HELENA MARIE TALACKO
First Applicant

ALEXANDRA ANN BENNETT
Second Applicant

MARTIN THORBURN JAN TALACKO
Third Applicant

ROWENA KIRSTEN EVE TALACKO
Fourth Applicant

MARGARET HELEN BEATRICE TALACKO
Fifth Applicant
AND:

JAN EMIL TALACKO
Respondent

JUDGE:

RYAN J

DATE OF ORDER:

17 MARCH 2010

WHERE MADE:

MELBOURNE

THE COURT ORDERS THAT:

1.The respondent’s application for variation or discharge of the order of 5 March 2010 or the undertaking given that day by the debtor’s solicitor be dismissed.

2.The respondent pay the applicants’ costs of the hearing on 10 March 2010, such costs to be taxed in default of agreement.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.


IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION VID 152 of 2010

ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA
BETWEEN:

JAN EMIL TALACKO
Applicant

HELENA MARIE TALACKO
First Respondent

ALEXANDRA ANN BENNETT
Second Respondent

MARTIN THORBURN JAN TALACKO
Third Respondent

ROWENA KIRSTEN EVE TALACKO
Fourth Respondent

MARGARET HELEN BEATRICE TALACKO
Fifth Respondent

JUDGE:

RYAN J

DATE OF ORDER:

17 MARCH 2010

WHERE MADE:

MELBOURNE

THE COURT ORDERS THAT:

1.The application for leave to appeal from the orders of Dodds-Streeton J of 5 March 2010 be refused.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.


IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

GENERAL DIVISION

VID 142 of 2010
BETWEEN:

HELENA MARIE TALACKO
First Applicant

ALEXANDRA ANN BENNETT
Second Applicant

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AGLC
Talacko v Talacko [2010] FCA 239
Case
[2010] FCA 239
Decision Date

CaseChat Overview and Summary

The case of Talacko v Talacko before the Court involves two applications by Jan Emil Talacko, the debtor, arising from orders made by Dodds-Streeton J on 5 March 2010. The first application is for a variation of her Honour’s order pursuant to liberty to apply, which was reserved on the same date. The second application is for leave to appeal from her Honour’s order, assuming that leave is required. The applicants, Helena Marie Talacko, Alexandra Ann Bennett, Martin Thorburn, Rowena Kirsten Eve Talacko, and Margaret Helen Beatrice Talacko, sought orders under sections 30, 50, and 78 of the Bankruptcy Act 1966 (Cth) to restrain the debtor from dealing with certain properties, deliver up his passports, and impose travel restraints. The orders ultimately made on 5 March 2010 restrained the debtor from dealing with certain properties, directed a registered trustee to take control of his property, and ordered his passports to be held by his solicitor, Michael Witt, under specific undertakings.

The legal issues the Court was required to decide pertained to whether the debtor's application for variation or discharge of the orders made on 5 March 2010 should be granted and whether leave to appeal from those orders should be allowed. The Court examined whether the presumptive injustice to the debtor, who was unable to travel overseas for about a fortnight, outweighed the insufficiency of the doubt attending the orders of 5 March 2010. The Court also considered the debtor's common law rights and whether they could be protected by allowing him to apply for delivery of his passport for specific international travel.

In reaching its decision, the Court noted that the debtor's inability to travel for a short period was slight, and the doubt about the orders made on 5 March 2010 was insufficient. The Court held that the debtor's common law rights could be protected by allowing him to apply on 48 hours' notice for delivery of his passport for a specific and identifiable journey, provided he intended to return to Australia. Consequently, the Court dismissed the debtor's application for variation or discharge of the orders of 5 March 2010 and refused his application for leave to appeal from those orders. The debtor was ordered to pay the applicants’ costs of the hearing on 10 March 2010.

Orders

Orders of the court

1. The respondent’s application for variation or discharge of the order of 5 March 2010 or the undertaking given that day by the debtor’s solicitor be dismissed.

2. The respondent pay the applicants’ costs of the hearing on 10 March 2010, such costs to be taxed in default of agreement.

Note:

1. The application for leave to appeal from the orders of Dodds-Streeton J of 5 March 2010 be refused.

Note:

Background

Background to the litigation

There are before the Court two applications by Jan Emil Talacko (“the debtor”) arising out of orders made by Dodds-Streeton J on 5 March 2010. The first application I take to be for a variation of her Honour’s order pursuant to liberty to apply which was reserved on 5 March 2010. The second is an application for leave to appeal from her Honour’s order (assuming that leave to appeal is required). It is convenient first to set out the factual background as summarised in her Honour’s reasons and supplemented by evidence which has been adduced since those reasons were published. Factual background The applicants Helena Marie Talacko, Alexandra Ann Bennett, Martin Thorburn Jan Talacko, Rowena Kirsten Eve Talacko and Margaret Helen Beatrice Talacko applied to this Court, ostensibly pursuant to ss 30, 50 and 78 of the Bankruptcy Act 1966 (Cth) (“the Act”) for orders that;(a)The Official or a Registered Trustee take control of the property of the respondent, Jan Talacko, from the date of the order until a date specified by the Court.(b)The respondent and his solicitor, Michael Witt of Finlay Arthur Phillips, deliver up to the District Registrar all the respondent’s passports.(c)Alternatively, that Mr Witt (on provision of a suitable undertaking to the Court) hold the respondent’s passport until further order.(d)That the respondent be ordered:(i)not to leave the State of Victoria;(ii)not to attend any point of international departure; and(iii)not to apply for any other passport.(e)That the time for service of the application be abridged. Although the application referred to s 78 of the Act, in fact, only ss 30 and 50 were invoked in support of the orders ultimately sought. Her Honour noted that the application was attended by some urgency “as orders made in the Supreme Court restraining the debtor from departing Victoria would expire at 5.00pm today.” Before the application under ss 30 and 50 of the Act was made, two bankruptcy notices dated 1 March 2010 had been served on the debtor, one at the instance of the first applicant, Helena Talacko, and the other at the instance of the second to fifth applicants. Each bankruptcy notice claimed a total debt of $7,569,482.50. Also adduced in evidence before the primary Judge were reasons for judgment in the Supreme Court of Victoria, the first by Habersberger J on 13 October 2009 and the second by Kyrou J on 24 November 2009. The judgment debt which was the foundation of the bankruptcy notices resulted from an order by Kyrou J on 11 December 2009 that the debtor pay to the first applicant, who is the sister of the debtor, the sum of €4,740,830.00 and €296,079 by way of interest and pay to the second to fifth applicants jointly a sum in the same amounts of €4,740,830.00 and interest of €296,079. The latter applicants are the children of a deceased sibling of the debtor. The reasons for judgment of Kyrou J disclose that the judgment debt was by way of equitable compensation for breach of duty arising from a family arrangement for the recovery of properties in Germany, the Czech Republic and Slovakia, which had formerly been confiscated from the parents of the first applicant and the debtor.

Evidence

Evidence Before The Court

In the light of her earlier observations and references, her Honour then reached these conclusions;50 In my view, the applicants have established that orders broadly in the terms sought in paragraphs 1(a) and 1(b) of the applicants’ Contentions are necessary in the interests of creditors.51 The order in paragraph 1(a) will, however, require adjustment to reflect its application only to certain properties listed in Attachment A.52 In my opinion, for the reasons given by Cooper J in Brazel, travel restraints should not be imposed on the respondent in the terms sought pursuant to s 30 of the Act. Rather, as in Brazel, the appropriate course is to order that the respondent’s passports be delivered to the Court or his solicitor, from whom appropriate undertakings should be sought.In the result, the orders made by her Honour on 5 March 2010 were in these terms:-UPON THE UNDERTAKING OF Michael Witt of Findlay Arthur Phillips to hold the Respondent’s passports and not return them to the Respondent or any other person at the Respondent’s direction unless the Court so orders or the Applicants’ solicitors consent in writing, and that otherwise the undertaking shall continue until 5:00pm on 24 March 2010. THE COURT ORDERS THAT:1.Until further order, the Respondent, Jan Emil Talacko, be restrained from taking any further steps by himself or by his employees, agents or attorneys for the purpose of or in furtherance of selling, transferring, donating or otherwise dealing with any of the properties listed in Attachment “A”.2.The Court directs that James Stewart of Ferrier Hodgson, a Registered Trustee, take control of the Respondent’s property until further order. 3. Liberty to apply be reserved.4. The time for service of this application be abridged. 5. Costs be reserved.6. The further hearing of the application is adjourned until 24 March 2010.Evidence and submissions in relation to variation of the orders of 5 March 2010 On 9 March 2010 a flight reservation was made for the debtor and his wife, Judith Gail Talacko, on Cathay Pacific flight CX168 departing Melbourne, Tullamarine airport at 1.05 am on 13 March 2010 for London via Hong Kong. At the same time, a further flight was booked for the debtor and his wife departing from London for Prague at 2.40 pm on 14 March 2010. A Cathay Pacific itinerary exhibited to an affidavit by the debtor’s solicitor, Michael Geoffrey Witt, sworn 10 March 2010, discloses that return flights have been booked for the same passengers from Prague via London and Hong Kong to Melbourne between 10 and 12 September 2010. Also exhibited to the same affidavit are versions in translation of advice received by the debtor’s Czech attorneys from a Court in Prague which is apparently seized of a proceeding between the first to fourth applicants as plaintiffs and the debtor as defendant relating to “surrender of property + PO”. The effect of that advice seems to be that a hearing in that proceeding is to take place on 20 April 2010 “at 1.00 pm Door No. 6” but the presence at that hearing of the parties (as distinct from their legal representatives) is not necessary.

Decision

Reasons for decision

In the present case the presumptive injustice to the debtor, resulting from his inability to travel overseas for about a fortnight if the Court does not impose any further restraint, is slight. When that consideration is regarded in conjunction with the insufficiency of the doubt attending the orders of 5 March 2010, the case against leave to appeal becomes very strong.Conclusion For the reasons outlined above the application for variation or discharge of the orders of 5 March 2010 is dismissed and the application for leave to appeal from those orders is refused. The debtor must pay the applicants’ costs of the hearing on 10 March 2010 of both applications.

Ratio Decidendi

Legal Principle Established

As well, Counsel for the applicants pointed to the need for the registered trustee to investigate, and possibly explore with the debtor, whether his property includes any shares held by him directly or indirectly in Grange Lynne or Noel Grave or any interest held through either or both of those companies in 2/6 Grange Road. Consideration of the application for variation or discharge of the orders of 5 March 2010 Contrary to the submission on behalf the debtor, I do not regard the statement quoted at [44] of Dodds-Streeton J’s reasons reproduced at [8] above that “the debtor’s common law rights could be protected if he were permitted to apply to the Court for delivery up of his passport in relation to a specific and identifiable journey, with evidence of a present intention to return to Australia” as indicating a view by her Honour that all the debtor had to do to recover his passports was to indicate a specific journey which he wished to undertake from which he presently intends to return to Australia. Rather, her Honour, in that passage, was paraphrasing part of the reasons of Cooper J in Brazel where his Honour observed, after doubting, without deciding whether s 30(1)(b) ought to be construed as giving a power to restrain a debtor, before the making of a sequestration order, from leaving the jurisdiction;… … Even if the power to restrain the debtor leaving Australia exists, the material does not to my mind make out a case for the exercise of the power.However the question of the passport is a different matter. The debtor says that the passport is his property. That is a common but mistaken view. The property in a passport under s.6A of the Passport Act 1938 remains always in the Commonwealth. There is however a right to obtain a passport as a travel document to enable a person to exercise a common law right of travel and freedom of movement where in order to make use of that right a passport, as an internationally recognised travel document, is necessary.In the instant case, there is before the court no specific proposal in relation to overseas travel. There is therefore, with the passport being held by the court, no present impediment of any common law right of travel. The position may be different should a specific occasion arise where the debtor wishes to exercise his right of travel for business or any other purpose and in order to do so needs his passport, or access to his passport as a document of international travel, to allow him to leave the country. If and when that occasion arises the question will then be whether or not there are circumstances which would enable the passport to be withheld notwithstanding that the withholding of the passport impinged or abrogated the debtor's common law right of travel. Whether the passport ought to be retained pending the hearing of the creditor’s petition is a question of balancing the public interest in ensuring that if the debtor’s estate is sequestrated, any order of the court or the operation of the Act is not rendered nugatory by the debtor's refusal to return to Australia against the debtor's common law right of freedom of movement and travel.Although the material would not satisfy me that a warrant should issue for Mr. Brazel's arrest as a fleeing debtor, objectively there are a number of reasons why, in the absence of substantial assets in his own name in Australia, he would seek to take up a position overseas if he could earn $100,000.00 a year. There is in these circumstances some risk that the debtor may leave the jurisdiction and not return.In my view the debtor's common law rights can be protected and given effect to by allowing him to apply on 48 hours notice to the court for delivery up of his passport in order to enable him to travel in relation to a specific and identifiable journey with a specific and identifiable itinerary where he has a ticket which shows that it is his then present intention to return to Australia. Therefore I propose, pursuant to s.30(1)(b) of the Act, to order that the passport be retained in the custody of the District Registrar with liberty to the debtor to apply on 48 hours notice for delivery up of the passport for the purpose of international travel.