FEDERAL COURT OF AUSTRALIA Talacko v Talacko [2010] FCAFC 54 Citation: Talacko v Talacko [2010] FCAFC 54 Parties: HELENA MARIE TALACKO, ALEXANDRA ANN BENNETT, MARTIN THOBURN JAN TALACKO, ROWENA KIRSTEN EVE TALACKO AND MARGARET HELEN BEATRICE TALACKO v JAN EMIL TALACKO File number: VID 201 of 2010 Judges: GRAY, MANSFIELD AND MCKERRACHER JJ Date of judgment: 27 May 2010 Catchwords: BANKRUPTCY - special case stated - statutory interpretation - general powers of Court pursuant to s 30(1) of the Bankruptcy Act 1966 (Cth) - restraint of person in respect of whom a bankruptcy notice has been issued from leaving the jurisdiction - delivery up of passport - fundamental right to travel freely - Bankruptcy Act 1966 as a code Legislation: Bankruptcy Act 1966 (Cth) ss 30(1), 78 Cases cited: Anthony Hordern & Sons Ltd v Amalgamated Clothing & Allied Trades Union of Australia (1932) 47 CLR 1 Re Bayliss; Ex parte Hadotone Pty Ltd and Others v Official Trustee in Bankruptcy (1987) 15 FCR 91 Re Bilen; Ex parte Sistrom (unreported, Federal Court, Neaves J, 11 April 1985) Re Brazel; Ex parte Royal Nominees Pty Ltd (unreported, Federal Court, Cooper J, 2 June 1995) Clunies-Ross, Re; Totterdell, Ex p (1987) 72 ALR 241 Coco v The Queen (1993) 179 CLR 427 Danieletto v Khera (1995) 35 NSWLR 684 Electrolux Home Products Pty Ltd v Australian Workers' Union [2004] HCA 40; (2005) 221 CLR 309 Evans v State of NSW [2008] FCAFC 130;(2008) 104 ALD 234 Jackson v Sterling Industries Ltd (1986) 12 FCR 267 Potter v Minahan (1908) 7 CLR 277 Storey v Lane (1981) 147 CLR 549 Talacko v Talacko (No 2) [2009] VSC 444 Talacko v Talacko [2010] FCA 193 Talacko v Talacko [2010] FCA 239 Vale v Sutherland [2009] HCA 26; (2009) 237 CLR 638 Weiss v Official Trustee in Bankruptcy (1983) 1 FCR 40 Williams v Minister for the Environment & Heritage [2003] FCA 627; (2003) 74 ALD 111 Date of hearing: 6 May 2010 Place: Melbourne Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 39 Counsel for the Applicants: G Bigmore QC and P Fary Solicitor for the Applicants: Holding Redlich Counsel for the Respondent: MD Wyles SC and TJF McEvoy Solicitor for the Respondent: Findlay Arthur Phillips IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 201 of 2010 BETWEEN: HELENA MARIE TALACKO, ALEXANDRA ANN BENNETT, MARTIN THOBURN JAN TALACKO, ROWENA KIRSTEN EVE TALACKO AND MARGARET HELEN BEATRICE TALACKO Applicants AND: JAN EMIL TALACKO Respondent JUDGES: GRAY, MANSFIELD AND MCKERRACHER JJ DATE OF ORDER: 27 MAY 2010 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. The question stated for the consideration of the Full Court be answered as follows: Question: Do the provisions of s 30(1) of the Bankruptcy Act 1966 (Cth) empower the Court to order that a person in respect of whom a bankruptcy notice has been issued pursuant to the provisions of the Act ‑ (a) be restrained from leaving the jurisdiction; (b) be required to deliver up his or her passport or passports to the Court or to any other person? Answer: (a) Yes. (b) Yes 2. The applicants' costs of the case stated be the applicants' costs of the proceeding. 3. There be no order as to the respondent's costs of the case stated. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using Federal Law Search on the Court's website. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 201 of 2010 BETWEEN: HELENA MARIE TALACKO, ALEXANDRA ANN BENNETT, MARTIN THOBURN JAN TALACKO, ROWENA KIRSTEN EVE TALACKO AND MARGARET HELEN BEATRICE TALACKO Applicants AND: JAN EMIL TALACKO Respondent JUDGES: GRAY, MANSFIELD AND MCKERRACHER JJ DATE: 27 MAY 2010 PLACE: MELBOURNE REASONS FOR JUDGMENT THE COURT: INTRODUCTION 1 The Court is asked to determine whether s 30(1) of the Bankruptcy Act 1966 (Cth) (the Bankruptcy Act) empowers the Court to order that a person in respect of whom a bankruptcy notice has been issued pursuant to the provisions of the Bankruptcy 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. 2 Section 30(1) provides: 30 General powers of Courts in bankruptcy (1) The Court: (a) has full power to decide all questions, whether of law or of fact, in any case of bankruptcy or any matter under Part IX, X or XI coming within the cognizance of the Court; and (b) may make such orders (including declaratory orders and orders granting injunctions or other equitable remedies) as the Court considers necessary for the purposes of carrying out or giving effect to this Act in any such case or matter. 3 For the reasons which follow, the answer to each limb of the question is 'yes'. THE CASE STATED 4 At the request of the applicants, a bankruptcy notice was issued against the respondent. Pursuant to s 50(1)(a) of the Bankruptcy Act, the applicants sought an order directing that the Official Trustee, or a specified registered trustee, take control of the respondent's property. The applicants also sought interim orders, including orders that all passports of the respondent be delivered up to the District Registrar of the Court or held by a named person until further order, and that the respondent not leave the State of Victoria until further order. By order of Goldberg J, the following special case is 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. THE RESPONDENT'S CONTENTIONS 5 The respondent maintains that the Court is not so empowered 6 The respondent first argues that s 30(1) of the Bankruptcy Act is facultative only, conferring on the Court full power within the limits of its jurisdiction to make such orders as it considers should be made in order to carry out and give effect to the Bankruptcy Act. The general power described in s 30(1), however, is subject to specific limitations on the power of the Court provided for in the Bankruptcy Act and is also subject to the right of Australian citizens to travel freely to and from Australia. This is said to be a 'fundamental right'. Such a fundamental right, it is argued, cannot be displaced by the general words of s 30(1) of the Bankruptcy Act. 7 Secondly, it is argued that the presence of s 78 in the Bankruptcy Act supports such an interpretation of s 30(1). Section 78 gives the Court a specific power to order the arrest and imprisonment of a debtor or bankrupt in certain express circumstances. Therefore, in light of the requirement that express circumstances exist before the specific power of s 78 may be exercised, depriving a person of the right to leave the jurisdiction and travel, it is contended, could not have been contemplated by the substantially more general power under s 30(1). Both before the primary judge and the Full Court, counsel for the applicants expressly disclaimed reliance on s 78 to justify the orders sought. 8 Section 78 of the Bankruptcy Act provides as follows: 78 Arrest of debtor or bankrupt (1) Where it is made to appear to the Court: (a) that a debtor against whom a bankruptcy notice has been issued or a petition has been presented has absconded, or is about to abscond, with a view to avoiding payment of his or her debts or to preventing or delaying proceedings against him or her under this Act; (b) that a debtor against whom a bankruptcy notice has been issued or a petition has been presented has concealed or removed, or is about to conceal or remove, any of his or her property with a view to preventing or delaying possession of it being taken under this Act in the event of his or her becoming a bankrupt; (c) that a debtor against whom a bankruptcy notice has been issued or a petition has been presented has destroyed, concealed or removed, or is about to destroy, conceal or remove, books (including books of an associated entity of the debtor) relating to any of the debtor's examinable affairs; (d) that a bankrupt has concealed, or, without the permission of the trustee, has removed, any of the property of the bankrupt; or (f) that a bankrupt has, without good cause shown, neglected or failed to comply with an order of the Court or with any other obligation under this Act; the Court may issue a warrant for the arrest of the debtor or bankrupt, as the case may be, and his or her committal to such gaol as the Court appoints until the Court otherwise orders and may, by the same warrant, order that any property and books in the possession of the debtor or bankrupt be seized and delivered into the custody of such person as the Court appoints. (2) Any property and books delivered into the custody of a person in pursuance of an order under subsection (1) shall be retained by him or her until the Court makes an order as to their disposal. (3) Paragraphs (1)(a), (b) and (c) apply in relation to a debtor whether or not he or she has become a bankrupt and whether, in the case of a debtor against whom a petition has been presented, the petition was a creditor's petition or a debtor's petition. 9 Dealing with the first limb of its contentions, the respondent relies on Potter v Minahan (1908) 7 CLR 277, Weiss v Official Trustee in Bankruptcy (1983) 1 FCR 40 per Bowen CJ at 43 and Danieletto v Khera (1995) 35 NSWLR 684 to support the argument that the common law of Australia provides that the freedom to leave the jurisdiction and travel is a 'fundamental right' of all Australian citizens. 10 In Potter v Minahan O'Connor J said (at 304 ) (footnotes omitted): So far from extending the operation of the Act beyond the ordinary meaning of the words which the legislature has used, it is always necessary, in cases such as this where a Statute affects civil rights, to keep in view the principle of construction stated in Maxwell on Statutes, 4th ed., p. 121:--"There are certain objects which the legislature is presumed not to intend; and a construction which would lead to any of them is therefore to be avoided." After dealing with other matters not material to the aspect of the rule now under consideration the learned author continues (at page 122):--"One of these presumptions is that the legislature does not intend to make any alteration in the law beyond what it explicitly declares (per Trevor J. in Arthur v. Bokenham: See also Harbert's Case, at p. 13b), either in express terms or by implication; or, in other words, beyond the immediate scope and object of the Statute. In all general matters beyond, the law remains undisturbed. It is in the last degree improbable that the legislature would overthrow fundamental principles, infringe rights, or depart from the general system of law, without expressing its intention with irresistible clearness (3); and to give any such effect to general words, simply because they have that meaning in their widest, or usual, or natural sense, would be to give them a meaning in which they were not really used." 11 Particular reliance is placed on the following observation at 305 by O'Connor J: It cannot be denied that, subject to the Constitution, the Commonwealth may make such laws as it may deem necessary affecting the going and coming of members of the Australian community. But in the interpretation of those laws it must, I think, be assumed that the legislature did not intend to deprive any Australian-born member of the Australian community of the right after absence to re-enter Australia unless it has so enacted by express terms or necessary implication. 12 The observations of O'Connor J are to be considered in their context. Potter v Minahan was a case in which it was sought by the use of language testing authorised by the Immigration Restriction Acts 1901-1905, in effect, to preclude the re-entry into Australia of an Australian born Australian citizen. The case turned on whether the appellant was an 'immigrant'. The issue under consideration was very different from the present question which addresses a restraint of departure from Australia in circumstances a judge deems necessary to give effect to the objects of the Bankruptcy Act. 13 Reliance is also placed on domestic and internationalinstruments recognising the importance of the right of travel such as the Charter of Human Rights and Responsibilities Act 2006 (VIC), s 12; the International Covenant on Civil and Political Rights (ICCPR), Art 12; the Human Rights and Equal Opportunity Commission Act 1986 (Cth), Sch 2 Art 12 (which is in the terms of the ICCPR); and the Universal Declaration of Human Rights, Art 13. Those provisions, respectively, provide: (The Victorian Statute): Freedom of movement 12, Freedom of movement Every person lawfully within Victoria has the right to move freely within Victoria and to enter and leave it and has the freedom to choose where to live. (The ICCPR): Article 12 1. Everyone lawfully within the territory of a State shall, within that territory, have the right to liberty of movement and freedom to choose his residence. 2. Everyone shall be free to leave any country, including his own. 3. The above-mentioned rights shall not be subject to any restrictions except those which are provided by law, are necessary to protect national security, public order (ordre public), public health or morals or the rights and freedoms of others, and are consistent with the other rights recognized in the present Covenant. 4. No one shall be arbitrarily deprived of the right to enter his own country. (The UDHR): Article 13. (1) Everyone has the right to freedom of movement and residence within the borders of each state. (2) Everyone has the right to leave any country, including his own, and to return to his country. 14 That Parliament may be assumed not to 'overthrow fundamental principles, infringe rights, or depart from the general system of law' without expressing its intention with 'irresistible clearness' was reaffirmed in Coco v The Queen (1993) 179 CLR 427 at 436-439 per Mason CJ, Brennan, Gaudron and McHugh JJ (see also Deane and Dawson JJ at 446. In the judgment of the plurality, their Honours said (at 437) (footnotes omitted): The insistence on express authorization of an abrogation or curtailment of a fundamental right, freedom or immunity must be understood as a requirement for some manifestation or indication that the legislature has not only directed its attention to the question of the abrogation or curtailment of such basic rights, freedoms or immunities but has also determined upon abrogation or curtailment of them. The courts should not impute to the legislature an intention to interfere with fundamental rights. Such an intention must be clearly manifested by unmistakable and unambiguous language. General words will rarely be sufficient for that purpose if they do not specifically deal with the question because, in the context in which they appear, they will often be ambiguous on the aspect of interference with fundamental rights. 15 In Electrolux Home Products Pty Ltd v Australian Workers' Union [2004] HCA 40; (2005) 221 CLR 309, Gleeson CJ approving the passage from Coco referred to above, said (at [21]) (footnotes omitted): The joint judgment in Coco went on to identify as the rationale for the presumption against modification or abrogation of fundamental rights an assumption that it is highly improbable that Parliament would "overthrow fundamental principles, infringe rights, or depart from the general system of law" without expressing its intention with "irresistible clearness". In R v Home Secretary; Ex parte Pierson, Lord Steyn described the presumption as an aspect of the principle of legality which governs the relations between Parliament, the executive and the courts. The presumption is not merely a common sense guide to what a Parliament in a liberal democracy is likely to have intended; it is a working hypothesis, the existence of which is known both to Parliament and the courts, upon which statutory language will be interpreted. The hypothesis is an aspect of the rule of law. 16 The real question on the first limb of the respondent's argument is whether the principle of statutory construction in Coco and Electrolux dictates that in the exercise of judicial power conferred by Parliament under s 30(1), a judge exercising such power may not make an order, despite considering that it is 'necessary' for the purposes of the Bankruptcy Act, if the effect of the order is to erode for a period of time a common law right – 'fundamental' or otherwise. CONSIDERATION The fundamental right argument 17 The making of ancillary orders to prevent the scheme of the Bankruptcy Act from being defeated is neither novel or unusual. In Storey v Lane (1981) 147 CLR 549 (at 556-557), Gibbs CJ observed (footnotes omitted): An essential feature of any modern system of bankruptcy law is that provision is made for the appropriation of the assets of the debtor and their equitable distribution amongst his creditors, and for the discharge of the debtor from future liability for his existing debts. In Hill v East and West India Dock Co Earl Cairns cited with approval the following passage from the judgment of James LJ in Ex parte Walton; In re Levy: "Now, the bankruptcy law is a special law, having for its object the distribution of an insolvent's assets equitably amongst his creditors and persons to whom he is under liability, and, upon this cessio bonorum, to release him under certain conditions from future liability in respect of his debts and obligations." If further authority is needed for the proposition that the equitable distribution of the assets of the insolvent debtor is a fundamental purpose of the bankruptcy law, reference may be made to Attorney-General (Ontario) v Attorney-General (Canada) and Reg v Davison. It is equally clear that and (sic-any) system of bankruptcy law "may frequently require various ancillary provisions for the purpose of preventing the scheme of the Act from being defeated": Attorney-General (Ontario) v Attorney-General (Canada); Royal Bank of Canada v Larue. For example, it may be necessary to frame provisions to stop individual action by creditors for the purpose of obtaining payment of the debts due to them when the aim of the law is to secure administration of the debtor's assets in the interest of the creditors generally: Attorney-General (British Columbia) v Attorney-General (Canada). (emphasis added) 18 The breadth of the language appearing in s 30(1) supports a conclusion that it should not be construed narrowly or in a confined or limited way. In Re Bilen; Ex parte Sistrom (unreported, Federal Court, Neaves J, 11 April 1985), Neaves J said: In my opinion s 30(1) of the Bankruptcy Act 1966 is not a provision limiting the Court's jurisdiction. It is a facultative provision giving the Court full power, within the limits of its jurisdiction to be found elsewhere, to make such orders as it considers should be made in order to carry out and give effect to the Act. The words used are not words of limitation but of extension. 19 The judicial power conferred is intended to assist in the exercise of jurisdiction in bankruptcy. It is an ingredient of the exercise of discretion under such a power that it be 'necessary for the purposes of carrying out or giving effect to' the Bankruptcy Act. In express terms, it is contemplated that the Court may make orders granting injunctions or other equitable remedies. The legislature is to be taken as having intended that the Court would adopt the same approach to making such orders as it adopts in the exercise of other broad discretionary powers in support of its jurisdiction. 20 In Clunies-Ross, Re; Totterdell, Ex p (1987) 72 ALR 241, the applicant sought ex parte interlocutory relief pending the hearing of the substantive application. The relief sought was by way of an injunction to restrain the respondent from dealing with the property retained in the Cocos (Keeling) Islands Territory. French J (as his Honour then was) held (at 245-246) that the power conferred by s 30(1)(b) of the Bankruptcy Act enabled the Court to grant interlocutory relief of the kind sought. His Honour concluded that the restraint was necessary for the purposes of carrying out or giving effect to the Bankruptcy Act so that any consideration of an application for a request to issue proceedings in the Supreme Court of the Territory of the Cocos (Keeling) Islands was not rendered nugatory by any prior disposition of the subject property or any part of it. 21 The respondent however seeks support from a decision of this Court in Re Bayliss; Ex parte Hadotone Pty Ltd and Others v Official Trustee in Bankruptcy (1987) 15 FCR 91 where Spender J applied the principles of statutory construction discussed above in considering whether s 30(1)(b) of the Bankruptcy Act provided a general power sufficient to justify the order for the issue of certain warrants of search and seizure on a basis that it was more extensive than was authorised expressly by s 130 of the Bankruptcy Act. It is important, however, to note that his Honour was dealing with a situation in which seizure was sought of the property of third parties. Dealing with those issues, his Honour said (at 95-101): There is no express provision in s 30(1)(b) abrogating the common law right of a person to his premises and his property. The question then becomes whether it is a necessary intendment of that section that such rights be abrogated. In my opinion, the answer must be 'No'. … In my opinion there is no latent power in the Act to authorise the issue of warrants of search and seizure as the property of strangers in aid of the investigative function of a trustee in bankruptcy to identify and realise the property of the bankrupt. This is particularly so since the power to authorise search and seizure is a drastic power, and the legislature has in s 130 of the Act specifically provided the circumstances in which such a power might be exercised in relation to the property of the bankrupt. (emphasis added) 22 Re Bayliss was concerned with the impact upon rights of third parties rather than the impact upon rights of the bankrupt. The questions posed for consideration in this case stated are directed to the rights of the bankrupt. Of course, it may be an altogether different issue as to whether s 30(1) would empower passport delivery orders being made against parties other than the bankrupt but that is not the issue before us. 23 Re Bayliss was followed by Cooper J in Re Brazel; Ex parte Royal Nominees Pty Ltd (unreported, Federal Court, Cooper J, 2 June 1995), in which his Honour expressed doubts as to whether s 30(1)(b) ought to be construed as giving a power to restrain a person leaving the jurisdiction prior to the making of the bankruptcy order. This observation, however, was obiter as his Honour concluded that if the power did exist, it was not a power which ought be exercised on the material which was before the Court in that instance. Cooper J did, nevertheless, go on to order delivery up of an Australian passport under s 30(1) even though the debtor had no travel plans for any specific and identifiable journey and had not purchased a ticket to travel showing a present intention to return to Australia (see [17]-[18] and [22]). 24 The respondent also seeks support in the analysis by Dodds-Streeton J in Talacko v Talacko [2010] FCA 193. Her Honour acknowledged Cooper J's observation in Re Brazel that s 78 of the Bankruptcy Act dealt specifically with a case where a debtor sought to flee the jurisdiction. That did not mean that her Honour would have supported the respondent's argument that the Court has no power at all to restrain departure or require delivery up of a passport. Rather, her Honour's approach was to note the caution with which such power would be exercised. Although the respondent is critical of the conclusion and reasoning of Ryan J when leave to appeal from Dodds-Streeton J's order for delivery up of the passport was refused, we consider that what Ryan J said (in Talacko v Talacko [2010] FCA 239 (at [31]-[33]) on both limbs of the respondent's argument was, with respect, entirely correct. His Honour said: 31 I accept that the authorities invoked by Counsel for the debtor establish a principle of statutory construction that legislation which arguably infringes a citizen's common law rights, including the right to travel inside and outside of Australia, ought only to be given that effect if its language intractably requires it. However, a different approach is called for when the legislation to be interpreted, like s 30(1) of the Act, confers on a court a broad general discretion to be exercised judicially. That is not to say that an infringement of common law rights is not to be weighed in the balance in exercising the discretion. In my view, that was done by Dodds-Streeton J when she said, as noted at [9] above, that "curial restraint and caution must be exercised in relation to curtailing or interfering with a person's travel and freedom of movement, even in a bankruptcy context." That observation confirms that her Honour saw herself as engaged in the exercise described by Cooper J in Brazel of balancing the public interest in the efficacy of an order under s 50 against a debtor's common law right to freedom of movement and travel. 32 I do not regard the presence in the Act of s 78 as negativing an intention that the power conferred by s 30(1) extends to an order restricting a debtor's freedom of movement or travel if that is seen as necessary in aid of a direction under s 50. Section 78(1)(a) does not deal, in terms, with a restriction on travel or movement, even of an absconding debtor. It is confined to a power to issue a warrant for the arrest and committal of the debtor. Taken to its logical conclusion, the argument advanced on behalf of the present debtor would entail that, if the Court thinks it appropriate to release a debtor on bail after an order for committal, there is no power under s 30(1) to impose a condition requiring the surrender of the debtor's passport. 33 In my view, the existence of the power exercised by the primary Judge is supported by the preferable construction of s 30(1) and confirmed by observations to be found in, amongst other cases, Re Brazel, Weiss v Official Trustee in Bankruptcy (supra) and ASIC v Wiggins (supra, at 320). 25 The respondent contends that his Honour's conclusion finds no support in the jurisprudence of this Court and no support in the principles established by the High Court. That submission cannot be accepted. None of the authorities relied upon by the respondent addressed the question of whether the exercise of judicial power by a broadly based discretion could erode common law rights, be they 'fundamental' or otherwise. There is a difference between cases which deal with regulations (such as Evans v State of NSW [2008] FCAFC 130; (2008) 104 ALD 234)on the one hand and the question for consideration at present in which a broadly based discretionary judicial power is invested in the Court by Parliament. Broad judicial discretionary powers are set out in other statutes such as s 20 of the Supreme Court Act of the Northern Territory, s 80 of the Supreme Court Act of Queensland, s 127(1)(c) of the Lands Acquisition Act 1989 (Cth), s 160(e) of the Patents Act (Cth), the Design Act 2003 (Cth) and the Trade Marks Act 1995 (Cth) (s 88 and s 197 respectively). There appears to be no instance in which some fundamental right has been excluded from the exercise of a court's discretion in such provisions – either expressly in terms or in the course of judicial determination. It would be very difficult to identify a list of such rights which were to be excluded. For example, the common law right to deal with one's property is also a basic right but it cannot be thought that the broad power in s 30(1) of the Bankruptcy Act could not encroach on such a right if a judge were persuaded that it was 'necessary' for the purposes of the Act to do so. 26 In Clunies-Ross French J (at 245) also observed that the construction of s 30(1)(b) which supported the making of the order was analogous to the construction of s 23 of the Federal Court of Australia Act 1976 (Cth) (the Federal Court Act) supporting the granting of Mareva injunction – Jackson v Sterling Industries Ltd (1986) 12 FCR 267. We agree. There is no discernable difference in principle between s 30(1)(b) of the Bankruptcy Act and s 23 of the Federal Court Act which empowers the Court to make such orders as it considers appropriate. In Williams v Minister for the Environment & Heritage [2003] FCA 627; (2003) 74 ALD 111, Lindgren J said (at [18]) that the inherent or implied power to make an order directed to preserving the subject matter of litigation or to preventing its processes from being frustrated is a power which 'exists independently of the familiar form of provision such as that found in s 23 of the Federal Court Act. 27 In Talacko v Talacko (No 2) [2009] VSC 444, Habersberger J held that the Supreme Court of Victoria had jurisdiction to make a no departure order pursuant to s 37 of the Supreme Court Act 1986 (VIC) and the inherent jurisdiction of the Court (and possibly r 37A.03 of the Supreme Court (General Civil Procedure) Rules 2005). 28 Habersberger J said (at [42]-[43]) (footnotes omitted): 42 In Bayer A.G. v Winter, Mareva and Anton Piller orders were made ex parte. However, the judge refused to make orders that the first defendant be restrained from leaving England and Wales and that he forthwith deliver up his passports. The plaintiffs successfully appealed. Fox LJ, with whom Ralph Gibson CJ agreed, said that this was not a case in which a writ ne exeat regno would be applicable. The jurisdiction relied on by counsel for the appellants was s.37(1) of the Supreme Court Act 1981 (UK), which is in similar terms to the Victorian s.37(1) quoted above. In granting the order, Fox LJ said that: … the court has a wide discretion to do what appears to be just and reasonable in the circumstances of the case. The court has to exercise that discretion according to established principles, and the particular matter with which we are concerned at the moment, namely an injunctive restraint upon a person leaving the jurisdiction, is not one on which there appears to be previous authority. It is clear, however, that the law in relation to the grant of injunctive relief for the protection of a litigant's rights pending the hearing of an action has been transformed over the past 10 years by the Anton Piller and Mareva relief which has greatly extended the law on this topic as previously understood, so as to meet the needs of justice. Bearing in mind we are exercising a jurisdiction which is statutory, and which is expressed in terms of considerable width, it seems to me that the court should not shrink, if it is of opinion that an injunction is necessary for the proper protection of a party to the action, from granting relief, notwithstanding it may, in its terms, be of a novel character. … Therefore it seems to me that the court is faced with a situation in which there is a risk to the plaintiffs that they may not obtain the information ordered to be disclosed, unless the order which is now sought is granted; while, at the same time, any risk of hardship to the first defendant is dealt with by his capacity to apply to a judge to vary or discharge the order. It should be noted, however, that his Lordship limited the duration of the restraint to a period of two days after service of the order because: It is an interference with the liberty of the subject, so that the period should be no longer than is necessary to enable the plaintiffs to serve the Mareva and Anton Piller orders which they have obtained, and endeavour to obtain from the defendant the information which is referred to in those orders. 43 Thus, I consider that this Court has the power "if it is just and convenient to do so" to restrain a person from leaving Victoria. 29 We consider, with respect, that the same process of reasoning applies in consideration of s 30(1)(b) of the Bankruptcy Act. The code argument 30 The second limb to the respondent's argument rests on an assertion that s 78 of the Bankruptcy Act, in effect, constitutes a complete 'code' as to the circumstances in which such a power may be exercised. 31 In relation to the 'code' argument, s 78(1) of the Bankruptcy Act does give the Court a specific power to order the arrest of a debtor or bankrupt and his or her committal to jail. It also empowers the making of orders as to the delivery up of any property and books of such a person in circumstances where the debtor or bankrupt is about to abscond, is about to conceal or remove assets, has or is about to destroy, conceal or remove books or has without good cause shown, neglected for failed to comply with an order of the Court or with any other obligation under the Bankruptcy Act. For the respondent, it is argued that because the section is expressed in clear terms and entitles the Court to restrain a debtor or a bankrupt if the prerequisite facts are found to exist, this is the sole basis on which the Court can interfere with the freedom of movement of a debtor or bankrupt. The argument for the respondent in essence is that the Court should not make an order under a general section of an Act (s 30(1)) when a more specific section of the Bankruptcy Act deals with the circumstances for the making of such an order: Anthony Hordern & Sons Ltd v Amalgamated Clothing & Allied Trades Union of Australia (1932) 47 CLR 1 at 7 and Vale v Sutherland [2009] HCA 26;(2009) 237 CLR 638 (at [19] per Gummow, Hayne, Heydon, Crennan, Kiefel JJ). 32 The respondent also contends that this is the only basis under the Bankruptcy Act on which delivery up of a person's passport or passports could be authorised. The applicants suggest that this power is not to be found within s 78 because the property to which the relief is there directed is the debtor or bankrupt's own property (see s 78(1)(b)), whereas the passport at all time remains the property of the Commonwealth of Australia. For the applicants it is contended, therefore, that if the powers conferred by s 78 are to be exercised, an accompanying order requiring delivery up of a passport would be authorised by s 30(1) of the Bankruptcy Act rather than by s 78 of the Bankruptcy Act. This may be the better construction as to the source of power but it is unnecessary to decide this point as the 'code' argument fails at a more basal level. 33 There is, in our view, a real distinction between a restraint on travel (in a practical sense by delivery up of a passport) on the one hand under s 30(1) of the Bankruptcy Act and on the other, arrest and, possible imprisonment pursuant to s 78 of the Bankruptcy Act. It would be expected that the legislature would require specific facts to be established before such an order of arrest or commitment were made. The restraint on the use by a debtor of his or her passport on a temporary basis in order to assist an interim trustee or for some other necessary purpose to give effect to the Bankruptcy Act, while being an order that would not be lightly made, is nevertheless not an abrogation of a 'fundamental right' as contended by the respondent. Rather, it is a functional interim measure even then only to be exercised where the Court is satisfied that it is necessary to do so for achieving the purposes of the Bankruptcy Act. This purposive approach has been recognised in Weiss at 43 where Bowen CJ stated: I am conscious of the fact that the evidence revealed in his public examination suggests that he has committed various offences against the Bankruptcy Act 1966 (Cth) which have characteristics involving nondisclosure and concealment. However, these are matters to be litigated at the proper time. It is a basic principle that a resident of Australia is entitled to expect that he may travel freely notwithstanding the fact that he is a bankrupt provided it will not lead to his staying overseas in order to defeat or delay his creditors and provided it will not interfere with the due administration of his bankrupt estate (see Tyndall's case at 15). It is to secure the proper administration of bankrupt estates that bankrupts are required by the Bankruptcy Act 1966 (Cth) to give their passports to the trustee (par 77(a)) and to obtain the permission of the trustee before travelling overseas (par 272(c)). This interference with the travel of bankrupts is not for the purpose of punishing or expressing disapproval of them for offences or alleged offences against the Bankruptcy Act 1966 (Cth). (emphasis added) 34 Nothing contained in s 78 of the Bankruptcy Act suggests that it is an exhaustive statement of the restriction on travel or movement of a debtor. CONCLUSION 35 To restrain a citizen from travelling is an order which would not be granted lightly and, in granting the order, the importance of the right to be free to travel would be a significant consideration to weigh in the balance. So also would be the prospect that the purposes of the Bankruptcy Act would be defeated or the bankruptcy rendered nugatory if travel were not restrained. The weighing of such considerations in the course of the exercise of judicial discretion is a task with which courts are charged on many occasions. 36 A contention that the questions should be answered in the negative could readily defeat the objectives of the Bankruptcy Act. It fails to take into account the requirement that a court must act judicially in the making of any order under s 30(1)(b) and must have regard to whether or not such an order is 'necessary' for the purposes of carrying out or giving effect to the Bankruptcy Act. 37 For the foregoing reasons, the question posed for the Court's consideration in the case stated will be answered in the affirmative. COSTS 38 The parties are agreed that if the questions are to be answered 'yes' then in the circumstances to which the case stated has come before the Court, it would be appropriate that the disposition of costs be on the basis that the costs be the applicants' costs in the proceeding. We consider that the appropriate orders are: 1. The question stated for the consideration of the Full Court be answered as follows: Question: Do the provisions of s 30(1) of the Bankruptcy Act 1966 (Cth) empower the Court to order that a person in respect of whom a bankruptcy notice has been issued pursuant to the provisions of the Act ‑ (a) be restrained from leaving the jurisdiction; (b) be required to deliver up his or her passport or passports to the Court or to any other person? Answer: (a) Yes. (b) Yes 2. The applicants' costs of the case stated be the applicants' costs of the proceeding. 3. There be no order as to the respondent's costs of the case stated. 39 Those orders will be made. I certify that the preceding thirty-nine (39) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Gray, Mansfield and McKerracher. Associate: Dated: 27 May 2010