Factual background
2 The applicants Helena Marie Talacko, Alexandra Ann Bennett, Martin Thorburn Jan Talacko, Rowena Kirsten Eve Talacko and Margaret Helen Beatrice Talacko applied to this Court, ostensibly pursuant to ss 30, 50 and 78 of the Bankruptcy Act 1966 (Cth) ("the Act") for orders that;
(a) The Official or a Registered Trustee take control of the property of the respondent, Jan Talacko, from the date of the order until a date specified by the Court.
(b) The respondent and his solicitor, Michael Witt of Finlay Arthur Phillips, deliver up to the District Registrar all the respondent's passports.
(c) Alternatively, that Mr Witt (on provision of a suitable undertaking to the Court) hold the respondent's passport until further order.
(d) That the respondent be ordered:
(i) not to leave the State of Victoria;
(ii) not to attend any point of international departure; and
(iii) not to apply for any other passport.
(e) That the time for service of the application be abridged.
3 Although the application referred to s 78 of the Act, in fact, only ss 30 and 50 were invoked in support of the orders ultimately sought. Her Honour noted that the application was attended by some urgency "as orders made in the Supreme Court restraining the debtor from departing Victoria would expire at 5.00pm today."
4 Before the application under ss 30 and 50 of the Act was made, two bankruptcy notices dated 1 March 2010 had been served on the debtor, one at the instance of the first applicant, Helena Talacko, and the other at the instance of the second to fifth applicants. Each bankruptcy notice claimed a total debt of $7,569,482.50. Also adduced in evidence before the primary Judge were reasons for judgment in the Supreme Court of Victoria, the first by Habersberger J on 13 October 2009 and the second by Kyrou J on 24 November 2009. The judgment debt which was the foundation of the bankruptcy notices resulted from an order by Kyrou J on 11 December 2009 that the debtor pay to the first applicant, who is the sister of the debtor, the sum of €4,740,830.00 and €296,079 by way of interest and pay to the second to fifth applicants jointly a sum in the same amounts of €4,740,830.00 and interest of €296,079. The latter applicants are the children of a deceased sibling of the debtor. The reasons for judgment of Kyrou J disclose that the judgment debt was by way of equitable compensation for breach of duty arising from a family arrangement for the recovery of properties in Germany, the Czech Republic and Slovakia, which had formerly been confiscated from the parents of the first applicant and the debtor.
5 While judgment in the Supreme Court was pending, the debtor and two of his sons, Paul Talacko and David Talacko, who are resident in Prague, had been subject to freezing orders and other orders in aid of the Supreme Court proceedings. Amongst other things, those orders required the debtor to deliver his passports into the custody of his solicitor, not to leave the State of Victoria, not to attend any point of international departure and not to apply for any other passport. On 17 December 2009 the travel restrictions were extended by Kyrou J until 5.00pm on 5 March 2010. On 4 March 2010, Beach J in the Supreme Court dismissed an application for a further extension of the travel restrictions.
6 There was also evidence before the primary Judge that the debtor had filed a notice of appeal from the judgment of Kyrou J of 11 December 2009 and that, on 25 January 2010, a notice of cross-appeal had been filed on behalf of the applicants in proceeding numbered VID 142 of 2010. As well, there was evidence of an oral examination of the debtor before Daly AsJ in the Supreme Court, in the course of which the debtor claimed he had no real or personal assets in Australia and, apart from some modest balances in several bank accounts, and no personal assets in the Czech Republic or elsewhere.
7 At [39] of her reasons, the learned primary Judge summarised as follows a submission advanced before her on behalf of the applicants;
The applicants submitted that orders pursuant to s 50 and incidental relief under s 30 of the Act were necessary in order to ensure the effective administration of the estate, in circumstances where: there was an unsatisfied judgment for a very large sum; the tendency evidence demonstrated that, absent such orders, the respondent would be likely to leave Australia and deal with or dispose of remaining properties; the respondent's presence overseas and his concomitant absence from Australia would create a significant impediment to the investigation, preservation and protection of the estate; the Czech Republic had not enacted the United Nations Commission of International Trade Law Model Law on Cross-Border Insolvency; the debtor had not demonstrated any ability to pay the debt and a sequestration order was likely; and, irrespective of the notice of appeal, the judgment debt was not stayed and no application to set aside the bankruptcy notice had been made or foreshadowed.