Melbourne solicitor admits to being in contempt of court for warning client’s family to avoid process server … However, not liable for “disparaging” the court … Transfer of European properties in defiance of Yarraside court orders … Scandalisation … Consideration of contumacious and contumelious conduct
South Yarra solicitor Michael Witt has admitted to one charge of contempt of court and had another one dismissed by Justice Jack Forrest of the VicSupremes.
Witt, a partner at Findlay Arthur Phillips, was the solicitor for long-time litigation troublemaker Jan Talacko, who kept breaching court orders in relation to property in Europe that was supposed to be divided with his siblings.
J Forrest J set the tone in the opening paragraph of his judgment:
“The late Jan Talacko was involved in litigation in this court for nearly twenty years. He was disingenuous and deceitful. He did everything he could to frustrate the processes of this court. For much of his litigation he engaged the defendant, Michael Witt, to act as his solicitor …
Much ink has been spilt by judges of this court setting out the various twists and turns of this extraordinary saga …”
In March 1991 Jan Talacko agreed with his sister Helena and brother Peter to share equally in family properties in the Czech Republic, Slovakia and Germany that had been appropriated by the former communist government.
After the war Talacko’s parents migrated to Australia.
In 1992 the properties were returned to Jan because he satisfied the criteria for restitution, being both a resident and citizen of the Czech Republic.
It was the 1991 agreement that produced more than 15 years of litigation.
In 1998 there were proceedings commenced in Victoria by members of Peter and Helena’s families trying to enforce the 1991 agreement. There is also another Jan Talacko (Jan jnr), who is the son of Helene and nephew of Jan – but he is not the star attraction of this story.
In February 2001 there was a settlement and Jan in the Czech Republic agreed to transfer rights and title in the properties to the plaintiffs.
By 2008 Osborn J found that agreement had been breached by Jan and he ordered equitable compensation.
In May 2009 Jan transferred his interest by way of gift in the European properties to his two sons, David and Paul, who at the time were understood to be residents of Prague.
The properties that were the subject of the restitution were significant. There were five substantial buildings in the centre of Prague, land in Kbely, a suburb of Prague, horticultural land in Repy, on the outskirts of Prague, a forest in Sucha, now in the Slovak Republic, and an apartment with adjacent land in Dresden, eastern Germany.
In 2009 Kyrou J made interim orders restraining Jan from further dealing with the properties.
In July 2009 Bongiorno J issued an arrest warrant for Jan, following an application by the plaintiffs for contempt. He was arrested at Melbourne airport and held in custody until Byrne J let him out of the clink, with orders that he not leave Victoria.
Kyrou made numerous other orders affecting Jan and the properties and in November 2009 ordered him to pay €10,073,818 in compensation. He appealed and the appeal was dismissed in March 2011, with the court saying:
“Jan’s problem is that, no matter how many barriers he may have erected against particular positions taken by the respondents, and no matter how many of their allegations he may have formally denied, he has never by evidence confronted the gravamen of their case. It is that he has received property the title to which has as its foundation nothing better than that he is the child of his parents. But his parents had not one, but three, children. Each of the other two assert a claim, the equal of that of their brother, to a beneficial interest in that property.”
Jan never paid the compensation ordered by Kyrou and was declared bankrupt in November 2011. The Czech properties remain in the name of his two sons, Paul and David.
In July 2009 Kyrou made orders that Paul and David Talecko be restrained from taking further steps to register the transfers of the European real estate.
After those orders Michael Witt then sent an email to his client Jan Talacko, his wife Judy Talacko, and their children Nicole and Peter:
“Dear All
…
In the new case the judge made orders against Paul and David restraining them from trying to progress the transfers. That he felt that he had power and/or jurisdiction to do this is surprising but nothing surprises me in this case anymore. He also attached a contempt endorsement to these orders.
I have deliberately left Paul and David off this email as I do not want it to be able to be said that they had any notice or knowledge of the orders made against them because for so long as they do not have notice of this then they cannot be in contempt if they do not comply. I therefore strongly advise that no one tells Paul or David anything about this new case other than to warn them to look out for process servers in Prague.
Regards
Michael Witt”
One of the charges in the originating motion said that Witt’s email had “disparaged the court … and was bound to prompt the defendants to misunderstand and disregard the law … and thereby fostered and encouraged contumacious and contumelious disregard of the court and the law”.
J. Forrest J dismissed this charge, finding there was no contempt and no genuine affront to judicial authority.
In evidence Witt said:
“Perhaps I could have had the language toned down slightly … I’m very embarrassed by the email; I was appalled when I re-read it, when this proceeding came to light and I am very sorry about it.”
He acknowledged that he was far too close to his client.
Forrest said this contempt is novel – it does not fall within any of the established categories. He noted Jan Talacko’s antipathy towards the court’s authority and his flouting of orders and his breach of the terms of settlement.
It was submitted that the email in the context of the solicitor’s relationship with Jan Talacko was “inflammatory” and encouraged “an already recalcitrant client to continue his pattern of avoiding court processes and the authority of the court”.
This charge turned on an implication from the email that the court incorrectly had a belief that it had jurisdiction – “nothing surprises me in this case anymore”.
J. Forrest J took into account three factors:
Here Forrest did not see this as a contempt of court because the email was a private communication.
“In my opinion a comment concerning the correctness of a decision of a court could not, absent exceptional circumstances, amount to contempt of the court.”
The email did not contain hostile or intemperate criticism of the court and in any event the comments would not have had any real effect on Jan Talacko, who was already determined to circumvent the court’s orders.
Charge dismissed.
However, there is one more contempt to which Witt has made admissions.
This one focuses on his advice to the Talackos that the defendants in the Czech Republic should not be told of Kyrou’s orders to prevent further moves to transfer the properties.
Forrest says this is a serious contempt because it was an attempt to frustrate the orders of the court. The penalty will be decided later.