SCHEDULE A
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION VID 201 of 2010
IN THE MATTER OF JAN EMIL TALACKO, A DEBTOR
HELENA MARIE TALACKO
ALEXANDRA ANN BENNETT
MARTIN THORBURN JAN TALACKO
ROWENA KIRSTEN EVE TALACKO
MARGARET HELEN BEATRICE TALACKO
Applicants for Interim Order
and
JAN EMIL TALACKO
Respondent for Interim Order
SPECIAL CASE STATED FOR THE CONSIDERATION OF THE FULL COURT
1. The respondent is a citizen of Australia and holds a current Australian passport and a current Czech passport.
2. The respondent is a judgment debtor of the applicants by reason of the judgment of Kyrou J in the Supreme Court of Victoria on 11 December 2009 in proceedings numbered 7393 of 1998, that:
(i) The defendant [the respondent herein] pay to the firstnamed plaintiff [the first applicant herein]:
(a) €4,740,830.00; and
(b) €296,079.00 by way of interest.
(ii) The defendant [the respondent herein] pay to the secondnamed to fifthnamed Plaintiffs [the second to fifth applicants herein]:
(a) €4,740,830.00; and
(b) €296,079.00 by way of interest.
(iii) The defendant [the respondent herein] pay the plaintiffs' [the applicants herein] costs of the proceeding since it was reinstated on 8 July 2005, including reserved costs, on an indemnity basis. Any payments already made pursuant to previous costs orders are to be treated as payments on account of the costs due under this judgment and are to be set-off accordingly. Any costs incurred by the defendant in any taxation of costs on a party and party basis that are thrown away by reason of costs being awarded on an indemnity basis must also be set‑off against any amount assessed on an indemnity basis.
3. The respondent is prosecuting an appeal from the judgment of Kyrou J in the Court of Appeal of the Supreme Court of Victoria, subject to a pending application for security for costs.
4. On 1 March 2010 bankruptcy notices VN 403/2010 and VN 404/2010 were issued against the respondent by the Official Receiver and served on the respondent on 3 March 2010. In bankruptcy notice VN 403/2010 the first applicant claimed that the respondent owed her a debt of $7,569,482.50. In bankruptcy notice VN 404/2010 the second, third, fourth and fifth applicants claimed that the respondent owed them a debt of $7,569,482.50
5. On 4 March 2010 the applicants filed an application in proceeding VID 142 of 2010 in the Court in which pursuant to ss 30, 50 and 78 of the Bankruptcy Act 1966 (Cth) ("the Act") they sought final orders that the Court direct that the Official Trustee or a registered trustee take control of the respondent's property from the date of the order until a date specified by the Court. The applicants also sought the following interim orders:
"3. The Court directs that the Official Trustee or a registered trustee take control of the respondent's property from the date of this order until a date specified by the Court.
4. The respondent and Michael Witt of Findlay Arthur Phillips forthwith deliver up to the District Registrar all passports of the respondent.
5. In the alternative to 4, upon provision of a suitable undertaking to the Court, Michael Witt of Findlay Arthur Phillips hold the respondent's passport until further order.
6. The respondent be ordered not to leave the State of Victoria until further order.
7. The respondent be ordered not to attend any point of international departure until further order.
8. The respondent not apply for any other passport until further order."
6. On 5 March 2010 the applicants, through their counsel, informed Dodds‑Streeton J that they did not rely upon s 78 of the Act.
7. On 5 March 2010 Dodds‑Streeton J, in proceeding VID 142 of 2010, upon receipt of an undertaking from the solicitor for the respondent that he would hold the respondent's passports and not return them to the respondent or any other person at the respondent's direction unless the Court so ordered or the applicants' solicitors consented in writing until 5.00pm on 24 March 2010 or further order, made orders in the following terms:
(a) Until further order the Respondent, Jan Emil Talacko, be restrained from taking any further steps by himself or by his employees, agents or attorneys for the purpose of or in furtherance of selling, transferring, donating or otherwise dealing with any of the properties listed in Attachment "A" to the orders, (which properties were the Sucha property, being 360 hectares of forest land located near Sucha, Slovakia, as outlined in paragraph 2(9) of the plaintiff's particulars of the properties in Respect of which and the basis upon which Equitable Compensation is Sought dated 20 June 2008, and the Dresden property, being the land and an apartment building at Kiefernstrasse 19b, Dresden, Germany).
(b) James Stewart of Ferrier Hodgson, a Registered Trustee, take control of the Respondent's property until further order.
(c) Liberty to apply be reserved.
(d) The time for service of this application be abridged.
(e) Costs be reserved.
(f) The further hearing of the application be adjourned to 24 March 2010.
8. On 9 March 2010 the respondent, so as to enable him to leave Australia on 12 March 2010, and pursuant to the liberty to apply reserved by Dodds‑Streeton J, applied to Ryan J for orders that the respondent's solicitor be released from his undertaking to hold the respondent's passports and that the respondent's solicitor be permitted to return the respondent's passports to him.
9. On 10 March 2010 the respondent filed an application for leave to appeal from the judgment of Dodds‑Streeton J on 5 March 2010.
10. On 17 March 2010 Ryan J:
(a) dismissed the respondent's application for variation or discharge of the order of 5 March 2010 and the undertaking given on 5 March 2010 by the respondent's solicitor;
(b) refused the application for leave to appeal.
11. From 5 March 2010 until 25 March 2010 the respondent was denied possession of his Australian passport and his Czech passport and was thereby unable to depart for Australia lawfully by operation of the order made by Dodds‑Streeton J on 5 March 2010.
12. On 24 March 2010 the adjourned hearing of the application in proceeding VID 142 of 2010 came before Goldberg J. Prior to the luncheon adjournment Goldberg J set aside bankruptcy notices VN 403/2010 and VN 404/2010 and terminated the direction that James Stewart of Ferrier Hodgson, a Registered Trustee, take control of the property of the respondent with effect on and from 2.00pm on 24 March 2010.
13. On 24 March 2010 after Goldberg J made the orders in paragraph 12, bankruptcy notices VN 570/2010 and VN 571/2010 (Annexure "A" hereto) were issued against the respondent by the Official Receiver on the application of the applicants. In bankruptcy notice VN 571/2010 the first applicant claimed that the respondent owed her a debt of $7,217,235.80. In bankruptcy notice VN 570/2010, the second, third, fourth and fifth applicants claimed that the respondent owed them a debt of $7,217,235.80.
14. On 25 March 2010 Goldberg J, on the application of the applicants, made orders discharging order (1) of the orders made by Dodds‑Streeton J on 5 March 2010, releasing the respondent's solicitor from his undertaking to the Court and dismissing proceeding VID 142 of 2010. Goldberg J also ordered that the applicants pay the respondent's costs of and incidental to that proceeding.
15. On 25 March 2010 the applicants commenced proceeding VID 201 of 2010 and moved Goldberg J for the following interlocutory and final orders relying on ss 30 and 50 of the Act:
A. FINAL ORDERS SOUGHT BY APPLICANT
Application pursuant to ss 30 and 50 of the Bankruptcy Act 1966 (Cth) ("the Act")
On the grounds stated in the supporting affidavit or statement of claim, the applicant seeks the following orders:
1. Until further order, the Respondent, Jan Emil Talacko, be restrained from taking any further steps by himself or by his employees, agents or attorneys for the purpose of or in furtherance of selling, transferring, donating or otherwise dealing with any of the properties listed in Attachment "A".
2. The Court directs that the Official Trustee or a registered trustee take control of the respondent's property from the date of this order until a date specified by the Court.
3. The respondent and Michael Witt of Findlay Arthur Phillips forthwith deliver up to the District Registrar all passports of the respondent.
4. In the alternative to 4, upon provision of a suitable undertaking to the Court, Michael Witt of Findlay Arthur Phillips hold the respondent's passport until further order.
5. The following affidavits filed by the Applicants in Proceeding No VID 142 of 2010 are taken to be filed in this proceeding:
(a) the affidavit of Howard Rapke sworn 4 March 2010;
(b) the supplementary affidavit of Howard Rapke sworn 5 March 2010;
(c) the third affidavit of Howard Rapke sworn 5 March 2010;
(d) the fourth affidavit of Howard Rapke sworn 10 March 2010;
(e) the affidavit of James Stewart sworn 12 March 2010;
(f) the affidavit of James Stewart sworn 17 March 2010;
(g) the fifth affidavit of Howard Rapke sworn 23 March 2010;
(h) the affidavit of Catherine Hollis sworn 23 March 2010; and
(i) the affidavit of James Stewart sworn 25 March 2010.
6. Costs reserved.
B. INTERIM ORDERS SOUGHT BY APPLICANT
The applicant seeks the following interim orders:
7. The Court directs that the Official Trustee or a registered trustee take control of the respondent's property from the date of this order until a date specified by the Court.
8. The respondent and Michael Witt of Findlay Arthur Phillips forthwith deliver up to the District Registrar all passports of the respondent.
9. In the alternative to 8, upon provision of a suitable undertaking to the Court, Michael Witt of Findlay Arthur Phillips hold the respondent's passport until further order.
10. Liberty to apply be reserved.
11. The time for service of this application be abridged.
12. Costs reserved."
16. On 25 March 2010 Goldberg J made interim orders (without any hearing on the merits and solely for the purpose of preserving the status quo which had been created by the orders made on 5 March 2010 in proceeding VID 142 of 2010) in this proceeding, inter alia, restraining the respondent until further order from:
(a) taking the passports presently in the possession of his solicitor Michael Witt of Findlay Arthur Phillips out of the possession of Michael Witt;
(b) attending any point of international departure from Australia;
(c) taking any further steps by himself or by his employees, agents or attorneys for the purpose, or in furtherance of selling, transferring, donating or otherwise dealing with any of the properties listed in Attachment "A" to the order;
(d) disposing of, destroying or otherwise alienating any of his property.
17. In making the orders identified in paragraph 16, Goldberg J did not purport to exercise any power allegedly conferred by s 30 of the Act but expressly relied upon the principles set out in Tait v R (1962) 108 CLR 620 and Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 153 ALR 641.
18. The respondent contends that the Court has no power conferred on it by s 30 of the Act to make the orders sought in paragraphs 3, 4, 8 and 9 of the application in proceeding VID 201 of 2010 (paragraph 15 above).
19. The applicants contend that the Court has such power in circumstances where bankruptcy notices have been issued in respect of the respondent.
20. The respondent had made arrangements to leave Australia on 31 March 2010 but has postponed his travel plans pending the hearing and determination of this special case stated.
THE FOLLOWING QUESTION is stated for the consideration of the Full Court:
Do the provisions of s 30(1) of the Bankruptcy Act 1966 (Cth) empower the Court to order that a person in respect of whom a bankruptcy notice has been issued pursuant to the provisions of the Act -
(a) be restrained from leaving the jurisdiction;
(b) be required to deliver up his or her passport or passports to the Court or to any other person.