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[2009] VSC 349
Supreme Court of Victoria
2009-08-10
Kyrou J
Original judgment source is linked above.
MAREVA ORDER - Requirements for obtaining - Foreign assets - First defendant executed transfers of land located overseas to second and third defendants living overseas - Gifts - Scope of Mareva orders in relation to foreign assets - Whether exceptional circumstances required - Whether impugned transaction can be reversed before final hearing - Meaning of 'status quo' - Meaning of 'good arguable case' - Proper law of causes of action.
No appearance for the Second, Third and Fourthnamed Defendants
1 On 10 August 2009, I made Mareva type orders against the first three defendants in the exercise of the Court's inherent jurisdiction ('August Order'). At that time, I said that I would deliver my reasons for the August Order on 21 August 2009. These are my reasons.
2 The August Order is set out in the annexure to these reasons. The properties affected by the August Order, which are located in the Czech Republic, Slovakia and Germany, are listed in attachment A to that order ('Properties').
3 The August Order follows a number of earlier interim orders that I have made in respect of the Properties both in this proceeding ('2009 proceeding') and in proceeding number 1793 of 1998 ('1998 proceeding'), from which the 2009 proceeding stems.
4 The plaintiffs in the 2009 proceeding are also plaintiffs in the 1998 proceeding. The first defendant in the 2009 proceeding ('Jan Talacko') is the sole defendant in the 1998 proceeding.
5 The 1998 proceeding was commenced by the plaintiffs on 2 October 1998 to enforce an agreement that they alleged was made in 1990 between the first plaintiff ('Helena Talacko'), Jan Talacko and their late brother, Peter Talacko, in respect of the Properties. The Properties, which had been owned by the parents of Jan, Helena and Peter Talacko, were confiscated by the Communist regimes of Czechoslovakia and East Germany progressively from 1948. After those regimes fell in the late 1980s, the governments of the Czech Republic, Slovakia and the re-unified Germany passed laws for the restitution of confiscated properties. Interests in the Properties were transferred to Jan Talacko under the restitution laws. The plaintiffs alleged that Jan Talacko had agreed to hold the Properties on behalf of himself and his siblings in equal shares and that he had breached that agreement. Their claim was based on breaches of contract, trust and fiduciary duty.
6 The trial of the 1998 proceeding commenced on 21 February 2001. The parties agreed to settle and terms of settlement dated 23 February 2001 were executed ('Terms'). The Terms are set out in full below:
In full settlement of the matters the subject matter of the proceeding the plaintiffs and the defendant agree as follows:
(a) Kiefernstrasse 19 and Kiefernstrasse 19b, Dresden, Germany;
(b) 17.4473 hectares of land in Repy, as defined in the particulars under paragraph 6 in the Amended Statement of Claim herein;
(c) approximately 0.8 hectares of land in Kbely, as defined in the particulars under paragraph 6 in the Amended Statement of Claim herein;
(d) approximately 364 hectares of land in Sucha, as defined in the particulars to paragraph 6 of the Amended Statement of Claim herein.
This clause does not apply to any interest in land purchased by the defendant as from this date.
(i) he has not reduced his right, title and interest in the properties the subject of these terms since the commencement of the proceeding;
(ii) the properties the subject of these terms, or any of them, are not encumbered;
(iii) that he shall not deal with the properties the subject of these terms otherwise than in accordance with these terms; and
(iv) that until transfer or sale he will pay costs, taxes and expenses associated with each property the subject of these terms.[1]
7 The plaintiffs reinstated the 1998 proceeding in 2005, alleging that Jan Talacko had breached the Terms. On 24 April 2008, Osborn J held that Jan Talacko had breached the Terms.[2] Subject to resolution of some outstanding defences,[3] Jan Talacko is liable to pay equitable compensation to the plaintiffs in accordance with cl 6 of the Terms. Apart from the outstanding defences, the principal issue in the 1998 proceeding is the assessment of equitable compensation.
8 In the 1998 proceeding, the plaintiffs claim equitable compensation by reference to two-thirds of the value of the Properties together with an adjustment for income earned on those Properties. The plaintiffs were looking to the Properties as the main assets of Jan Talacko from which to satisfy any judgment in the 1998 proceeding.
9 On 16 October 1998, Jan Talacko transferred his interest in the family home located at 312 Glenferrie Road, Malvern ('Malvern property') to his wife, Judith Talacko, the fourth defendant in the 2009 proceeding. The transfer was executed a few days before the commencement of the 1998 proceeding. As the August Order does not affect Judith Talacko or the Malvern property, I will not refer to them in any detail.
10 In May 2009, Jan Talacko transferred interests in some of the Properties to his sons David and Paul Talacko, the second and third defendants in the 2009 proceeding, by way of gift. Some of the transfers have been registered whereas the registration of the other transfers is pending. The transfers are discussed in detail later in these reasons.
11 The plaintiffs commenced the 2009 proceeding on 17 July 2009. They allege a number of causes of action against the first three defendants in respect of the transfers of the Properties. Against Jan Talacko, they allege a breach of the Terms, a breach of trust, a breach of fiduciary duty and conspiracy. Against David and Paul Talacko, they allege tortious conduct involving inducement of Jan Talacko to breach the Terms, causing loss by unlawful means and conspiracy, and knowing participation in Jan Talacko's breach of trust and breach of fiduciary duty. The causes of action are discussed in detail later in these reasons.
12 On 10 August 2009, I gave leave to the parties in the 2009 proceeding to refer to and rely on any affidavits filed in the 1998 proceeding.
13 The August Order and these reasons are based on the evidence and submissions I have received and heard to date. David and Paul Talacko have not yet appeared and nothing in the August Order or these reasons is intended to preclude them from presenting evidence or making submissions on any matter that affects them.
14 The facts that I took into account in making the August Order are discussed in more detail later in these reasons.
15 Under the rule in British South Africa Co v Companhia de Moçambique,[4] a Victorian court will not generally exercise jurisdiction in respect of the title to, or possession of, foreign land. However, that rule does not apply to an action in contract or based on a personal equity between the parties. For example, courts of equity have jurisdiction in personam in relation to foreign land against persons present within the forum in cases of contract, fraud and trust.[5]
16 The claims in the present case, at least against Jan Talacko, fall within the exception, being based on a breach of terms of settlement which themselves arose from an underlying allegation of breaches of contract, trust and fiduciary duty. In any event, no issue has been taken with whether the rule in Moçambique prevents this Court from exercising jurisdiction.
Enforceability of judgments of this Court in foreign courts
17 Whether a judgment of this Court will be enforceable in a foreign court is relevant to the assumption or exercise of jurisdiction by this Court. Generally, the Court will not assume jurisdiction where it is satisfied that any order it may make will not be effective. However, this is a matter that goes to the Court's discretion rather than its jurisdiction as such.
18 Whether a judgment of this Court will be enforceable in a foreign court will depend on the rules applicable in the foreign jurisdiction. Normally this Court will assume that its judgments and orders will be recognised and enforced by foreign courts. However, if it is shown that the judgment will not be enforced in the foreign jurisdiction where it must be enforced in order to be effective, this Court may, in its discretion, decline to assume jurisdiction on the basis that to do so would be ineffective.[6]
19 In the present case, there has been some evidence about the effect of a Victorian court order under Czech law. In his affidavit sworn on 27 January 2009, Martin Hrodek - an independent Czech attorney - gave the following evidence in the context of whether an order for discovery made by the Victorian Supreme Court would provide the defendant with a defence to any breach of Czech law:
(a) Czech courts will not recognise or enforce foreign judgments against Czech citizens if (amongst other things) mutual reciprocity is not guaranteed.
(b) Reciprocity can be established by a declaration of the Czech Ministry of Justice or by proving such reciprocity to the satisfaction of the Czech court.
(c) There has been no declaration in relation to decisions of Australian courts, and Mr Hrodek is not aware of any case based on which reciprocal recognition and enforcement could be demonstrated to the satisfaction of a Czech court.
(d) Even if there is in general reciprocity, Czech courts will not recognise or enforce foreign judgments if the matter belongs to the exclusive jurisdiction of the Czech courts. An example is a dispute concerning real property located in the Czech Republic.
(e) The subject matter of the 1998 proceeding would be considered to fall within the exclusive jurisdiction of the Czech courts.[7]
20 In response, in his affidavit sworn on 19 February 2009, Joseph Hlavička - the plaintiffs' Czech attorney - stated that whilst there is no general reciprocity, a Czech court will look at each case individually and that 'without anticipating the decision of the Czech Court, its recognition of the decision of the Australian courts cannot be excluded'. He also stated that he did not consider the subject matter of the 1998 proceeding to fall within the exclusive jurisdiction of the Czech courts.[8]
21 In these circumstances, I conclude that there is a possibility that a judgment of this Court will be enforced by the Czech courts. Although I am unable to quantify the possibility, its existence is sufficient to persuade me, as a matter of discretion, to exercise jurisdiction in this matter. This is because I regard the circumstances of this case as being exceptional, for the reasons I will discuss shortly.
22 As a superior court of record, this Court has inherent jurisdiction to make Mareva orders.
23 The basis of the jurisdiction is the Court's power to prevent abuse of its processes and protect the integrity of those processes once commenced, including preserving the efficacy of the execution that would lie against a judgment debtor by preserving assets and preventing their dissipation.[9]
24 The Mareva order operates in personam.[10]
25 Generally, a plaintiff must establish that there is:
(a) a good arguable case against the defendant; and
(b) a danger (sometimes described as a 'real risk') that the defendant will abscond or deal with assets in such a way that the plaintiff, if he or she succeeds, will not be able to have any judgment satisfied.
26 The Court must also be satisfied that no other interlocutory remedy suitable to the circumstances and less extensive in scope is available,[11] and that the balance of convenience favours the granting of relief.[12] The Court must not order the preservation of more property than is reasonable in all the circumstances, such as assets to the value of the plaintiffs' claim and anticipated costs.[13]
27 The 'good arguable case' requirement has been formulated in various ways by Australian courts. In Cardile v LED Builders Pty Ltd, the High Court referred to the need to show a 'reasonably arguable case'.[14] In Victoria, since Cardile, this Court has generally expressed the test as being whether there is a 'good arguable case'.[15] In at least two cases, the language of 'serious question to be tried' has been used, with no reference to how that relates, if at all, to a 'good arguable case'.[16] There has also been at least one case in which the language 'prima facie case' has been adopted.[17]
28 In Danlay Pty Ltd v Medlane Ltd, Warren J (as her Honour then was) stated that a 'good arguable case' must be demonstrated but that '[n]owadays the requirement of an arguable case is generally termed by the courts as a serious question to be tried'.[18] Danlay was decided after Cardile but does not refer to Cardile.
29 In Victoria University of Technology v Wilson,[19] Redlich J (as his Honour then was) considered an application for discharge of Mareva orders. He stated:
[T]here is a serious question to be tried and ... the plaintiff has a realistic prospect of success. In other words, the plaintiff has a good or reasonably arguable case and, in the context of this application for preservation of assets, has shown a sufficient likelihood of success.[20]
30 A 'good arguable case' has been described or treated in several cases as synonymous with a 'realistic prospect of success'.[21] For the purposes of the 2009 proceeding, I will adopt the 'good arguable case' formulation and treat it as being synonymous with a realistic prospect of success.
31 In relation to the requirement that there be a risk of absconding or dissipation of assets, in Patterson v BTR Engineering (Aust) Ltd, Gleeson CJ said that it would be undesirable for courts to endeavour to be overly precise in formulating a test for that requirement. His Honour commented that the decided cases provide ample guidance even though the language used in formulating the requirement varies across the cases.[22] I respectfully agree.
32 As has often been said, a Mareva order is a drastic remedy and its making requires a high degree of caution and care on the part of the court.[23]
33 In appropriate circumstances, a Mareva order may restrain the activities of a third party.[24]
34 The making of a Mareva order is discretionary. A wide range of discretionary factors may be relevant.
35 In relation to whether this Court can make a Mareva order in respect of foreign assets, the cases establish the following principles:
(b) Whether the assets were in the jurisdiction at the time the proceeding was commenced, or indeed have ever been within the jurisdiction, does not affect whether the court has jurisdiction to make a Mareva order or its practice in relation to such orders.[27] However, it may be relevant to the exercise of the discretion.[28]
(c) It has been said that the discretion to make a Mareva order in respect of foreign assets should be exercised with considerable circumspection and care.[29] The suggestion in one Australian case[30] that the jurisdiction should only be exercised in 'exceptional cases', which appears to broadly reflect the English position,[31] has not been followed consistently in the Australian cases dealing with the exercise of discretion. With respect, I do not accept that the discretion can only be exercised in exceptional cases. Nevertheless, as discussed shortly, I regard the present case as exceptional.
(d) The discretion will be exercised more readily after judgment.[32]
36 The above principles have, in broad terms, also been applied in relation to mandatory injunctions requiring parties to do acts with an overseas element.[33]
Nature of acts that a Mareva order can restrain or compel
37 The essence of a Mareva order is the preservation of the defendant's assets pending the hearing and determination of the proceeding against the defendant. The order is not intended to provide security for any judgment that the plaintiff may obtain against the defendant. Rather, it prevents the defendant from dissipating assets and taking them beyond the reach of the jurisdiction of the Court to satisfy any judgment that may be awarded to the plaintiff. Similarly, a Mareva order is intended to provide interlocutory rather than final relief.
38 The authorities have recognised that the precise terms of a Mareva order can be moulded to meet the circumstances of a particular case.[34] The purpose of the order is to preserve the status quo that prevailed prior to the impugned or threatened transaction (such as a sale or other disposition of property) rather than to change the position in favour of the plaintiff.[35] Generally speaking, the types of orders that can be made against a defendant are broader than the orders that can be made against a third party.
39 It has been said in some cases that the status quo is determined as at the time of the application for interlocutory relief.[36] In other cases, it has instead been said that the status quo is the state of affairs in the period immediately before the issue of the proceeding seeking a permanent injunction but that if there is unreasonable delay between the issue of the originating process and the application for an interlocutory injunction, the time is as at immediately before the application for interlocutory relief.[37] The cases cite statements made by Lord Diplock in Garden Cottage Foods Ltd v Milk Marketing Board in support of those propositions.[38]
40 However, in Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia,[39] Gaudron J referred to, among other cases, Garden Cottage and appeared to take a broader view. Her Honour said: 'As a general rule, interlocutory orders and injunctions are confined to orders maintaining the status quo at the time of the making of an application for those orders. However, that is not invariably so.'[40] Malcolm CJ in Carr Boyd Minerals Ltd v Ashton Mining Ltd also referred to Garden Cottage before commenting: 'The determination of what is, or what is not, the status quo in any given case for the purpose of considering an application for an interlocutory injunction is, in my view, a question of fact'.[41] In Walsh v Police Association, Gillard J said that 'the status quo clearly depends upon the particular circumstances' and that 'it would be unjust to the plaintiff if a defendant could by an unlawful act obtain an advantage which could not be reversed because it was the state of the circumstances immediately prior to the institution of the proceeding'.[42]
41 This issue was considered in some detail by Warren J (as her Honour then was) in Liquorland (Aust) Pty Ltd v Anghie[43] in the context of the principles applicable to an ordinary interlocutory injunction. To obtain such an injunction, the plaintiff must establish that there is a serious question to be tried and that the balance of convenience favours the grant of the injunction. Her Honour said:
Ultimately, the plaintiffs' argument was one that relied upon retention of the status quo in support of the assertion that the balance of convenience weighed in their favour. Preservation of the status quo will depend always upon a variety of considerations in any particular case. Thus, although the most usual basis for the grant of an interlocutory injunction is to preserve the circumstances that exist at the time of the application until trial it is nevertheless a factor to be weighed very carefully. The discretion as to that which constitutes the status quo and its need for protection will often warrant the exercise of a very general discretion. ...
... In my view the status quo here forms but one part of the multiple factors that may or may not invoke the general discretion. Ultimately a court will consider all factors and pursue an approach that reflects the flexible and discretionary principles that underlie the exercise of the remedy ...[44]
42 In my view, the principles discussed above about what constitutes the status quo apply equally to Mareva orders and ordinary interlocutory injunctions. It follows that the status quo is not necessarily constituted by the state of affairs in the period immediately before the filing of the writ or application, and what constitutes the status quo is a matter that must be determined based on the facts of each case and a careful and commonsense exercise of the court's discretion.
43 What is the status quo for the purposes of the 2009 proceeding is discussed later in these reasons.
Facts taken into account for the purposes of the August Order
44 The plaintiffs have relied on a number of affidavits in support of their application for the August Order. Jan Talacko has chosen not to swear any affidavit in response to the plaintiffs' affidavits even though serious allegations have been made against him and he has had an opportunity to respond since 11 June 2009. David and Paul Talacko have also not sworn any affidavit. Although they have not been formally served with any of the relevant Court documents in the 2009 proceeding, I am satisfied that they are aware of the general nature of the plaintiffs' allegations against them and that they have been avoiding service. Jan Talacko's solicitor, Michael Witt of Findlay Arthur Phillips, has sworn some affidavits on behalf of Jan Talacko but these do not address the key allegations made against him. In these circumstances, I am entitled to decide the plaintiffs' application for interlocutory relief in the nature of a Mareva order on the basis that the basic facts to which I will refer below are not contested. If and when the defendants contest these facts, the August Order can be reviewed pursuant to the liberty to apply.
45 The facts I have taken into account are set out below.
46 Jan Talacko is currently 80 years old. He remains married to Judith Talacko. They have four adult children. Nicole and Peter live in Melbourne, David lives in Prague and Paul lives in London. Paul spends part of his time in Prague.
47 Jan Talacko has Czech and Australian passports. He travels between the two countries frequently and stays in each country for extended periods. When in the Czech Republic, he lives in one of the Prague Properties. When in Australia, he lives in the Malvern property.
48 Jan and Judith Talacko acquired the Malvern property as joint proprietors on 2 July 1980. On 23 September 1998, a few days before the commencement of the 1998 proceeding, Jan Talacko executed a transfer of his interest in the Malvern property to Judith Talacko. The transfer was expressed to be 'In consideration of the marriage between the transferor and transferee'. The transfer was registered on 16 October 1998.
49 As a result of Osborn J's preliminary judgment on liability dated 24 April 2004,[45] the plaintiffs are in a stronger position than claimants who have just commenced proceedings and are yet to establish any element of their claims. In the 1998 proceeding, if the plaintiffs overcome the remaining defences, they will be awarded equitable compensation.[46]
50 If the plaintiffs' claims to be entitled to equitable compensation by reference to two-thirds of the value of the Properties and the income received from them succeed, the amount of compensation will be substantial. Although the value of the Properties has not been determined, there is some hearsay evidence that in the period 2005-2008, they were worth in excess of $36 million. It is also noteworthy that the Court of Appeal has said that even if the plaintiffs are awarded damages rather than equitable compensation, those damages will be 'of some real substance'.[47]
51 During an interlocutory hearing before Osborn J on 20 June 2008, there was discussion about whether there was any real prospect of Jan Talacko dissipating his assets. The discussion was in the context of an ex parte injunction application the plaintiffs had made in the District Court of Prague in relation to the Properties. The following exchange took place between Osborn J and Jan Talacko's senior counsel, Mr Berglund QC:
MR BERGLUND: Your Honour, if I can address the question of the spectre of disposition having been raised.
HIS HONOUR: Yes.
MR BERGLUND: The judgment and the injunction was ex parte.
HIS HONOUR: Yes.
MR BERGLUND: My client says that he had no intention of disposing of the assets, and the court said, if he has no intention. But he didn't say it to the court when the injunction was raised. It was ex parte, and - - -
HIS HONOUR: He can undertake to this court not to dispose of them. There's no - if he did that that simplifies it all.
MR BERGLUND: That's right.
HIS HONOUR: If he did that, you would say there would be no reason at all to maintain the Czech proceedings.
MR BERGLUND: No.
HIS HONOUR: Yes, I understand.
MR BERGLUND: Those are the issues, and we ought not to be diverted from the spectre of it being disposed of because it was ex parte. There was no indication that he was intending to dispose of it, they just said, well you know we just want an injunction to restraining him from doing it.
52 On 14 August 2008, the plaintiffs filed a summons seeking a freezing order under Order 37A of the Supreme Court (General Civil Procedure) Rules 2005 ('Rules') in respect of Jan Talacko's assets, including the Properties.[48] In response to this application, Jan Talacko swore an affidavit on 9 September 2008 in which he stated:
53 During the directions hearing on 11 March 2009 - being the first directions hearing I conducted in relation to the 1998 proceeding - I informed the parties that the final hearing might take place in September 2009. I also informed them that, in principle, I favoured the appointment of a special referee to value the Properties.[49]
54 On 25 March 2009, I ordered that the final hearing of the 1998 proceeding be fixed for six weeks commencing on 5 October 2009 and gave directions for the completion of interlocutory steps. In particular, Jan Talacko was ordered to complete discovery by 14 May 2009. Jan Talacko did not complete discovery by 14 May 2009 and has still not fully complied with his discovery obligations.[50]
55 On 12 May 2009, Jan, David and Paul Talacko executed in Prague:
(a) a donation agreement in respect of interests in some of the Properties in Repy;
(b) a donation agreement in respect of interests in some of the Properties in Kbely and Prague 1;
(c) a donation agreement in respect of interests in the Properties in Holesovice; and
(d) applications for change of ownership under a donation agreement in respect of the interests in the Properties referred to in (a), (b) and (c) above ('Applications for Registration').
56 On 1 June 2009, Wood AsJ, following a taxation of the plaintiffs' costs of the hearing of the preliminary issue of liability before Osborn J, ordered Jan Talacko to pay to the plaintiffs the amount of $74,919.16.[51]
57 The plaintiffs learned of the donation agreements and Applications for Registration on 10 June 2009 when Mr Hlavička made inquiries at the Real Estate Registry (also known as the Cadastral Registry) in Prague. According to Mr Hlavička's affidavit sworn on 18 June 2009:
(a) as at 10 June 2009, the Applications for Registration had been registered in relation to some of the Repy and Kbely Properties and were pending in relation to some of the other such Properties;
(b) as at 10 June 2009, the Applications for Registration in relation to the Prague 1 and Holesovice Properties had been lodged and were pending; and
(c) the Real Estate Registry is obliged by law to register an application for registration unless it is withdrawn by all the parties to the application.
58 At the scheduled directions hearing on 11 June 2009 in relation to the 1998 proceeding, the plaintiffs informed me of the donation agreements and Applications for Registration and foreshadowed an application to add David and Paul Talacko as defendants and to amend their statement of claim to raise new causes of action in relation to the donation agreements and Applications for Registration. They also sought urgent interim relief. My order of 11 June 2009 included the following Mareva orders:
59 Prior to the next scheduled directions hearing on 23 June 2009 in relation to the 1998 proceeding, the plaintiffs filed a proposed amended statement of claim alleging new causes of action against Jan, David and Paul Talacko in relation to the donation agreements and Applications for Registration. I made two orders on 23 June 2009. The first order appointed a special referee ('23 June SR Order'). That order required the plaintiffs and the defendant to pay $50,000 each into a trust account by 30 June 2009 to cover the costs of the special referee. It provided that the special referee's appointment would take effect once $100,000 was held in the trust account and required the special referee to submit his report by 31 August 2009.
60 The second order of 23 June 2009 ('23 June Interlocutory Order') contained the following relevant orders:
61 The plaintiffs paid $50,000 towards the special referee's costs as required by the 23 June SR Order. However, Jan Talacko did not do so. He also did not pay the amount of $74,919.16 to the plaintiffs by 7 July 2009 and, in accordance with the 23 June Interlocutory Order, his defence was struck out on that day.
62 On 26 June 2009, the plaintiffs' solicitors, Holding Redlich, sent separate letters by email and/or post to David, Paul, Nicole and Peter Talacko. The letters outlined the history of the 1998 proceeding, the events that had taken place concerning the Applications for Registration and the Mareva orders that had been made by this Court. The letters also stated:
We are ... writing to you to inform you that, unless you are prepared to risk being joined to [the 1998] proceeding:
Should you accept any such transfer and/or fail to reverse any such transfer from your father, our clients will pursue orders against you personally for any of the assets referred to in paragraph 2 you receive from your father, as well as interest and costs. Rest assured that although no orders have been made by a Czech court in respect of this matter, you should not take comfort in this. Our clients will take whatever steps necessary to enforce any order of the Supreme Court of Victoria against you in Australia, the United Kingdom, the Czech Republic, or elsewhere (if necessary) so that your father's attempts to prevent our clients' recovering their rightful entitlements from any judgment of the Supreme Court of Victoria are not successful.
The letters also stated that the plaintiffs were taking steps to add David and Paul Talacko as defendants to the 1998 proceeding.
63 On 26 June 2009, Jan Talacko swore an affidavit pursuant to paragraph 6 of the 23 June Interlocutory Order. In the affidavit, he said:
(a) On 12 June 2009 I telephoned both Paul Talacko and David Talacko. During those conversations I advised them of the contents of the order and asked them to agree to withdraw the applications referred to in that Order. I also told them that I would confirm the request in writing and email it to them;
(b) On 13 June 2009 I emailed a letter to both Paul Talacko and David Talacko advising them of the contents of the order and asked them to withdraw the applications referred to in that Order. Now produced and shown to me and marked "JET 1" is a true copy of the letters emailed to them;
(c) On 19 June 2009 I wrote to the Land Registry in Prague requesting that all applications for registration of the applications for the transfer of the relevant properties to Paul Talacko and David Talacko be withdrawn. Now produced and shown to me and marked "JET 2" is a true copy of this letter.
64 The email to David Talacko - part of exhibit 'JET 1' - was dated 12 June 2009 and relevantly stated: 'I have been ordered by a court in Australia to try to reverse the transfers. Please see if you can do anything to help me in this respect.' An identical email was sent to Paul Talacko.
65 The letter to the Real Estate Registry in Prague - exhibit 'JET 2' - was dated 19 June 2006. It described the Properties, the Applications for Registration and the order of 11 June 2009 and stated: 'Pursuant to that order I hereby request that all of these applications be immediately withdrawn provided that this is not contrary to Czech procedures, laws and practices'. It is not clear when this letter was received by the Real Estate Registry. It appears that it was received some time after my order of 16 July 2009 (see below).
66 The email to David Talacko - part of exhibit 'JET 3' - was dated 26 June 2009 and relevantly stated:
I have again been ordered by the Supreme Court of Victoria to "take all such steps as I am able to take to withdraw any application(s) for transfers and any documents relating to the applications or transactions that he, or his employees, agents or attorneys have lodged with the Real Estate Registry of the Capital City of Prague in the Czech Republic, or any other like Registry, in respect of any of the properties listed in Attachment A to this Order".
I therefore request that you return to me all documents you are holding in relation to these properties and that you take all steps that you can to withdraw them from the Land Registry provided it is allowable, legally permitted or not against the Czech procedures and laws.
I have already written to the Land Registry asking that the documents be withdrawn so they should need nothing more in order to complete this other than your request. I have been advised that if I do not comply with this order then I will be in contempt of Court in Victoria.
67 On or about 7 July 2009, Jan Talacko terminated Mr Witt's instructions in relation to the 1998 proceeding. Mr Witt applied for leave to file a notice of cessation to act in accordance with r 20.03(3)(b) of the Rules. The proposed notice set out Jan Talacko's Prague address as his last known address even though he had been living in the Malvern property continuously since at least 5 June 2009, when he swore his affidavit of preliminary discovery.
68 On about 9 July 2009, the plaintiffs became aware, through Mr Hlavička, that Jan Talacko's Czech attorney, Daniela Burešová, had sent a letter dated 17 June 2009 to the Real Estate Registry providing information that the Registry requested for the purpose of progressing the Applications for Registration.
69 On the morning of 13 July 2009, the plaintiffs' counsel, Mr Howells, telephoned my Associate to inquire whether I was available that afternoon to hear an ex parte application for contempt of Court by Jan Talacko and the issue of a warrant. As instructed by me, at 10.13am my Associate sent an email to Mr Howells, which he copied to Mr Witt and Julian Lane of Holding Redlich, stating:
I refer to our recent telephone discussion in which you inquired whether Justice Kyrou would be available later today to hear an ex parte application for committal in relation to contempt and relief pending committal and the issue of a warrant.
His Honour is of the view that any application should be made in the Practice Court with notice to the defendant's solicitors who still remain on the record. Justice Byrne is in the Practice Court this week.
70 Upon becoming aware of the email, Mr Witt telephoned Judith Talacko and informed her of its contents.
71 At around 1.30pm on 13 July 2009, a private investigator acting for the plaintiffs observed Jan Talacko leaving the Malvern property in a taxi carrying a medium sized suitcase. The taxi went to Tullamarine Airport. The private investigator observed Jan Talacko talking to staff at the Qantas International Departures Inquiries Desk for some time and presenting what appeared to be travel documentation. Jan Talacko then left the airport by taxi.
72 In the meantime, at 12pm, the plaintiffs had filed a summons seeking an order that Jan Talacko be dealt with for contempt on the grounds that he had breached my order of 11 June 2009 and the 23 June Interlocutory Order. The grounds relied upon by the plaintiffs included that Jan Talacko had not provided copies of the taxation documents in accordance with paragraph 11 of the 23 June Interlocutory Order and that Dr Burešová's letter of 17 June 2009 to the Real Estate Registry breached paragraph 1 of the 11 June 2009 order. The plaintiffs also obtained an arrest warrant from Bongiorno J.
73 Following discussions between Howard Rapke of Holding Redlich and Mr Witt, Jan Talacko agreed to attend before Bongiorno J on the evening of 13 July 2009. He was represented by Mr Berglund. Mr Berglund informed Bongiorno J that he was instructed that Jan Talacko had gone to the airport to meet friends who did not arrive. He also said that Jan Talacko had his Australian passport with him but his Czech passport was in Prague. Bongiorno J remanded Jan Talacko in custody to appear before Byrne J in the Practice Court the next morning.
74 When Jan Talacko was brought before Byrne J the next morning, Mr Berglund informed Byrne J that, contrary to the instructions he had received the previous day, Jan Talacko had in his possession both his Australian and Czech passports. Mr Berglund also informed Byrne J that he was instructed that Judith Talacko had telephoned Jan Talacko and told him the contents of my Associate's email while Jan Talacko was at the airport and that Dr Burešová had sent her letter of 17 June 2009 to the Real Estate Registry without Jan Talacko's knowledge or instructions.
75 Byrne J dismissed the summons because the order of 11 June 2009 did not contain an indorsement pursuant to r 66.10(3) of the Rules. However, the plaintiffs filed an identical summons ('Contempt Summons') and Jan Talacko was brought before Byrne J again in the afternoon of 14 July 2009. His Honour granted an injunction which, as varied on 15 July 2009, prevented Jan Talacko from leaving Victoria, attending any point of international departure or applying for any other passport until the conclusion of the hearing of the Contempt Summons or further order ('Injunction'). Byrne J also ordered Jan Talacko to deliver his passports to Mr Witt upon the latter undertaking not to return them to Jan Talacko unless the Court so orders or the plaintiffs so consent ('Undertaking'). For further developments in relation to the Injunction and the Undertaking, see my separate judgment of today.[52] Byrne J also ordered Jan Talacko to file and serve an affidavit by 15 July 2009 stating whether or not he had complied with the order of 11 June 2009 and the 23 June Interlocutory Order and, if not, his proposal for compliance.
76 In an affidavit sworn on 15 June 2009, Jan Talacko said that Dr Burešová sent her letter of 17 June 2009 to the Real Estate Registry without his instructions. He also said that David and Paul Talacko assisted in the preparation of his consolidated affidavit of documents sworn on 19 June 2009 in the 1998 proceeding and suggested that they would assist in providing copies of documents requested by the plaintiffs. He said further that both David and Paul Talacko came to Australia in late June 2009 to attend their sister's wedding on 5 July 2009 and left around 14 July 2009. He continued:
(a) Order 8 - payment of $50,000 - I have not complied with this order. The reason I did not comply with this order is that by the time payment of the $50,000 was due I had assessed my financial situation and having regard to the current economic crisis, particularly in Europe, I could no longer afford to run this litigation. In this regard, one of the largest tenants of the Properties has since late last year fallen many months in arrears in the payment of rent. Some other tenants are paying rent sporadically. It is necessary to carry out maintenance on the buildings which is a further drain on my financial resources. The litigation has resulted in my incurring significant expenses in defending the action and I did not believe that I could continue to fund the defence of the action and I withdrew my instructions to my solicitors to defend the proceeding. I gave these instructions believing that my defence would be struck out and that the proceeding would then no longer require any involvement or action by me. I have now engaged solicitors again for the purposes of dealing with the contempt summonses and following conferences with my advisors, if the Court so requires I will attempt to borrow money to pay the sum of $50,000.
77 On 15 July 2009, Mr Witt advised the Court that Jan Talacko had reinstated his instructions to act for him in the 1998 proceeding.
78 At the directions hearing on 16 July 2009, further discussions took place about the plaintiffs' application to add David and Paul Talacko as defendants to the 1998 proceeding and to amend their statement of claim. I expressed concerns about whether the 1998 proceeding would be ready to be heard by the scheduled date of 5 October 2009 if David and Paul Talacko were added as defendants. As a matter of case management, I raised the possibility of the new causes of action being pleaded in a new proceeding. The plaintiffs said they would consider this option and review the drafting of the new causes of action.
79 On 16 July 2009, I made an order which included the following orders:
(a) requests the Cadastral Registrar not to take any further steps to register the transfers to his sons, David Talacko and Paul Talacko, of the properties listed in the attachment to the letter; and
(b) advises that his attorney, Daniela Buresova is not authorised to take any further steps in furtherance of or for the purpose of the registration of the transfers to David Talacko and Paul Talacko of the properties listed in the attachment to the letter,
and that he:
(c) attach to the letter the document which is attachment A to this Order; and
(d) send by fax a copy of the letter to Holding Redlich by 5.00pm on 17 July 2009.
80 Jan Talacko has complied with paragraphs 4 and 5 of the above order.
81 At the directions hearing on 16 July 2009, the plaintiffs applied for an order that Jan Talacko pay the amount of $50,000 into Court within 24 hours. This is the amount Jan Talacko was required to pay into a trust account by 30 June 2009 in accordance with the 23 June SR Order. I reserved my decision on this application until the adjourned directions hearing on 17 July 2009. On that day, I ordered Jan Talacko to pay $50,000 into Court by 23 July 2009. The order contained an indorsement under r 66.10(3) of the Rules.
82 On 17 July 2009, the plaintiffs commenced the 2009 proceeding and filed a summons returnable before me on that day. By that summons, the plaintiffs applied ex parte under Order 37A of the Rules seeking freezing orders against the four defendants in respect of their worldwide assets up to an unencumbered value of $36 million. I declined to make such an order. Instead, I made the following order against David and Paul Talacko:
I gave leave to the plaintiffs to serve the order and other documents outside Australia pursuant to r 7.06 of the Rules.
83 On 23 July 2009, Jan Talacko paid $50,000 into Court. In an affidavit sworn on that day, Mr Witt stated - in the context of Jan Talacko's compliance with orders requiring him to provide copies of discovered documents located in Prague - that he had been advised by Jan, Judith, Nicole and Peter Talacko that:
David Talacko and Paul Talacko have advised that because they believe that the plaintiffs may now seek to join them as parties to Court proceedings in Australia they do not wish to take any step or do anything associated with this proceeding, including assisting with the production of documents, for fear that it may ultimately cause some prejudice to their defence of those proceedings ...
84 On 23 July 2009, the plaintiffs filed a summons returnable before me on 24 July 2009 in which they sought, amongst other things, orders that Jan, David and Paul Talacko sign documents cancelling the donation agreements and withdrawing the Applications for Registration referred to in [55] above. The documents were exhibited to an affidavit of Mr Rapke sworn on 23 July 2009 and were described in the summons as 'cancellation of deed and withdrawal of application forms'. They were apparently prepared by Mr Hlavička.
85 On 24 July 2009, I conducted directions hearings in both the 1998 and 2009 proceedings. David and Paul Talacko had not been served and did not appear in the 2009 proceeding. In the 1998 proceeding, I made an order under Order 67 of the Rules that Jan Talacko be orally examined before Daly AsJ on 6 August 2009 in respect of his failure to pay $74,919.16 to the plaintiffs in accordance with Wood AsJ's order of 1 June 2009. The order contained an indorsement under r 66.10(3) of the Rules. I also made an order amending the 23 June SR Order. The effect of the amendments was to appoint the special referee as from 24 July 2009 and to extend the timelines in the 23 June SR Order. The special referee's report is now due on 24 September 2009.
86 In the 2009 proceeding, I made an order which included the following orders:
Mareva-type orders against the Firstnamed Defendant
INDORSEMENT
TAKE NOTICE that you, JAN EMIL TALACKO, the Firstnamed Defendant in this proceeding, are served with this Order and that you are liable to imprisonment or to sequestration of your property if you disobey this Order by doing an act which this Order requires you to abstain from doing or if you refuse or neglect to do any act within the time specified in the Order for the doing of the act.
Mareva-type orders against the Secondnamed Defendant
(a) requests the Cadastral Registrar not to take any further steps to register the transfers to him of the properties listed in the attachment to the letter; and
(b) advises that no attorney, agent, employee or other person is authorised by him to take any further steps in furtherance of or for the purpose of the registration of the transfers to him of the properties listed in the attachment to the letter,
and that he:
(c) attach to the letter the document which is Attachment A to this Order; and
(d) send by fax a copy of the letter to the Plaintiffs' lawyers, Holding Redlich, on fax number +61 3 9321 9900 by 5.00pm on 31 July 2009.
INDORSEMENT
TAKE NOTICE that you, DAVID TALACKO, the Secondnamed Defendant in this proceeding, are served with this Order and that you are liable to imprisonment or to sequestration of your property if you disobey this Order by doing an act which this Order requires you to abstain from doing or if you refuse or neglect to do any act within the time specified in the Order for the doing of the act.
87 Paragraphs 6, 7 and 8 of the above order were directed to Paul Talacko and were identical to paragraphs 3, 4 and 5 which were directed to David Talacko. Paragraph 10 of the order gave leave to the plaintiffs to serve the order and certain other documents on David and Paul Talacko outside Australia pursuant to r 7.06 of the Rules. Paragraph 11 gave the plaintiffs leave to amend their statement of claim, which they did on the same day. Paragraphs 12 and 13 adjourned the plaintiffs' summonses dated 17 and 23 July 2009 to 10 August 2009.
88 In an affidavit sworn on 29 July 2009, Jan Talacko stated that he and David and Paul Talacko are the only persons who have access to his house in Prague where he has documents and that David and Paul had indicated to him that they were 'not willing to co-operate in any way with the production of documents because they have been threatened with legal proceedings by the Plaintiffs ... and they do not wish to do anything that might compromise their position in that regard'.
89 On 4 August 2009, Jan Talacko paid $74,919.16 to the plaintiffs and the oral examination scheduled for 6 August 2009 did not proceed. As a result of the payment, Jan Talacko applied for an order reinstating his defence in the 1998 proceeding. I made such an order at the directions hearing on 10 August 2009. In support of his application, Jan Talacko said the following in his affidavit of 6 August 2009:
90 On 10 August 2009, I also conducted a directions hearing in relation to the 2009 proceeding. For the purposes of the directions hearing, on about 7 August 2009 Mr Hlavička swore an affidavit in which he set out details of attempts to serve David and Paul Talacko with the writ, orders, summonses and affidavits. At the directions hearing, I was satisfied that David and Paul Talacko had been avoiding service and made an order for substituted service as set out in the order annexed to these reasons.
91 In his affidavit, Mr Hlavička set out details of his discussions with the registrar at the Real Estate Registry on 4 August 2009. He stated:
92 At the conclusion of the directions hearing on 10 August 2009, I made the August Order.
Are the requirements for a Mareva order satisfied?
93 I will now consider each of the requirements for a Mareva order together with relevant discretionary considerations.
Good arguable case against Jan, David and Paul Talacko
94 The causes of action pleaded by the plaintiffs in the amended statement of claim in the 2009 proceeding are set out in [11] above. Each cause of action is now discussed in turn.
Alleged breaches of contract, trust and fiduciary duty by Jan Talacko
95 In the amended statement of claim, the plaintiffs allege that Jan Talacko breached the Terms and committed breaches of trust and fiduciary duty.
96 The law applicable to construction of the Terms is the proper law of the contract. Where there is no express choice of law, it may be possible to infer the parties' choice from the terms of the contract and the surrounding circumstances.[53] If it is not possible to identify an express or inferred choice of law, a court will look for the system of law with which the contract has its closest and most real connection.[54] The principal considerations in this inquiry are the place of contracting, the place of performance, the place of residence or business of the parties and the nature of the subject matter of the contract.[55]
97 As the contract constituted by the Terms was made in Victoria to settle Victorian proceedings, there is a good arguable case that the Terms are governed by Victorian law.
98 The plaintiffs allege that, in addition to the express provisions of the Terms, there are also implied terms arising by operation of law to give efficacy to the express provisions of the Terms. The implied terms include:
(a) Jan Talacko must use his best endeavours, and do all things reasonable and necessary, to enable the plaintiffs to have the benefit of the Terms;
(b) Jan Talacko must not act in a manner calculated to deprive, or which deprived, the plaintiffs of the benefits they were entitled, or expecting to receive under the Terms;
(c) Jan Talacko must act as a fiduciary, and in the best interests of the plaintiffs, in discharging his obligations under cll 1 and 2 of the Terms; and
(d) Jan Talacko must not derogate from his grant in cl 1 of the Terms.
99 The plaintiffs also allege that by cll 1 and 2 of the Terms, Jan Talacko constituted himself as trustee of the Properties referred to in cl 1 of the Terms. Further, they allege that Jan Talacko has breached cll 1, 2 and 9(iii) of the Terms and all the implied terms. The critical particular of breach states:
[I]n or about May 2009 the First Defendant sought covertly, knowingly and dishonestly to transfer his interests in the Clause 6 Properties in order to deny the Plaintiffs the benefits and their entitlements under the Terms of Settlement. The First Defendant misled the Plaintiffs as to his intentions and misled the Court as to his purpose and intentions. The First Defendant entered into an agreement with the Second and Third Defendants to sign, execute and file with the Cadastral Registrar in Prague, transfers of the Clause 6 Properties for only nominal consideration. The Second to Fourth Defendants covertly, knowingly and dishonestly participated in and connived at the purpose of the First Defendant in seeking to deny the Plaintiffs the benefits and their entitlements under the Terms of Settlement. The First Defendant continues to refuse to direct the Second and Third Defendants to reinstate the Clause 6 Properties as his property and he continues to defy and evade the directions of the Court as to the conduct of the proceeding. The Second to Fourth Defendants have taken no steps to attenuate or reverse the wrongdoing of the First Defendant.
100 The plaintiffs allege that they are entitled to equitable compensation under cl 6 of the Terms. They also allege that they have suffered loss and damage and give the following particulars:
The Plaintiffs have suffered loss and damage including the costs and expenses involved in seeking to ascertain the steps taken by the First to Third Defendants in seeking to defraud them of their entitlements and the costs and expenses of seeking to avoid the transfers of the Clause 6 Properties and the reinstatement of the Clause 6 Properties as properties held by the First Defendant and the costs and expenses of this proceeding and all other incidental and consequential costs of any kind whatsoever. Further particulars will be provided prior to trial.
101 Under Victorian law, in order for a term to be implied into a contract to give business efficacy to the contract, the plaintiffs must establish the following matters, which may overlap:
(b) the term is necessary to give business efficacy to the contract;
(c) the term is so obvious that 'it goes without saying';
(e) the term does not contradict any express term of the contract.[56]
102 In my view, there is a good arguable case that the implied terms alleged by the plaintiffs apply to the Terms. The Terms were executed in the context of allegations in the 1998 proceeding that the plaintiffs were entitled to two-thirds of Jan Talacko's interests in the Properties and that Jan Talacko had committed breaches of contract, trust and fiduciary duty in relation to the Properties. There may well be evidence that it was known to the parties at the time the Terms were executed that the Properties were worth a substantial amount and that retention of the Properties by Jan Talacko was necessary for the purpose of his carrying out his obligations under the Terms either in the form of an in specie transfer in respect of the Properties referred to in cl 1 of the Terms or in the form of equitable compensation under cl 6 of the Terms. There may also be evidence that it was known to the parties at that time that if Jan Talacko disposed of his interests in the Properties, he would not be in a position to satisfy any judgment for equitable compensation under cl 6 of the Terms from his other assets.
103 Clause 9(iii) of the Terms, pursuant to which Jan Talacko warranted that 'he shall not deal with the properties the subject of [the Terms] otherwise than in accordance with [the Terms]' supports my conclusion in [102] above.
104 If the abovementioned implied terms apply, there is a good arguable case that Jan Talacko's conduct, as described earlier in these reasons, constitutes a breach of the implied terms. As some of that conduct occurred in Victoria, I am satisfied that there is a good arguable case of breach of contract against Jan Talacko.
105 In order to establish a breach of trust or fiduciary duty against Jan Talacko, the plaintiffs will have to demonstrate, in all the circumstances, that Jan Talacko held one or more of the Properties on trust for them and that he owed them fiduciary duties. Based on the matters referred to in [102] above, and Osborn J's preliminary judgment o[57]liability,57 I am satisfied that there is a good arguable case that Jan Talacko owed the plaintiffs fiduciary duties and that he breached them. It is not necessary for me to express an opinion in relation to the existence of a trust and any breach of trust.
Alleged inducement by David and Paul Talacko of breach of contract by Jan Talacko
106 In the amended statement of claim, the plaintiffs allege that David and Paul Talacko induced Jan Talacko to breach the Terms.
107 In general terms, to establish the tort of inducing a breach of contract, a plaintiff who is a party to a contract must establish that the defendant intentionally induced another party to the contract to breach the contract, that the contract was breached as a result of the inducement and that the breach caused the plaintiff to suffer loss. The relevant law of the tort of inducement of breach of contract is that of the place of the tort.[58] It has been held in England that the tort of inducing a breach of contract occurs where the actions in breach of the contract were taken, rather than where the decision to procure the breach of contract was made.[59]
108 Whilst one of the key elements of a possible breach of the Terms by Jan Talacko - namely the execution of the donation agreements and Applications for Registration - took place in Prague, the precise acts performed by David and Paul Talacko which may constitute an inducement of a breach of the Terms by Jan Talacko are unclear on the present evidence. That position may improve for the plaintiffs once further evidence becomes available to them and they may be able to establish acts constituting the tort of inducement of breach of contract in Victoria.
109 The position may well be that on the basis of the present evidence the plaintiffs cannot establish a good arguable case that David and Paul Talacko committed the tort of inducement of breach of contract in Victoria. However, that would not be fatal to the granting of a Mareva order. This is because it is well established that such an order may be granted where a good arguable case is established against one of several defendants, provided that the order is ancillary to the cause of action which has been established to the requisite standard.[60] In this case, I have already found in [104] above that the plaintiffs have established to the requisite standard a good arguable cause of action against Jan Talacko. Relief against David and Paul Talacko would be ancillary in the relevant sense.
Alleged knowing participation in breaches of trust and fiduciary duty
110 In the amended statement of claim, the plaintiffs allege that David and Paul Talacko were parties to and knowingly, directly or indirectly, participated in Jan Talacko's breaches of trust and fiduciary duty. That claim was put as a claim based on the rule in Barnes v Addy,[61] under which a person can become a constructive trustee despite being a third party to the trust.
111 There are two limbs to the rule in Barnes v Addy. The first limb is satisfied where a person has actual or constructive knowledge that a transfer of property is in breach of trust or fiduciary duty, whether the knowledge exists at the time of the transfer or subsequently, and that person receives an interest in property for his or her own benefit. The second limb is satisfied where a person knowingly assists a trustee or other fiduciary in a dishonest and fraudulent breach of trust or breach of fiduciary duty.[62]
112 In [105] above, I concluded there was a good arguable case that Jan Talacko committed a breach of fiduciary duty. It is possible, therefore, that the plaintiffs may be able to satisfy both the 'knowing receipt' and 'knowing assistance' limbs of the rule in Barnes v Addy by virtue of their execution of the donation agreements and Applications for Registration. In light of my conclusion that the plaintiffs have a good arguable case in relation to some of the other causes of action discussed already, I need not form any view on the cause of action based on the rule in Barnes v Addy.
Alleged conspiracy by Jan, David and Paul Talacko
113 In the amended statement of claim, the plaintiffs allege that Jan, David and Paul Talacko wrongfully and unlawfully conspired to defraud the plaintiffs of the benefits to which they were entitled under cll 1 and 6 of the Terms and to render nugatory the benefit to the plaintiffs of any judgment of this Court against Jan Talacko pursuant to the Terms or otherwise.
114 To establish the tort of conspiracy, it is necessary to show that there was an agreement or combination to commit either an otherwise lawful act with the predominant purpose of injuring the plaintiff, or an unlawful act with an intention (which need not be the predominant purpose) to injure the plaintiff. The agreement or combination must have been carried out and caused injury to the plaintiff. The relevant law of the tort of conspiracy is that of the place of the tort.[63]
115 The execution of the donation agreements and Applications for Registration were obviously preceded by discussions between Jan, David and Paul Talacko. At present, there is no evidence as to where those discussions took place and precisely what was discussed. It may be that prior to trial, the plaintiffs will be able to obtain evidence to establish the tort of conspiracy and that the tort was committed in Victoria. However, it is not necessary for me to decide whether the plaintiffs have a good arguable case of conspiracy against Jan, David and Paul Talacko because, even if they do not, the existence of a good arguable case in relation to some of the other causes of action discussed above is sufficient for the grant of a Mareva order.
116 In the amended statement of claim, the plaintiffs allege that Jan, David and Paul Talacko caused them loss by unlawful means. Having regard to my conclusions in relation to the other causes of action, it is not necessary for me to discuss this alleged tort.
117 By virtue of the execution of the donation agreements and Applications for Registration, Jan Talacko has sought to transfer interests in the Czech Properties to David and Paul Talacko. He has already succeeded in transferring some interests in some properties. If these transactions are fully consummated, there is an obvious risk that the Properties will not be available to satisfy any final judgment against Jan Talacko in the 1998 proceeding.
No other suitable remedy and what constitutes the 'status quo' in this case
118 In light of the fact that some interests in some of the Properties have already been transferred by Jan Talacko to David and Paul Talacko and the transfer of other interests is imminent,[64] it is necessary to cancel or withdraw the underlying documents which have brought about this situation. Those documents are the donation agreements and Applications for Registration. Anything short of this type of relief runs the risk of the Properties becoming permanently beyond the reach of any judgment of this Court. A mere withdrawal of the donation agreements would not preclude their re-submission.
119 I am satisfied that the 'status quo' for the purposes of this case should not be regarded as the time the plaintiffs commenced the 2009 proceeding on 17 July 2009 or when they sought a Mareva order on 11 June 2009 in the 1998 proceeding. Rather, the status quo should be regarded as the time of the plaintiffs' first application for a Mareva order on 14 August 2008. The plaintiffs did not pursue that application in light of Jan Talacko's unequivocal statements on oath that he had no intention of disposing of any of the Properties.[65] Jan Talacko did not give them any indication of a change in his position prior to the execution of the donation agreements and Applications for Registration on 12 May 2009.
120 Whilst, ordinarily, a Mareva order is prohibitive in nature in the sense that it prevents further steps being taken, in an appropriate case such as this, the order can extend further to reverse an impugned transaction for the purposes of preserving the status quo as at the time selected by the Court. Accordingly, I am of the opinion that the fact that some of the interests in some of the Properties have already been transferred to David and Paul Talacko does not preclude this Court from making an order having the effect of reversing those transfers.
121 If the transfers of the Czech Properties that are pending are registered and those that have been registered are not reversed, there is a real risk that those Properties will become permanently beyond the reach of any judgment of this Court. Neither Jan, David nor Paul Talacko has given any evidence about any prejudice to them arising from the making of the August Order. It may be supposed that if the plaintiffs are ultimately unsuccessful, Jan, David and Paul Talacko will be able to execute fresh donation agreements and Applications for Registration. If they incur any costs in doing so, the plaintiffs will have to meet them in accordance with the usual undertaking they have given to the Court.
122 In these circumstances, the balance of convenience strongly favours the making of the August Order.
Preservation of no more assets than is reasonable
123 As I mentioned earlier in these reasons, the plaintiffs claim equitable compensation by reference to two-thirds of the value of the Properties and income earned by Jan Talacko on those Properties. In respect of some of the Properties, income has been earned since 1992. An issue that will need to be resolved in the 1998 proceeding is the time at which the value of the Properties is to be determined: is it the date of final judgment, the date of Osborn J's preliminary judgment on liability on 24 April 2008 or some other date?
124 The value of the Properties at various times and the income earned from those Properties are currently not known, largely because of delays by Jan Talacko in complying with orders of this Court in the 1998 proceeding. As the Court has no basis for selecting some of the Properties only for preservation, it is appropriate that all of the Properties be preserved.
125 At [35](c) above, I stated that the Court's power to grant a Mareva order in respect of overseas assets is not confined to exceptional cases. I also stated that, in any event, the circumstances of this case are exceptional.
126 The exceptional circumstances of this case include the following:
(a) The events giving rise to the 1998 and 2009 proceedings date back to 1990 and relate to the Properties. The parties to the 1998 proceeding have been litigating the issue of their respective entitlements to the Properties since 1998. The parties reached an agreement about division of the Properties in 2001 - in the form of the Terms - and Jan Talacko breached that agreement.[66]
(b) The plaintiffs have the benefit of a preliminary judgment on liability.[67]
(c) On 20 June 2008, senior counsel for Jan Talacko informed Osborn J that Jan Talacko had no intention of disposing of the Properties.[68]
(d) On 9 September 2008, Jan Talacko stated unequivocally on oath that he had no intention of disposing of the Properties. He did so for the purpose of resisting an application for a Mareva order. Following his evidence, the plaintiffs did not persist with the application.[69]
(e) Jan Talacko did not give the plaintiffs any notice of a change in his position prior to the execution of the donation agreements and Applications for Registration.
(f) Jan and Judith Talacko have four adult children, two of whom reside in Melbourne and two of whom reside overseas. In light of the fact that the whole family attended one of the Melbourne-based children's wedding on 5 July 2009,[70] it appears that Jan Talacko is on good terms with all of his children. Yet, he chose to transfer interests in some of the Properties solely to the two children living overseas. He has not explained on oath why he chose those children. It is clear, however, that his choice to transfer interests in the Properties to his overseas-based children, if successfully consummated, would make it more difficult for the plaintiffs to have access to those Properties to satisfy any final judgment of this Court against him.
(g) Jan Talacko was willing to allow the 1998 proceeding to continue undefended, he did not comply with some of his outstanding obligations under orders of this Court and more recently he has had a change of position regarding these matters.[71]
(h) Jan Talacko gave inconsistent accounts, through his counsel, regarding the whereabouts of his Czech passport.[72]
(i) There is an unexplained inconsistency between the evidence of the private investigator that on 13 July 2009, Jan Talacko attended the Qantas International Departures Inquiries Desk, and Jan Talacko's account, through his counsel, that he visited the airport to meet friends who did not arrive.[73]
(j) Jan Talacko's initial acts in complying with paragraph 2 of the order of 11 June 2009 were inadequate, particularly the following statement to David and Paul Talacko on 12 June 2009: 'I have been ordered by a court in Australia to try to reverse the transfers. Please see if you can do anything to help me in this respect'.[74]
(k) The non-receipt of Jan Talacko's letter of 19 June 2009 to the Real Estate Registry in Prague by that Registry within a reasonable time after that date is unexplained.[75]
The plaintiffs' pursuit of parallel proceedings in the Czech Republic
127 In addition to the 1998 proceeding, the plaintiffs also commenced proceedings in the District Court of Prague. These proceedings are discussed in a ruling made by Osborn J on 26 June 2008 and the judgment of the Court of Appeal.[76] Jan Talacko applied for a stay of the 1998 proceeding due to the existence of the Czech proceedings. As a result of the plaintiffs giving undertakings to the Court to the effect that they would not take any further steps in the Czech proceedings, the application for a stay was refused.
128 A further application for a stay was heard by me on 11 March 2009. As a result of further undertakings from the plaintiffs, I dismissed the application.[77]
129 In my order of 11 June 2009, in addition to granting a Mareva order, I partially released the plaintiffs from their undertakings to the Court to enable them to seek Mareva-type relief in the Czech Republic. This partial release has been extended in subsequent orders including the August Order.
130 Mr Witt swore affidavits on 7 and 10 August 2009 in which he set out information he had received from Dr Burešová through Jan Talacko about the nature of the proceedings that the plaintiffs have undertaken in the Czech Republic since 11 June 2009 without notice to Jan Talacko.[78] The affidavits exhibited various documents relating to the Czech proceedings. Before me on 10 August 2009, Mr Williams, who appeared for Jan Talacko, submitted that the plaintiffs had gone beyond what I had permitted when I partially released them from their undertakings. He also submitted that the plaintiffs' election to pursue proceedings in the Czech Republic should be taken into account by me in the exercise of my discretion.
131 I have read the English versions of the documents exhibited to Mr Witt's affidavits. I am not satisfied that the plaintiffs have breached their undertakings. Nor am I satisfied that the plaintiffs' actions, as disclosed by the documents, raise discretionary considerations which warrant refusal of the Mareva relief sought against Jan, David and Paul Talacko. On the contrary, the discretionary considerations, overall, are overwhelmingly in favour of the granting of such relief in the form set out in the August Order.
HELENA MARIE TALCKO (BY HER LITIGATION GUARDIAN JAN TALACKO) and others
At the adjourned hearings of the Plaintiffs' summonses filed on 17 July 2009 and 23 July 2009.
Mr D. J. Williams of Counsel, for the Firstnamed Defendant.
There was no appearance by the Second, Third and Fourthnamed Defendants.
(a) the Firstnamed Defendant shall have sustained any damages by reason of paragraph 1, 2 and 3 of this Order;
(b) the Secondnamed Defendant shall have sustained any damages by reason of paragraph 6, 7, 8 and 9 of this Order;
(c) the Thirdnamed Defendant shall have sustained any damages by reason of paragraph 10, 11, 12 and 13 of this Order,
Mareva-type orders against the Firstnamed Defendant
1. Until the hearing and determination of proceeding 7393 of 1998 or further order, the Firstnamed Defendant, 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 to this Order or any interest in those properties.
2. Until the hearing and determination of proceeding 7393 of 1998 or further order, the Firstnamed Defendant, Jan Emil Talacko, take all such steps as he is able to take to withdraw any application(s) for transfers and any documents relating to applications or transactions that he, or his employees, agents or attorneys have lodged with the Real Estate Registry of the Capital City of Prague in the Czech Republic, or any other like Registry, in respect of any of the properties listed in Attachment A to this Order or any interest in those properties.
3. By 4.15pm on 12 August 2009, the Firstnamed Defendant complete and sign three sets of the cancellation of deed and withdrawal of application forms exhibited to the affidavit of Howard Rapke sworn on 23 July 2009 and file and serve one set on the Cadastral Registrar in Prague and the solicitors for the Plaintiffs, and forward one set to the Secondnamed Defendant and one set to the Thirdnamed Defendant requesting that they complete and sign the relevant set and forward that set to the Cadastral Registrar in Prague. For the purposes of this paragraph 3, the set that is served on the solicitors for the Plaintiffs shall be a copy of the set filed with the Cadastral Registrar in Prague.
4. By 4.15pm on 12 August 2009, the Firstnamed Defendant, Jan Emil Talacko:
(a) communicate by telephone with the Second and Thirdnamed Defendants and read out to them this Order; and
(b) file and serve an affidavit verifying compliance with paragraph 4 of this Order.
5. By 4.15pm on 12 August 2009, the Firstnamed Defendant, Jan Emil Talacko:
(a) send to the Second and Thirdnamed Defendants by email or fax copies of:
(ii) the amended statement of claim in this proceeding;
(iii) the Orders dated 17 July 2009, 24 July 2009 and today in this proceeding; and
(iv) the affidavit of Howard Rapke sworn on 23 July 2009 and the exhibits to that affidavit; and
(b) file and serve an affidavit verifying compliance with paragraph 5 of this Order.
TAKE NOTICE that you, JAN EMIL TALACKO, the Firstnamed Defendant in this proceeding, are served with this Order and that you are liable to imprisonment or to sequestration of your property if you disobey this Order by doing an act which this Order requires you to abstain from doing or if you refuse or neglect to do any act within the time specified in the Order for the doing of the act.
Mareva-type orders against the Secondnamed Defendant
6. Until 4.15pm on 21 August 2009 or further order, the Secondnamed Defendant, David 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 the registration of the transfers to him of the properties listed in Attachment A to this Order or any interest in those properties.
7. The Secondnamed Defendant, David Talacko, send a letter to the Cadastral Registrar in Prague both by post and by fax by 5.00pm on 14 August 2009 in which he:
(a) requests the Cadastral Registrar not to take any further steps to register the transfers to him of the properties listed in the attachment to the letter; and
(b) advises that no attorney, agent, employee or other person is authorised by him to take any further steps in furtherance of or for the purpose of the registration of the transfers to him of the properties listed in the attachment to the letter,
(c) attach to the letter the document which is Attachment A to this Order; and
(d) send by fax a copy of the letter to the Plaintiffs' lawyers, Holding Redlich, on fax number +61 3 9321 9900 by 5.00pm on 14 August 2009.
8. Until 4.15pm on 21 August 2009 or further order, the Secondnamed Defendant, David Talacko, be restrained, whether by himself or by his employees, agents or attorneys, from selling, transferring, donating or otherwise dealing with any of the properties listed in Attachment A to this Order or any interest in those properties.
9. By 4.15pm on 19 August 2009, the Secondnamed Defendant, David Talacko, complete and sign the cancellation of deed and withdrawal of application forms exhibited to the affidavit of Howard Rapke sworn on 23 July 2009 and file and serve them on the Cadastral Registrar in Prague and the solicitors for the Plaintiffs. For the purposes of this paragraph 9:
(a) if by 19 August 2009, the Secondnamed Defendant receives a set of the cancellation of deed and withdrawal of application forms from the Firstnamed Defendant duly signed by him, the Secondnamed Defendant shall complete and sign that set and file and serve that set on the Cadastral Registrar in Prague and the solicitors for the Plaintiffs;
(b) if by 19 August 2009, the Secondnamed Defendant does not receive a set of the cancellation of deed and withdrawal of application forms from the Firstnamed Defendant duly signed by him, the Secondnamed Defendant shall complete and sign a clean set of those documents as exhibited to the affidavit of Howard Rapke sworn on 23 July 2009 and file and serve that set on the Cadastral Registrar in Prague and the solicitors for the Plaintiffs; and
(c) the set that is served on the solicitors for the Plaintiffs shall be a copy of the set filed with the Cadastral Registrar in Prague.
TAKE NOTICE that you, DAVID TALACKO, the Secondnamed Defendant in this proceeding, are served with this Order and that you are liable to imprisonment or to sequestration of your property if you disobey this Order by doing an act which this Order requires you to abstain from doing or if you refuse or neglect to do any act within the time specified in the Order for the doing of the act.
Mareva-type orders against the Thirdnamed Defendant
10. Until 4.15pm on 21 August 2009 or further order, the Thirdnamed Defendant, Paul Anthony 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 the registration of the transfers to him of the properties listed in Attachment A to this Order or any interest in those properties.
11. The Thirdnamed Defendant, Paul Anthony Talacko, send a letter to the Cadastral Registrar in Prague both by post and by fax by 5.00pm on 14 August 2009 in which he:
(a) requests the Cadastral Registrar not to take any further steps to register the transfers to him of the properties listed in the attachment to the letter; and
(b) advises that no attorney, agent, employee or other person is authorised by him to take any further steps in furtherance of or for the purpose of the registration of the transfers to him of the properties listed in the attachment to the letter,
(c) attach to the letter the document which is Attachment A to this Order; and
(d) send by fax a copy of the letter to the Plaintiffs' lawyers, Holding Redlich, on fax number +61 3 9321 9900 by 5.00pm on 14 August 2009.
12. Until 4.15pm on 21 August 2009 or further order, the Thirdnamed Defendant, Paul Anthony Talacko, be restrained, whether by himself or by his employees, agents or attorneys, from selling, transferring, donating or otherwise dealing with any of the properties listed in Attachment A to this Order or any interest in those properties.
13. By 4.15pm on 19 August 2009, the Thirdnamed Defendant, Paul Anthony Talacko, complete and sign the cancellation of deed and withdrawal of application forms exhibited to the affidavit of Howard Rapke sworn on 23 July 2009 and file and serve them on the Cadastral Registrar in Prague and the solicitors for the Plaintiffs. For the purposes of this paragraph 13:
(a) if by 19 August 2009, the Thirdnamed Defendant receives a set of the cancellation of deed and withdrawal of application forms from the Firstnamed Defendant duly signed by him, the Thirdnamed Defendant shall complete and sign that set and file and serve that set on the Cadastral Registrar in Prague and the solicitors for the Plaintiffs;
(b) if by 19 August 2009, the Thirdnamed Defendant does not receive a set of the cancellation of deed and withdrawal of application forms from the Firstnamed Defendant duly signed by him, the Thirdnamed Defendant shall complete and sign a clean set of those documents as exhibited to the affidavit of Howard Rapke sworn on 23 July 2009 and file and serve that set on the Cadastral Registrar in Prague and the solicitors for the Plaintiffs; and
(c) the set that is served on the solicitors for the Plaintiffs shall be a copy of the set filed with the Cadastral Registrar in Prague.
TAKE NOTICE that you, PAUL ANTHONY TALACKO, the Thirdnamed Defendant in this proceeding, are served with this Order and that you are liable to imprisonment or to sequestration of your property if you disobey this Order by doing an act which this Order requires you to abstain from doing or if you refuse or neglect to do any act within the time specified in the Order for the doing of the act.
Partial release of Plaintiffs from their undertakings in proceeding 7393 of 1998
14. Until 4.15pm on 21 August 2009 or further order, the Plaintiffs are relieved from the most recent Undertakings filed with the Court in proceeding 7393 of 1998, namely:
(a) Undertaking of Jan Talacko (as litigation guardian for Helena Marie Talacko) dated 26 March 2009;
(b) Undertaking of Alexandra Bennett dated 14 May 2009;
(c) Undertaking of Martin Talacko dated 27 March 2009;
(d) Undertaking of Rowena Talacko dated 27 March 2009; and
(e) Undertaking of Margaret Helen Beatrice Talacko dated 14 May 2009,
but only in so far as is necessary for them to make an application and have that application heard in the District Court of Prague seeking similar orders to those in paragraphs 1 to 13 (both inclusive) of this Order in the Czech Republic and any appeal against the refusal of such an application.
15. In lieu of personal service of any document on the Secondnamed Defendant, David Talacko, the Plaintiffs have leave to serve him by one of the following means:
(a) by posting the relevant document to him at Rybna Street 29, Prague 1, Czech Republic;
(b) by delivering the relevant document to him at Rybna Street 29, Prague 1, Czech Republic;
(c) by posting the relevant document to Mr Robert Zelenka at Jiriho z Podebrad 583/28 in Ceska Lipa, Czech Republic;
(d) by delivering the relevant document to Mr Robert Zelenka at Jiriho z Podebrad 583/28 in Ceska Lipa, Czech Republic;
(e) by posting the relevant document to Mr Robert Zelenka at Hastalska Street 760/27, Prague 1, Czech Republic; and
(f) by delivering the relevant document to Mr Robert Zelenka at Hastalska Street 760/27, Prague 1, Czech Republic.
16. In lieu of personal service of any document on the Thirdnamed Defendant, Paul Anthony Talacko, the Plaintiffs have leave to serve him by one of the following means:
(a) by posting the relevant document to him at Hastalska Street 15, Prague 1, Czech Republic;
(b) by delivering the relevant document to him at Hastalska Street 15, Prague 1, Czech Republic;
(c) by posting the relevant document to Mr Robert Zelenka at Jiriho z Podebrad 583/28 in Ceska Lipa, Czech Republic;
(d) by delivering the relevant document to Mr Robert Zelenka at Jiriho z Podebrad 583/28 in Ceska Lipa, Czech Republic;
(e) by posting the relevant document to Mr Robert Zelenka at Hastalska Street 760/27, Prague 1, Czech Republic; and
(f) by delivering the relevant document to Mr Robert Zelenka at Hastalska Street 760/27, Prague 1, Czech Republic.
17. The Plaintiffs have leave to serve the Second and Thirdnamed Defendants outside of Australia of the following:
(a) the affidavit of Howard Roger Rapke sworn 7 August 2009;
18. The Plaintiffs' summons filed on 23 July 2009 be adjourned to 10.30am on 21 August 2009 before Justice Kyrou.
19. The Plaintiffs' summons filed on 17 July 2009 be adjourned to 10.30am on 21 August 2009 before Justice Kyrou.
22. This order be signed by the Judge pursuant to Rule 60.04 of the Supreme Court (General Civil Procedure) Rules 2005.
(a) Hastalska 15 and building on land lot 860, Prague 1;
(b) 11 Melantrichova and building on land lot 425, Prague 1;
(c) Ramova 8 and building on land lot 821, Prague 1;
(d) Rybna 29 and building on land lot 832, Prague 1; and
(e) Hastalska 12 and building on land lot 823, Prague 1.
Being land lots 309/1, 309/2 and 310 located at Kollarova Street, Holesovice, Prague, Czech Republic.
Being 17.44 hectares of land located at Repy, Prague, Czech Republic, including the property more particularly described and outlined in paragraph 2(8) of the Plaintiffs' Particulars of the Properties in Respect of which and the basis upon which Equitable Compensation is Sought dated 20 June 2008.
Being land lots 1964/2 and 1965/4 located at Kbely, Prague, Czech Republic, as outlined in paragraph 2(7) of the Plaintiffs' Particulars of the Properties in Respect of which and the Basis upon which Equitable Compensation is Sought dated 20 June 2008.
Being 360 hectares of forest land located near Sucha, Slovakia, as outlined in paragraph 2(9) of the Plaintiffs' Particulars of the Properties in Respect of which and the basis upon which Equitable Compensation is Sought dated 20 June 2008.
Being the land and an apartment building at Kiefernstrasse 19 and Kiefernstrasse 19b, Dresden, Germany.
HELENA MARIE TALCKO (BY HER LITIGATION GUARDIAN JAN TALACKO)
[1] All errors are in the original hand written Terms.
[2] Talacko v Talacko [2008] VSC 128.
[3] The outstanding defences include that cl 6 of the Terms is a penalty or is uncertain.
[5] Penn v Lord Baltimore [1750] EngR 99; (1750) 1 Ves Sen 444. See P Nygh and M Davies, Conflict of Laws in Australia (7th ed, 2002) [7.37] ('Nygh').
[9] Cardile v LED Builders Pty Ltd (1999) 198 CLR 380, 393 [25], 399 [40] ('Cardile').
[10] Cardile (1999) 198 CLR 380, 403 [50].
[11] Cardile (1999) 198 CLR 380, 399 [40].
[12] Pearce v Waterhouse [1986] VicRp 57; [1986] VR 603, 607; Glenwood Management Group Pty Ltd v Mayo [1991] VicRp 45; [1991] 2 VR 49, 54; Danlay Pty Ltd v Medlane Ltd [1999] VSC 264, [16] ('Danlay'); Karadimas v H & P Solopitias Pty Ltd (2001) V ConvR 54-638; [2000] VSC 392, [16] ('Karadimas'); Liquorland (Aust) Pty Ltd v Anghie [2001] VSC 362, [59] ('Liquorland'); Goldstraw v Goldstraw (2006) V ConvR 54-712; [2002] VSC 491, [53] ('Goldstraw'); Victoria University of Technology v Wilson [2003] VSC 299, [24]; Bayley Walk Pty Ltd v Bayley Views Pty Ltd [2006] VSC 213, [26]-[41]; Robmatjus Pty Ltd v Violet Home Loans Australia Pty Ltd [2007] VSC 165, [67] ('Robmatjus'); Zhen v Mo [2008] VSC 300, [27] ('Zhen').
[13] Cardile (1999) 198 CLR 380, 409 [70]; Barclay-Johnson v Yuill [1980] 3 All ER 190.
[14] (1999) 198 CLR 380, 408 [68].
[15] See, eg, Jetset Tours Pty Ltd v Leibler [1999] VSC 265, [19]; Goldstraw (2006) V ConvR 54-712; [2002] VSC 491, [53]; Clearwater Shipping Corporation Inc v Cao [2003] VSC 216, [5]; Amaral v Algar [2003] VSC 246, [13] (also referring to 'strong arguable case', seemingly synonymously with 'good arguable case': at [50]); Liquorland [2001] VSC 362, [59] (but see generally at [58]-[61]); Huynh v Phan [2004] VSC 151, [7], [13] (also referring to 'arguable case', seemingly synonymously with 'good arguable case': at [15]); Bunnings Pty Ltd v McMillin [2005] VSC 131, [3]; Beiser v Topoljski (2007) V ConvR 54-729; [2006] VSC 415, [31]; Robmatjus [2007] VSC 165, [53]; Zhen [2008] VSC 300, [34], [38] (also referring to 'arguable case', seemingly synonymously with 'good arguable case': at [26]). In Karadimas (2001) V ConvR 54-638; [2000] VSC 392, Eames J was satisfied that there was an 'arguable case': at [16].
[16] Price v Price [2000] VSC 389, [3]; Westpac Banking Corporation v Hilliard [2001] VSC 187, [37].
[17] Myer Stores Pty Ltd v Conforto [2000] VSC 382, [6].
[18] [1999] VSC 264, [13]-[14].
[20] [2003] VSC 299, [23]. Redlich J also commented at other points in the judgment: 'I must be satisfied before continuing these injunctions, that there is a serious question to be tried' (at [16]), and 'To maintain a Mareva or asset preservation order ... a plaintiff must show that it has a good arguable cause of action' (at [24]).
[21] Liquorland [2001] VSC 362, [59]; Goldstraw (2006) V ConvR 54-712; [2002] VSC 491, [53]; Wilson [2003] VSC 299, [23].
[22] (1989) 18 NSWLR 319, 323-4.
[23] Cardile (1999) 198 CLR 380, 403-4 [50]-[51].
[24] In Cardile (1999) 198 CLR 380, 405-6 [57] (citation omitted), the High Court said:
What then is the principle to guide the courts in determining whether to grant Mareva relief in a case such as the present where the activities of third parties are the object sought to be restrained? In our opinion such an order may, and we emphasise the word "may", be appropriate, assuming the existence of other relevant criteria and discretionary factors, in circumstances in which: (i) the third party holds, is using, or has exercised or is exercising a power of disposition over, or is otherwise in possession of, assets, including "claims and expectancies", of the judgment debtor or potential judgment debtor; or (ii) some process, ultimately enforceable by the courts, is or may be available to the judgment creditor as a consequence of a judgment against that actual or potential judgment debtor, pursuant to which, whether by appointment of a liquidator, trustee in bankruptcy, receiver or otherwise, the third party may be obliged to disgorge property or otherwise contribute to the funds or property of the judgment debtor to help satisfy the judgment against the judgment debtor.
[25] Ballabil Holdings Pty Ltd v Hospital Products Ltd (1985) 1 NSWLR 155 ('Ballabil'); Coombs v Dynasty Pty Ltd (1986) 42 SASR 413; National Australia Bank Ltd v Dessau [1988] VicRp 58; [1988] VR 521 ('Dessau'); Planet International Ltd (In Liq) v Garcia [1989] 2 Qd R 427 ('Garcia'); Betta Cones Co Pty Ltd v Microbyte Investments Pty Ltd (Unreported, Supreme Court of Victoria, Gobbo J, 22 September 1993); Commissioner of State Taxation (WA) v Mechold Pty Ltd (1995) 95 ATC 4053, 4,058 ('Mechold'); DFC of T v Hickey (1996) 96 ATC 4892, 4,894; FC of T v Karageorge (1996) 96 ATC 5114, 5,120 ('Karageorge'); OZ-US Film Productions Pty Ltd v Heath [2000] NSWSC 967, [23]; Southern Equities Corporation Ltd v Bond [2000] SASC 318, [14] ('Bond'); Islamic Co-Ordinating Council of Victoria v Chawk [2001] VSC 414, [16] ('Chawk'). Contra Brereton v Milstein [1988] VicRp 57; [1988] VR 508, 516, 520 ('Brereton'). See also Re Clunies Ross; Ex parte Totterdell (1987) 72 ALR 241, 245-6; Walter Rau Neusser Oel und Fett AG v Cross Pacific Trading Ltd [2005] FCA 399, [1]-[5].
[26] Dessau [1988] VicRp 58; [1988] VR 521. In Brereton [1988] VicRp 57; [1988] VR 508, 516, 520, Murphy J held that a Mareva order should not go to foreign assets. That decision was expressly disagreed with by Brooking J in Dessau. In my view, the result in Dessau is much more in line with subsequent authority than that in Brereton.
[27] Dessau [1988] VicRp 58; [1988] VR 521, 527; Garcia [1989] 2 Qd R 427; Mechold (1995) 95 ATC 4053, 4,058; Bond [2000] SASC 318, [14]; Chawk [2001] VSC 414, [16]. Compare Ballabil (1985) 1 NSWLR 155, 164, where this was expressly left open.
[28] Ballabil (1985) 1 NSWLR 155, 164, 165; Dessau [1988] VicRp 58; [1988] VR 521, 527.
[29] Yandil Holdings Pty Ltd v Insurance Co of North America (1986) 7 NSWLR 571, 574-5; Mechold (1995) 95 ATC 4053, 4,057.
[30] Karageorge (1996) 96 ATC 5114, 5,120-1, referring to Derby & Co Ltd v Weldon (No 3 & 4) [1990] Ch 65.
[31] See Dicey, Morris and Collins on the Conflict of Laws (14th ed, 2006) vol 1 [8-011]-[8-020], esp at [8-014]. Compare P Biscoe, Freezing and Search Orders: Mareva and Anton Piller Orders (2nd ed, 2008) [5.41], who states that in England courts now ask whether it is 'inexpedient' to grant relief.
[32] Mechold (1995) 95 ATC 4053, 4,057.
[33] Australian Competition and Consumer Commission v Purple Harmony Plates Pty Ltd (No 3) [2002] FCA 1487; (2002) 196 ALR 576; Australian Competition and Consumer Commission v Chen [2003] FCA 897; (2003) 132 FCR 309; Australian Prudential Regulation Authority v Siminton (No 7) [2007] FCA 1609.
[34] Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia [1998] HCA 30; (1998) 195 CLR 1, 32-3 [35]; Cardile (1999) 198 CLR 380, 399-401 [41].
[35] Cardile (1999) 198 CLR 380, 403-4 [51], referring to Frigo v Culhaci (Unreported, New South Wales Court of Appeal, Mason P, Sheller JA and Sheppard AJA, 17 July 1998) 10-11.
[36] Commissioner for Fair Trading v Voulon [2005] WASC 229, [51]; Remrose Pty Ltd v Allsilver Holdings Pty Ltd [2005] WASC 251; (2005) 225 ALR 588, 608 [119]; Markopoulos v Wedlock [2008] WASC 3, [61].
[37] Ward v Western Australia [1995] FCA 1781, [10]-[17]; Tegra (NSW) Pty Ltd v Gundagai Shire Council (2007) 160 LGERA 1; [2007] NSWLEC 806, [3].
[38] [1984] AC 130, 140 ('Garden Cottage').
[40] [1998] HCA 30; (1998) 195 CLR 1, 59 [119] (citations omitted).
[41] (1989) 15 ACLR 599, 605.
[42] (2000) 140 IR 58; [2000] VSC 292, [58].
[44] [2001] VSC 362, [72], [74].
[47] Talacko v Talacko [2008] VSCA 229, [44], [55].
[48] A freezing order was also sought against Judith Talacko in respect of the Malvern property.
[49] Talacko v Talacko [2009] VSC 98, [25], [26].
[50] Talacko v Talacko [2009] VSC 348.
[51] The amount of $74,919.16 comprised an interim amount of $70,196.66 in respect of the hearing of the preliminary issue of liability and a further amount of $4,722.50 pursuant to separate orders of Osborn J.
[52] Talacko v Talacko [2009] VSC 348.
[53] Akai Pty Ltd v People's Insurance Co Ltd (1996) 188 CLR 418.
[54] Bonython v Commonwealth [1950] UKPCHCA 3; (1950) 81 CLR 486; [1951] AC 201.
[55] Re United Railways of the Havana and Regla Warehouses Ltd [1960] Ch 52, 91.
[56] BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266, 283.
[57] Talacko v Talacko [2008] VSC 128.
[58] Regie Nationale des Usines Renault SA v Zhang [2002] HCA 10; (2002) 210 CLR 491 ('Zhang').
[59] Metall und Rohstoff AG v Donaldson Lufkin & Jenrette Inc [1990] 1 QB 391.
[60] TSB Private Bank International SA v Chabra [1992] 2 All ER 245, 255-6; Mercantile Group (Europe) AG v Aiyela [1994] QB 366, 376. See also Gibb Australia Pty Ltd v Cremor Pty Ltd (1992) 106 FLR 453, 455-7.
[62] Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; (2007) 230 CLR 89.
[63] Zhang [2002] HCA 10; (2002) 210 CLR 491.
[66] Talacko v Talacko [2008] VSC 128.
[67] Talacko v Talacko [2008] VSC 128.
[71] See [76] and [89] above and Talacko v Talacko [2009] VSC 348.
[76] Talacko v Talacko [2008] VSCA 229, [51]-[62].
[77] Talacko v Talacko [2009] VSC 98, [14]-[21].
[78] I note that in his affidavit of 23 June 2009 in the 1998 proceeding, Mr Lane disclosed that Mr Hlavička had filed a petition in the District Court of Prague seeking to restrain Jan Talacko from dealing with the Properties.
Talacko & Ors
Talacko &Ors [2009] VSC 349
(1999) 198 CLR 380
(1989) 18 NSWLR 319
(1985) 1 NSWLR 155
(1986) 42 SASR 413
(1987) 72 ALR 241
(1986) 7 NSWLR 571
(2002) 196 ALR 576
(2003) 132 FCR 309
(1998) 195 CLR 1
(2005) 225 ALR 588
(2007) 160 LGERA 1
(2000) 140 IR 58
(1996) 188 CLR 418
(1950) 81 CLR 486
(1977) 180 CLR 266
(2002) 210 CLR 491
(1992) 106 FLR 453
(2007) 230 CLR 89