FEDERAL COURT OF AUSTRALIA

Frigger v Trenfield (No 3) [2023] FCAFC 49

ORDERS

THE COURT ORDERS THAT:

1.    The appeal be dismissed.

2.    The appellants pay the respondent’s costs of the appeal, including any reserved costs, to be agreed, or failing agreement taxed.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

THE COURT:

Introduction

1    The appellants (Mrs Angela Cecilia Theresa Frigger and Mr Hartmut Hubert Josef Frigger) (hereafter, appellants or Mrs and Mr Frigger) appeal from the decision of the primary judge in Frigger v Trenfield (No 10) [2021] FCA 1500, delivered on 1 December 2021 (Liability Judgment) dismissing the appellants’ application for, amongst other things, declarations that certain bank accounts and residential properties were and are held in the Frigger Superannuation Fund (FSF) on trust for beneficiaries of the FSF and that pursuant to s 116(2)(d)(iii)(A) of the Bankruptcy Act 1966 (Cth) (Bankruptcy Act) are not assets divisible amongst Mr and Mrs Frigger’s creditors as undischarged bankrupts.

2    The appellants, by their re-amended notice of appeal dated 15 June 2022, raise nine grounds of appeal. Those grounds may be briefly summarised as follows:

(1)    Ground 1 – Status of Bankruptcy – The primary judge erred in deciding that certain assets vested in the respondent pursuant to s 58 of the Bankruptcy Act, in circumstances where the primary judge was on notice that, in proceeding WAD 66 of 2021, the appellants claimed the bankruptcy notices were invalid and that sequestration orders were a nullity.

(2)    Ground 2 – Bankwest Account No. 1 – The primary judge erred in finding that the Bankwest Account No. 1 (BW1) was not a trust asset of the FSF.

(3)    Ground 3 – Bank of Queensland Account No. 1 and Bank of Queensland Account No. 2 – The primary judge erred in deciding that the Bank of Queensland Account No. 1 (BOQ1) and Bank of Queensland Account No. 2 (BOQ2) vested in the respondent in circumstances where the respondent failed to identify which funds deposited into BOQ1 and BOQ2 were funds that belonged to the appellants personally.

(4)    Ground 4 – Main Portfolio – The primary judge erred in finding that the shares held by Commonwealth Securities Limited (CommSec) Share Trading Account Portfolio No. 270815 (Main Portfolio) in its custodial service vested in the respondent.

(5)    Ground 5 – Residential Properties – The primary judge erred by deciding that the respondent had an absolute caveatable interest in real properties (the addresses of which are unnecessary to specify for the purposes of this judgment) in Union Street, Bayswater and Cale Street, Como, Western Australia (Residential Properties) on the ground that in specie contributions of those properties by Mrs Frigger to the FSF on 1 July 2014 constituted contraventions of s 66 of the Superannuation Industry (Supervision) Act 1993 (Cth) (SIS Act).

(6)    Ground 6 – Payout of security of costs – The primary judge erred by deciding that the respondent’s conduct in consenting to a payout of security of costs in the Supreme Court of Western Australia proceedings: CACV45/2016, CACV62/2014 and CACV56/2014 did not breach s 82 of the Bankruptcy Act.

(7)    Ground 7 – Respondent’s removal as Trustee in Bankruptcy – The primary judge erred in finding that the respondent’s conduct had not caused the appellants, whether personally or as Frigger Superannuation Fund members, losses occasioned by the lost opportunity to earn dividends and capital gains on share trading on the Main Portfolio and on the BOQ1 fund as a consequence of the Respondent freezing assets of more than $7.5 million.

(8)    Ground 8 – Refusal to assess loss of opportunity to trade claim – The primary judge erred when he refused to determine the appellants’ claims for losses caused by freezing the BOQ1 account and the Main Portfolio account which required the court to completely and finally determine all controversies between the parties.

(9)    Ground 9 – Failure to provide procedural fairness – The primary judge failed to provide the appellants with procedural fairness in case management orders made on 29 November 2019 and during the trial, by denying the appellants the right to know and to be given an opportunity to respond to the case presented against them.

3    The proceeding before the primary judge had a long and complex procedural history which is relevant to understanding the case which was put by the appellants on appeal. For this reason, we now set out the background of the appellants, the procedural history and relevant chronology which provides the framework for the determination of the grounds of appeal.

Appellants’ background

4    The appellants are husband and wife. The appellants are intelligent people and have each held professional roles throughout their working life.

5    Mrs Frigger, is 71 years old and is now retired. Before her retirement she worked as an accountant. Mrs Frigger holds a Bachelor of Accounting from the Western Australian Institute of Technology (now Curtin University). After graduating, Mrs Frigger went on to qualify as a Certified Practising Accountant and a Registered Tax Agent. Mrs Frigger is also a Fellow of the National Tax and Accountants Association. Mrs Frigger managed all accounting records for the FSF and prepared the FSF’s financial statements throughout the years.

6    Mr Frigger is 69 years old. He too is retired. During his working years, Mr Frigger was gainfully employed as a process and commissioning engineer. Mr Frigger also acted as a consultant to companies in this capacity. At one point in time, Mr Frigger also managed the family accounting and investment business, and used his own experience in investments in property, shares, managed funds and bonds to help others start a self-managed investment portfolio (see details surrounding the background of the appellants in: Computer Accounting and Tax Pty Ltd v Professional Services of Australia Pty Ltd [2008] WASC 133 and Legal Practice Board v Computer Accounting and Tax Pty Ltd [2007] WASC 184).

7    It is clear that through investment, entrepreneurship or other means, Mrs and Mr Frigger had accumulated substantial assets by the time they were declared bankrupt.

8    Mrs and Mr Frigger have had, and had prior to the hearing before the primary judge, the opportunity to become familiar with court practice and procedure and important underlying notions such as the onus of proof resting on the party seeking to establish grounds for relief. Our observations of them in the various days of the appeal confirm this.

Procedural history

First instance

9    This appeal arises from an application brought by the first appellant, Mrs Frigger, against Mrs Trenfield seeking relief with respect to BOQ1 and BOQ2, the shares held in the Main Portfolio and the Residential Properties (collectively, the disputed assets), consent orders and costs assessments in the Court of Appeal of Western Australia, and the first respondent’s conduct of the administration of the bankrupt estate.

10    The first appellant filed an originating application on 12 March 2019 as against Mrs Trenfield. By orders dated 14 June 2019 and 31 July 2019, the second appellant, Mr Frigger, was joined as the second applicant and Paul Allen was joined as the second respondent. Mr Allen was subsequently removed as the second respondent by order dated 19 March 2020. For the reasons given in Frigger v Trenfield (No 6) [2020] FCA 934 (Frigger (No 6)), H & A Frigger Pty Ltd (or HAF) as the former trustee of FSF was joined as second respondent. Neither Mr Allen nor HAF is a party to these proceedings.

11    The learned primary judge helpfully summarised in the Liability Judgment at [7] the relief the appellants sought:

(a)    declarations that BOQ1, BOQ2 and the Residential Properties are held in the FSF on trust for the beneficiaries of that fund, and so pursuant to s 116(2)(d)(iii)(A) of the Bankruptcy Act are not assets divisible among creditors;

(b)    compensation for losses the applicants say they have incurred as a result of the first respondent having placed holds or freezes on BOQ1;

(c)    an order requiring the first respondent to remove caveats she has placed on the Residential Properties and to pay any losses caused by the caveats;

(d)    declarations that the various consent orders and costs assessments in the Court of Appeal are ‘incompetent’ pursuant to s 58(3)(b) of the Bankruptcy Act;

(e)    compensation for losses resulting from the Court of Appeal costs orders and orders effectively requiring the first respondent to apply to that court to have the orders set aside;

(f)    orders disentitling the first respondent to remuneration and costs in relation to the above matters;

(g)    orders requiring the first respondent to write to CommSec and the ASX to remove a trading suspension on the Main Portfolio which appears to have been placed following a previous letter from the first respondent to CommSec, and requiring her to say that the securities in that account have not vested in her pursuant to s 58 of the Bankruptcy Act;

(h)    compensation for losses said to have been caused by the suspension of trading in the Main Portfolio;

(i)    an order removing the first respondent as the trustee in bankruptcy of the applicants’ estates; and

(j)    costs.

12    The appellants sought the orders under s 30 of the Bankruptcy Act and also s 90-15(3) of Schedule 2 to the Bankruptcy Act. Some of the orders were also sought in the alternative under s 21 of the Federal Court of Australia Act 1976 (Cth) (FCA Act).

The appellants’ submissions at first instance

13    By orders of the primary judge on each of 14 June 2019, 20 September 2019, 14 January 2020 and 1 July 2020, the appellants were granted leave to amend the originating application. The effect of these amendments was to join the second appellant as a party to those proceedings and to amend the relief sought by the appellants among other amendments discussed further below.

14    As noted by the primary judge, distilling the contentions on which the appellants sought the above relief was a complicated task. The appellants made wide-ranging contentions which came in the form of numerous affidavits and submissions. The difficulty in distilling the appellants’ contentions was further compounded by what the primary judge described as “the changing nature of the positions [the appellants] took in the case over time” (Liability Judgment at [10]). It is not necessary nor possible to canvass all the appellants’ submissions made at trial. However, for the purposes of this appeal, we will synthesise the submissions articulated by the appellants that the primary judge considered to be sufficiently cogent to warrant an express mention.

15    First, as to BOQ1 and BOQ2, the appellants submitted that the money in those accounts was originally earned by the FSF as rental income from two commercial properties (the addresses of which are unnecessary to specify for the purposes of this judgment): one at Edward Street, Perth and the second at Campbell Street, Hobart, which is leased to Officeworks. To establish that the BOQ1 and BOQ2 funds are FSF assets, the appellants’ relied upon several indicia. These included that the Hobart property was purchased in their names as trustees of the FSF, that there was a declaration of trust over the Edward Street property and that a registrar’s caveat was registered on the title. Invoices to the tenants of these properties were said to have been issued by the appellants as trustees of the FSF, with the tenants being directed to pay rent and outgoings to the BW1 account.

16    Secondly, as to the Main Portfolio, the appellants submitted that, although the trading account was opened at a time when Mr and Mrs Frigger were not trustees of the FSF, the surrounding circumstances indicated that the shares then held in the Main Portfolio were purchased in their capacity as trustees of the FSF.

17    Thirdly, as to the Residential Properties, the appellants submitted that those properties were FSF assets. Although each certificate of title of the properties lists Mrs Frigger as the registered owner, the appellants rely upon declarations of trust over the properties made on 1 July 2014 by Mrs Frigger (2014 Declarations) in support of their contention. More specifically, they contend that the properties were contributed to the FSF by Mrs Frigger as in specie transfer by way of these declarations. As a result, the appellants submitted that the first respondent does not have a caveatable interest in the Residential Properties.

18    Fourthly, as to the Court of Appeal orders, the primary judge noted that the basis for the appellants’ claims was difficult to establish from their written submissions (Liability Judgment at [43]). Nonetheless, the appellants’ oral opening distilled two complaints. The first complaint was that the costs liabilities were debts provable in the bankruptcy, and, rather than calling for proofs and adjudicating on them, the first respondent signed consent orders which led to the payment out of the amounts that had been paid in as security for costs. The second complaint was that Mrs Trenfield should not have consented to that payment as the cost liabilities were more than offset by the substantial counterclaims the appellants had against Mr Mervyn Kitay and Clavey Legal.

19    Although the appellants sought declarations that the Court of Appeal orders were “incompetent”, the appellants in oral submissions made clear that they were not seeking for this court to somehow reverse or override the order.

20    Lastly, as to the first respondent’s conduct of the administration of the bankrupt estates, the appellants made a number of allegations in support for the declaration they sought that Mrs Trenfield be removed as trustee in bankruptcy. These were listed in schedule 4 to their written submissions dated 29 June 2020 and summarised by the primary judge in the Liability Judgment at [46]–[48].

Classes of documents in support of the appellants’ claims

21    In support of their submissions, the appellants relied upon numerous classes of documents that they put before the primary judge. This included financial statements, annual returns, audit reports, Personal Property Security Register (PPSR) registrations, tax file number (TFN) notifications, holder identification statements, bank statements and reconciliations among other things.

22    However, as noted by the primary judge, the orders the appellants sought were “on the basis of evidence with many gaps; gaps that they seek to cross with leaps of broad assertion”: Frigger v Trenfield [2019] FCA 1746 at [67] (Frigger (No 1)).

23    Indeed, one major issue that arose at trial was whether the financial statements and annual returns relied upon were reliable. The real possibility that such documents were prepared after the sequestration orders, and so were unreliable, was a real issue.

24    As highlighted by the respondent, the appellants had not put before the primary judge documents evidencing their personal tax returns they asserted were relevant, financial statements, annual returns and audit reports prior to 2015, and CommSec statements prior to 2016, among other things. In other words, in the mass of material placed before the Court at first instance, and on appeal (including in additional tenders on the appeal) no coherent, reliable body or framework of documents was placed before the Court from which any reliable inferences could be drawn (in particular without Mrs Frigger’s evidence as to context) as to what assets and what activity were those of Mr and Mrs Frigger on their personal account and of the FSF. A starting point for such a coherent analysis could have been the kinds of documents referred to in the first sentence of this paragraph.

Discovery orders

25    With respect to Frigger v Trenfield (No 2) [2019] FCA 2009 (Frigger (No 2)), the respondents brought an interlocutory application seeking specific discovery of documents said to be relevant to the source of the funds in BOQ1 and BOQ2, and the capacity in which the Residential Properties and securities in the Main Portfolio are owned. By way of context, the appellants also brought an interlocutory application for summary judgment in respect of the declarations that BOQ1 and BOQ2 are FSF assets.

26    Mrs Trenfield’s submissions in support of her application for discovery were relevantly put in four sworn affidavits. Across the four affidavits, Mrs Trenfield made various statements of purpose as to why she was seeking discovery. In essence, Mrs Trenfield said that she did not know the true nature of the beneficial ownership of the disputed assets based on the available evidence in order to firmly respond to the appellants’ contentions, and that a full and proper investigation is required. Mrs Trenfield provided details of the investigations she had conducted in performing her duties as the trustee in bankruptcy.

27    Ultimately, the primary judge found that the respondents were not pursuing discovery for any purpose collateral to the just resolution of the issues in the proceedings, and thus did not amount to an abuse of process.

28    Similarly, in Frigger v Trenfield (No 6) [2020] FCA 934 (Frigger (No 6)), Mrs Trenfield also brought an interlocutory application for discovery of certain miscellaneous documents pertaining to (i) an alleged additional CommSec portfolio, (ii) notices from a share registry (Computershare), and (iii) certain bank statements. She submitted that these documents were relevant to the issues of the beneficial ownership of the shares in the Main Portfolio, the appellants’ claim for losses regarding the freezing of the Main Portfolio, whether Mrs Trenfield made any claim to hold a power of attorney on some 40 shareholdings held in the Main Portfolio, and the source of trust funds traceable into other accounts.

29    Relevantly, the discovery orders made with respect to the St George and Citibank bank statements directly relate to the discovery orders made in Frigger (No 2). With respect to the St George statement, the primary judge clarified that it was discoverable under the previous orders (Frigger (No 6) at [64]). Similarly, the primary judge explained in his reasons why the appellants’ assertion that further pages of a relevant Citibank statement were not included in the previous discovery order was incorrect (Frigger (No 6) at [65]). The specific discovery orders were made for the purpose of addressing “any doubt”, noting that the Citibank account “falls within that order”.

30    Consequentially, two sets of discovery orders were made each on 29 November 2019 (Frigger (No 2)) and 25 June 2020 (Frigger (No 6)).

31    The 29 November 2019 orders required the appellants to provide the following classes of documents:

(1)    all documents, including but not limited to bank statements, deposit slips, invoices, cheques, cheque butts, withdrawal forms, transfer instructions and receipts evidencing the source of the funds held in [BOQ1 and BOQ2] …

(2)    all documents, including but not limited to all bank statements, application forms, agreements, accounts and correspondence evidencing the person or entities which have or had a legal or beneficial interest in [BOQ1 and BOQ2];

(3)    all documents … evidencing the purchase, sale, transfer or conveyance of, and the identity of the legal and beneficial owner of [various properties, including the Residential Properties].

32    The 25 June 2020 orders further required the appellants to provide the following additional classes of documents:

(a)    All documents that evidence the holding, purchase, sale, transfer, subscription or other conveyance of, and the identity of the legal and beneficial owner of, the securities identified in the Commonwealth Securities Ltd portfolio that is referred to in the affidavit of Angela Frigger sworn 16 September 2019 at annexure AF6, page 14 …

(b)    All bank statements for the St George bank account identified in the affidavit of Kelly-Anne Trenfield sworn 1 June 2020 at annexure KAT-9, pages 42 to 43, whether in the name of Jessica Frigger or any other person (excluding pages 1 and 2 of the statement of account for the period 26 February 2017 to 7 July 2017).

(c)    All bank statements for the Citibank account identified in the affidavit of Kelly-Anne Trenfield sworn 1 June 2020 at annexure KAT-8, page 44, in the name of “Angela Frigger & Hartmut Frigger ATF Frigger Super Fund” (excluding page 3 of 3 for the statement for 1 November 2018 to 30 November 2018).

33    The primary judge refused to make orders with respect to a second category of documents relating to the Computershare notices.

Judgments

34    Over the course of the matter, the primary judge delivered 13 judgments. It is convenient to address these in short compass, in turn, below.

Interlocutory judgments

35    Frigger (No 1), concerned the appellants’ interlocutory application seeking to compel Mrs Trenfield to retract a letter that she sent to CommSec on 28 August 2019. The appellants also sought orders requiring Mrs Trenfield to send a letter to ASX Settlement Pty Ltd with the effect of changing the holder status of the Clearing House Electronic Sub-register System holder identification number associated with the CommSec portfolio so that shares can be traded on the Australian Securities Exchange, and that Mrs Trenfield make good any loss to the fund. Each of these proposed orders was refused.

36    The primary judge made a number of observations with respect to the evidence relied upon in support of the appellants’ interlocutory application which are worth noting. Importantly, to succeed at trial, the primary judge identified that Mr and Mrs Frigger needed to:

(1)    point to an objectively manifested intention on their part (or the part of any other relevant entity) that the shares were to be held on trust for another person, which may be inferred from all the circumstances (Frigger (No 1) at [44]); and

(2)    to establish that, at the commencement of their bankruptcy on 20 July 2018, the shares in the portfolio either did not belong to or were not vested in them, or if they were, they were held on trust for another person (Frigger (No 1) at [17]).

37    This was particularly pertinent in circumstances where one would expect that more specific evidence of the requisite intention would be easy to adduce (Frigger (No 1) at [45]).

38    As will be discussed in due course (see [247]–[257] below) the importance of objectively manifested intention is the need to prove acts undertaken that are sufficient to permit the conclusion that assets were or became part of a trust fund (the FSF). The acts to be proven, are acts or facts in the world that are done or exist that carry with them the inference that the appellants’ intention which was effected by the acts was to have the assets form part of the FSF.

39    In analysing the evidence, the primary judge noted that there were “uncertainties” (Frigger (No 1) at [43]), including that the evidence was at a “high level of generality” (Frigger (No 1) at [44]) and “at best equivocal” (Frigger (No 1) at [45]) or was “little more than a broad assertion” (Frigger (No 1) at [44]). Similar comments in relation to the evidence were repeated in later published reasons, which will be discussed below. No direct evidence was adduced of any share registry having noted the beneficial ownership of shares in their records (Frigger (No 1) at [45]). A further example was the FSF balance sheet, which was prepared by Mrs Frigger at an undisclosed time for an undisclosed purpose (Frigger (No 1) at [46]). Neither was any evidence adduced revealing exactly when nor how the appellants’ children, Jessica and Michael Frigger, were appointed as trustees. Similarly, there was no evidence adduced to support the contention that the nature of the security interest that was registered over the Main Portfolio in the name of an entity called “Frigger Super Fund” was in ‘the beneficial ownership’ of the FSF, nor why the registrations were lodged (Frigger (No 1) at [49]). The appellants also failed to explain the fact that none of the shares appeared to have been acquired in the name of HAF. The primary judge noted that Mrs Frigger’s evidence may be supported by holder identification statements or other share registry records; however, these were not produced (Frigger (No 1) at [50]). Finally, there was no evidence explaining why the shares that were held at the time when the appellants were replaced as trustees had not been transferred into the name of the new trustee, despite that being a requirement of the FSF Trust Deed cl 167 (Frigger (No 1) at [51]). Although there was a serious question to be tried, it was this kind of evidentiary uncertainty that ultimately persuaded the primary judge to refuse the orders sought by the appellants: Frigger (No 1) at [52].

40    The second judgment, Frigger (No 2), has been relevantly summarised above save with respect to the appellants’ interlocutory application for summary judgment, which was ultimately refused. At this stage it is also worth noting comments made by the primary judge with respect to the evidence adduced in support of the interlocutory applications for summary judgment and discovery. As his Honour had said in Frigger (No 1), to succeed at trial, the appellants would need to establish that, at the commencement of their bankruptcy, the BOQ1 and BOQ2 accounts either did not belong to or were not vested in them, or if they were, they were held on trust for another person (Frigger (No 2) at [15]). The appellants alleged that this was established on the evidence as a result of transactions by which the trustee of the trust exchanged other trust assets for BOQ1 and BOQ2. However, as pointed out by the primary judge, the appellants would need evidence establishing that at the point when the funds first became subject to the trust, there was an objectively manifested intention to that effect (Frigger (No 2) at [17]). Critically, his Honour noted that Mr and Mrs Frigger’s application for summary judgment hinged upon the extent to which the evidence they adduced could establish that BOQ1 and BOQ2 were FSF assets at the time of commencement of the bankruptcy (Frigger (No 2) at [22]). His Honour drew particular attention to the fact that BOQ1 was in Mr Frigger’s name and BOQ2 was in Mrs Frigger’s name (Frigger (No 2) at [15]).

41    Regarding the FSF itself, the primary judge noted that the evidence adduced was, again, “at a high level of generality”, stating that “documentation of [certain] contributions or any specific evidence to establish that [these contributions] were transferred to the Friggers in their capacity as trustee of the FSF are absent from the affidavits” (Frigger (No 2) at [26]). The primary judge also made the following observations:

(1)    The deed of amendment of the FSF as to when the appellants ceased to be trustees made no mention of 21 July 2018, being the date Mrs Frigger claimed this change of trustee occurred, and was dated 1 July 2018, the date to which Mrs Frigger claimed the removal was backdated (Frigger (No 2) at [25]).

(2)    The notification of change of trustee to the Australian Business Register filed on 21 July 2018 removing the appellants as individual trustees and replacing them with HAF stated that these changes were to take effect from 1 July 2018 did not necessarily support a finding that the appellants were trustees of the fund at the time that BOQ1 was opened (Frigger (No 2) at [25]).

(3)    Although being potentially probative (albeit without the benefit of cross-examination and the context of a full hearing), his Honour could make no finding about when (or whether) the change of trustees occurred based on a minute of meeting of the FSF trustees dated 21 July 2018, recording resolutions that the four individual trustees be removed and replaced with HAF, as relied upon by the appellants (Frigger (No 2) at [25]).

42    Regarding BOQ1, there was also no evidence as to when the account was given the FSF designation (Frigger (No 2) at [32]). The most that was provided was a number of internet banking printouts that merely possessed the label ‘Frigger Super Fund’ beneath a heading ‘Account Name’, but did not disclose who gave it this denotation, or when or how this came about: Frigger (No 2) at [32]. As there was no further evidence in support, the primary judge placed no weight on this evidence: Frigger (No 2) at [32]. Although the appellants adduced an email dated 13 July 2018 from Mr Frigger providing Bank of Queensland with a TFN for the account, which appeared to be the same for FSF, the primary judge did not find this, by itself to be compelling: Frigger (No 2) at [33].

43    Regarding BOQ2, a bank statement for this account was in evidence indicating that BOQ1 was opened with a deposit of $50 withdrawn from BOQ2 on 2 July 2018. It made no reference to the FSF. There was also no documentation verifying a claim by Mrs Frigger in her affidavit sworn 25 July 2019 that Bank of Queensland advised her that it was not possible to transfer the funds from BOQ3 to (seemingly) BOQ1 (Frigger (No 2) at [37]).

44    Regarding BOQ3, two bank statements for this account were produced but also made no reference to the FSF. Similarly to BOQ1, the internet banking printouts produced also denoted the account name as “Frigger Super Fund”, but no further evidence was produced in support (Frigger (No 2) at [39]). A balance sheet of the FSF “As of June 2018” included a line item that appeared to correspond with the total balance of BOQ3 as at 30 June 2018. However, the document was headed “H & A Frigger atf Frigger Super Fund”, which the primary judge noted appeared to suggest that the balance sheet was generated some time after 1 July 2018, and no evidence was produced as to when it was prepared or by whom (Frigger (No 2) at [41]). The primary judge therefore found that this document had limited use and that it did not establish that the respondents did not have a reasonable prospect of defending against the allegation that the funds in BOQ1 were held on trust on the terms of the FSF: Frigger (No 2) at [41].

45    Bank statements were also produced in evidence by Mr and Mrs Frigger which seemed to indicate that the source of the funds in BOQ2 came from two HSBC accounts. However, none of those bank statements mentioned the FSF and the only documentary evidence in support of the appellants’ submission that these accounts were held in their respective names as “trustee of the Frigger Super Fund” was a single document. This document was an invoice that was issued on 1 October 2017 for rent from the Hobart property, headed “Angela and Hartmut Frigger atf Frigger Super Fund”, directing payment to one of the HSBC accounts: Frigger (No 2) at [44]. Although relevant, the primary judge found that it alone was hardly conclusive: Frigger (No 2) at [44].

46    Regarding BW1, which was asserted to be (at least in part) the “start of the trail” of transfer of funds, that account also made no reference to the FSF. The one invoice in evidence which directed payment to this account which was issued by HAF as trustee for the FSF is dated 5 February 2019. The primary judge found that this invoice provided little support to Mr and Mrs Frigger’s case as it post-dated the sequestration order: Frigger (No 2) at [46]. The only other two pieces of evidence in support of the BW1 account being an asset of the FSF was a statement to that effect in Mrs Frigger’s first affidavit and a second statement in another affidavit of Mrs Frigger. The first statement was found by the primary judge to be a statement made “at a high level of generality”: Frigger (No 2) at [47]. The second statement was to the effect that the appellants had provided evidence and explanations to the Official Trustee, after which it determined the account was superannuation funds. However, the primary judge did not find there to be any documentary evidence provided as to what Mrs Frigger alleged to be the Official Trustee’s conclusion: Frigger (No 2) at [48]. The primary judge also found that an audit report which was annexed to Mrs Frigger’s first affidavit of 6 March 2019 did not contain any financial statements nor did it establish any other information pertaining to what the assets of the trust were at the time that affidavit was made, let alone at the time of the bankruptcy in 2018: Frigger (No 2) at [49].

47    The primary judge found that the evidence detailed above was sufficient to establish a prima facie case that the ultimate source of funds in BOQ1 and BOQ2 was the BW1 account. The primary judge also concluded that this finding was not the same as a finding that there was a prima facie case that the respondents had no reasonable prospect of defending the claim that the funds are held on trust on the terms of the FSF Trust Deed, to allow the summary judgment application: Frigger (No 2) at [62].

48    Specifically, his Honour provided two main reasons for this. First, as highlighted above, the evidence consisted of little more than “assertions”, without any documentary evidence or persuasive testimony in support of their application: Frigger (No 2) at [63]. Second, despite some evidence which was given little to no weight, there was an “almost complete absence of any objective manifestation of an intention that BOQ1 is held on the terms of the FSF”: Frigger (No 2) at [64]. More pointedly, the primary judge noted how the relevant “BOQ” accounts as well as BW1, were opened in Mrs Frigger’s name only, and this pointed “objectively in the opposite direction” of manifesting an intention that these accounts be part of the FSF: Frigger (No 2) at [65]. The cumulative effect of this was that the evidence failed to establish a pattern of the trustees of the FSF moving funds from one account in their names (as trustees) to another in their names (as trustees): Frigger (No 2) at [66]. The documentary evidence fell short of proving that the funds were subject to the terms of the FSF Trust Deed.

49    Although the appellants did not seek summary judgment concerning the declarations about the ownership of the Residential Properties, the evidence was relevant to the respondents’ application for discovery. The primary judge made the following observations about the relevant evidence:

(1)    The declarations of trust over the relevant properties noted that the powers of the trustee over the land are contained in the FSF Trust Deed, despite Mrs Frigger being named as the trustee (Frigger (No 2) at [72]).

(2)    The lease for the Como property notes that the owner is Mrs Frigger as trustee for the FSF, but is both undated and unsigned; therefore, little weight could be placed on it (Frigger (No 2) at [73]).

(3)    There is no documentary evidence of the alleged ‘in specie contributions’ of the Residential Properties (Frigger (No 2) at [75]).

(4)    The evidence was not clear as to whether the land at the property (the address of which is unnecessary to specify for the purposes of this judgment) at South Western Highway, Armadale was sold at 11 February 2016 or any other time (Frigger (No 2) at [76]).

(5)    The invoices for rent and other charges for the Residential Properties and the Hobart property issued in the name of HAF as trustee for the FSF were dated from February and March 2019, well after the bankruptcy (Frigger (No 2) at [78]).

50    Regarding the Residential Properties, the primary judge observed that such evidence was probative, though the documents that post-dated the sequestration orders must be treated with caution (Frigger (No 2) at [78]–[79]).

51    The primary judge found that there were “real doubts” about the source of the funds in the BW1 account, and there was a lack of any documentary evidence of any objective manifestation of intention that the funds in any of the bank accounts were held on trust on the terms of the FSF (Frigger (No 2) at [81]).

52    The third judgment, Frigger v Trenfield (No 3) [2020] FCA 150, involved the appellants’ application for leave to amend the originating application to add a claim for non-economic damages for defamatory imputations. This arose in relation to a letter published by Mrs Trenfield to the Australian Financial Complaints Authority on 27 September 2019. The application was relevantly dismissed.

53    The fourth judgment, Frigger v Trenfield (No 4) [2020] FCA 797, mainly concerned the date at which the calculation of the alleged losses with respect to the Main Portfolio ought to be fixed. The primary judge ordered that the trial be confined to the issues in the then third amended originating application which did not claim losses (other than certain minor losses).

54    The fifth judgment, Frigger v Trenfield (No 5) [2020] FCA 827 (Frigger (No 5)), involved the appellants’ interlocutory application seeking orders that Mrs Trenfield is guilty of three counts of contempt of court, and an order for punishment for the alleged contempt. The appellants alleged that Mrs Trenfield had breached an implied undertaking to the Court not to use certain documents obtained in the course of those proceedings other than for the purposes of those proceedings. The appellants also sought summary judgment with respect to final relief for Mrs Trenfield’s removal as trustee in bankruptcy, and a separate order that the administration of the bankrupt estates be returned to the Official Trustee. The interlocutory application was ultimately dismissed. His Honour held that Mrs Frigger was not compelled to file an affidavit annexing the two documents that were the subject of the charges either by reason of a rule of court or a specific order of the court or otherwise: Frigger (No 5) at [10], [14]–[18]. After examining the divergent lines of authority concerning whether production must be compulsory for the implied undertaking to arise, the primary judge ultimately found that it was not necessary to decide this issue as Mrs Frigger’s affidavit of 6 March 2019 was sworn and filed voluntarily: Frigger (No 5) at [59]–[60]. Ultimately, the primary judge found that no relevant element of compulsion was present, no implied undertaking attached and Mrs Trenfield was not guilty of the three charges of contempt of court: Frigger (No 5) at [64]–[65].

55    In the sixth judgment, Frigger (No 6), the primary judge considered a number of interlocutory applications which were brought by each of the parties.

56    The appellants filed an application for leave to amend their originating application in terms of a minute of fourth amended application.

57    The first respondent filed applications for the joinder of certain parties as additional respondents, leave to file a cross-claim out of time and for discovery. The appellants’ application was partly refused.

58    Three changes were proposed:

(a)    to make clear that the appellants were suing in their capacity as trustees of the FSF;

(b)    to amend certain declarations sought so that assets that are the subject of the declarations are no longer described as being held by the appellants as “bare” trustees; and

(c)    to seek additional orders requiring the first respondent to remove a “stop” said to have been placed on a bank account which appears to be associated with a share portfolio that is in issue in the proceeding, and to seek “pre-judgment statutory interest” on the money in that account: Frigger (No 6) at [4].

59    The first change was permitted without objection from the first respondent: Frigger (No 6) at [5]. The second change was also permitted, as the primary judge did not consider that the removal of the word ‘bare’ would affect the substance of the issue raised by the declaration sought: Frigger (No 6) at [7]. The third change was ultimately refused, as the primary judge found that a powerful factor militating against granting leave was that the first respondent offered to undertake that if the shares in the Main Portfolio are found to be FSF assets, she would write to the bank asking that the freeze be removed, in return for the application for leave to amend be withdrawn: Frigger (No 6) at [14]. This represented the best possible outcome for resolving a relatively minor issue without involving the court: Frigger (No 6) at [14]–[15]. As the appellants rejected the offer “for no good reason”, leave was refused: Frigger (No 6) at [17].

60    The first respondent’s joinder application was refused save with respect to granting leave to amend the originating application to identify that the appellants were suing in their capacities as trustees as well as their capacities as regulated debtors, and joining HAF as a party. The first respondent sought to join Mr and Mrs Frigger to the proceeding as respondents in their capacity as trustees of the FSF as well as HAF and the appellants’ adult children: Frigger (No 6) at [18]. As the primary judge granted leave to amend the originating application to make clear that the appellants were suing in their capacity as trustees as well as in their capacity as regulated debtors, the first part of the joinder application was refused: Frigger (No 6) at [31]. The joinder application with respect to HAF was granted as the company was an immediate former trustee of the FSF at relevant times and the appellants were its directors and shareholders: Frigger (No 6) at [38]. With respect to the appellants’ adult children, the primary judge did not consider it appropriate to grant leave. This was because the orders sought by the appellants were held not to affect them in any prejudicial way: Frigger (No 6) at [39]. Moreover, if an order in favour of the appellants was made, it would not be detrimental to the appellants’ adult children, rather they would benefit from it: Frigger (No 6) at [40]. Lastly, among other reasons, the primary judge found that the possibilities that the appellants’ adult children are still trustees, or will be able to commence their own proceedings to re-agitate the issues before that proceeding, were not more than theoretical: Frigger (No 6) at [46].

61    The remainder of the first respondent’s interlocutory applications dealt with in Frigger (No 6) met with mixed success. With respect to the application for leave to cross-claim, although the primary judge found that there was a close connection between the subject matters of the proceeding and of the proposed cross-claim (Frigger (No 6) at [50]), his Honour also found that prejudice was likely to arise Frigger (No 6) at [51]. With respect to the application for particular discovery, orders were subsequently made, as discussed at [25]–[33] above. Regarding the first category of documents sought, the primary judge found that evidence produced by Mrs Frigger gave rise to a possibility that another CommSec portfolio was used by the trustee of the FSF to trade shares held in that capacity. The primary judge considered that such evidence could therefore shed light on whether the shares in the Main Portfolio had also been held in that capacity Frigger (No 6) at [58]. Regarding the second category of documents, the primary judge ultimately held that notices from Computershare were wholly uninformative and would not likely have any relevance to the proceeding Frigger (No 6) at [62]. Finally, regarding the third category of documents, the primary judge noted that:

(1)    the name under which the St George account was registered may have been relevant in the proceeding, given that it was claimed to be the source of trust funds traceable into other accounts. Specifically, although the St George account had already been the subject of the discovery orders of 29 November 2019, that occurred on the assumption that it was in Mrs Frigger’s name, whereas evidence had been produced showing that it was in Jessica Frigger’s name: Frigger (No 6) at [63]–[64]; and

(2)    the appellants incorrectly resisted discovery of the other pages of a Citibank statement from November 2018. Although the Citibank account was not listed specifically in the discovery orders of 29 November 2019, the relevant order had not been limited to the specified accounts, it actually extended to “accounts held in the name of any or all of the applicants and the trustees (including the former trustees)”: Frigger (No 6) at [65]. The appellants merely made a “bald assertion” that the Citibank accounts were not relevant in resisting discovery: Frigger (No 6) at [65].

62    The seventh judgment, Frigger v Trenfield (No 7) [2020] FCA 1740 (Frigger (No 7)), involved the appellants’ application to re-open the trial hearing. It was filed after the trial had ended and judgment was reserved. It also included a list of orders sought by the appellants, in the event that leave to re-open be granted. The purpose of the re-opening application was to give the appellants the opportunity to object to parts of, and exhibits to, certain affidavits that had already been received into evidence, as well as to seek to adduce further evidence in support of those objections and additional affidavits sworn by Mr and Mrs Frigger respectively. Specifically, the appellants submitted that:

(1)    a large part of the affidavit evidence of the first respondent that had been admitted should be excluded as it had been obtained improperly or unlawfully: Frigger (No 7) at [2]; and

(2)    the first respondent should be ordered to write to various share registries and retract the letters that she sent to them on 24 April 2020 and 29 September 2020, on the alleged basis that they included falsehoods: Frigger (No 7) at [3].

63    The appellants submitted that this arose in the context where they misapprehended the above claimed facts and law, and only became aware of this when served with the first respondent’s affidavit of 16 September 2020. As such, they were unable to object to the first respondent’s evidence during the trial or prior to its commencement. It is further worth noting that, in response to the appellants’ allegation that the letter of 3 September 2020 sent by the first respondent to Just SMSF Audits was false, the primary judge informed the appellants of the provisions of s 138 of the Evidence Act 1995 (Cth) (Evidence Act).

64    The application was ultimately dismissed on the basis that the appellants failed to demonstrate any good reason to re-open the trial given that the parties had already closed their cases, both Mrs Frigger and Mrs Trenfield were cross-examined on the basis of the evidence that had been admitted up to that point, and judgment had been reserved: Frigger (No 7) at [26]. With respect to the claimed inability to object to the first respondent’s evidence, the primary judge noted that the letters the appellants referred to were all in evidence in applications well before the trial started, and that the 3 September 2020 letter had also been obtained during the course of the trial: Frigger (No 7) at [27]. Further, it was noted that the appellants had always been “alive to their ability to allege impropriety against Mrs Trenfield on [the basis that Mrs Trenfield’s letter of 28 August 2019 to CommSec was an ‘abuse of process’]”: Frigger (No 7) at [29]. While they might not have known the precise terms of s 138 of the Evidence Act, they had sufficient knowledge to claim that the evidence should be excluded because it was obtained by Mrs Trenfield abusing her power as was actually claimed by Mrs Frigger in her affidavit filed on 18 September 2020: Frigger (No 7) at [30].

65    Even though the primary judge acknowledged that the four established classes of reasons for re-opening a matter are not closed, the circumstances were such that they did not justify such an outcome: there was a “lack of a satisfactory explanation for why the objection was not raised during the trial”: Frigger (No 7) at [32]. Neither did the appellants present clear evidence of serious illegality or impropriety by another party to justify re-opening the matter: Frigger (No 7) at [34], [41]. The appellants also failed to explain why they did not raise an objection to the evidence they sought to exclude on the basis that it was adduced solely to impugn Mrs Frigger’s credibility: Frigger (No 7) at [45]. Furthermore, were the objections upheld, a large volume of documentary evidence and a significant quantity of oral evidence would have to have been excluded. This would have posed significant implications and illustrated “why objections of that kind need to be made and determined during the trial rather than after it”: Frigger (No 7) at [47].

66    The appellants also sought leave to re-open for the purpose of producing further evidence, namely, Mr Frigger’s (at that time) new affidavit of 27 October 2020. The primary judge acknowledged that the affidavit, which attached an email dated 28 September 2020 from one of the share registries, answered questions concerning a potentially significant issue in the proceeding: Frigger (No 7) at [50]. Even so, the attached email was merely a “general statement … unlikely to assist the court” concerning the dates on which an unspecified TFN was entered on the respective share registry’s system across different holdings: Frigger (No 7) at [50]. Mr Frigger’s affidavit concerned matters that were clearly in issue at the trial, which could have been adduced then. Similarly, the primary judge therefore held that there was no good reason to allow the appellants to adduce that evidence after the trial had finished: Frigger (No 7) at [51]. The same reason was given for rejecting leave to re-open for the purpose of putting into evidence an affidavit which Mrs Frigger swore on 17 September 2020: Frigger (No 7) at [52].

67    It is worthwhile addressing, at this point, two other applications for leave to re-open that had been submitted during the course of the trial on both 7 and 9 September 2020 and 21 September 2020 respectively. Each related to the issue of the reliability of certain financial statements and annual returns, as noted above.

68    As to the first application on 7 and 9 September 2020, the primary judge gave the appellants leave to re-open their case to tender certain documents. The application was not opposed and the documents were admitted into evidence. The appellants made several submissions in support of their re-opening application, including:

(1)    to establish that FSF continued to be a regulated and complying fund after 30 June 2018 (Transcript 2020-09-07 T.723; but see T.729);

(2)    that “the BOQ account specifically only came into existence after the end of the financial year 30 June 2018 … [a]nd so, it doesn’t appear in any financial statement which is in evidence in the court” (Transcript 2020-09-07 T.723);

(3)    “to prove that the Bank of Queensland bank account was held in the [FSF]” (Transcript 2020-09-07 T.724);

(4)    to negate the first respondent’s allegation the appellants advised various share registries of the FSF’s TFN only in September 2019 (Transcript 2020-09-07 T.724); and that

(5)    there was not effectively a 50 per cent withholding tax on the dividends (Transcript 2020-09-07 T.725).

69    The reason for granting leave was that his Honour was satisfied that the documents were arguably relevant for the purpose of establishing that BOQ1 and BOQ2 were FSF assets and that the TFN for the FSF had been notified to share registries before September 2019: Liability Judgment at [260].

70    As to the second application on 21 September 2020, the primary judge refused to grant leave. The appellants sought leave after counsel for the first respondent had delivered his oral closing submissions and on the same day on which the appellants made their closing submissions. The basis of the application were the following purposes:

(1)    to admit into evidence an account transaction list for the FSF which Mrs Frigger had obtained from the Australian Taxation Office (ATO) Business Portal;

(2)    to admit into evidence a copy of the 2017 annual return for the FSF which, Mrs Frigger said, she had posted to the ATO as a paper return; and

(3)    to recall Mrs Frigger as a witness to respond to what she described as “numerous false allegations of substantial wrongdoing against the [appellants], which allegations effectively amounted to tax fraud”.

71    Mrs Frigger’s affidavit dated 17 September 2020 in support of this application listed some 40 “false allegations”. The primary judge noted that this list appeared to have been based on Mrs Frigger’s contemporaneous notes and presumed for the purposes of the application that it was accurate: Liability Judgment at [263].

72    The affidavit provided more succinctly the “essential basis” of Mrs Frigger’s application to be recalled as a witness pursuant to s 46 of the Evidence Act:

6.    At no time during cross-examination was it put to me that:

6.1    No financial statements had been prepared by me for FSF prior to sequestration date;

6.2    All financial statements were prepared after sequestration date;

6.3    All annual returns were audited and lodged after sequestration date;

6.4    My husband and I decided after sequestration date what assets we would allege are trust assets and what assets are not;

6.5    The valuations of Hobart and Perth in June 2017 were falsely understated.

73    It is worth noting that many of these grounds were substantially repeated in Ground 9(g) of the appellants’ amended notice of appeal.

74    As submitted and accepted by the primary judge, these documents appeared to be relevant to the question of when the financial statements and annual returns were prepared, an important issue in the proceeding: Liability Judgment at [265].

75    Notwithstanding this, the application was nevertheless dismissed. The critical reason for this was that the appellants had been well and truly on notice, even spanning back before the trial, of the importance of such documents and that this would be in issue and that the appellants had ample opportunity to adduce evidence before they closed their case: Liability Judgment at [266]. As summarised above, these issues and the importance of their and the FSF’s financial records were raised as early as the first interlocutory judgment in Frigger (No 1). These issues and the lack of complete documentation were further raised and addressed comprehensively in the first respondent’s written opening submissions filed 12 July 2020, 15 days before the commencement of the trial, and noted that the evidence was either “generally unreliable”, “should be given no weight”, “they were prepared by Mrs Frigger with no explanation as to when they were prepared”, “they were likely prepared after the sequestration order”, and “were full of inconsistencies and accurate information such that they cannot be relied on as a source”: Liability Judgment at [268]. Mrs Frigger was also extensively cross-examined on this issue during the trial: Liability Judgment at [269]. Similar to the reasons given in Frigger (No 7), the evidence the appellants sought to adduce at this stage could have been produced during the trial: Liability Judgment at [271]. The primary judge relevantly said that “[the appellants] were seeking to plug a gap in their case which the first respondent highlighted in closing submissions”: Liability Judgment at [274]. Furthermore, the primary judge held that there was no other good reason why the interests of justice required the case to be re-opened: Liability Judgment at [271]. As such, leave to recall Mrs Frigger under s 46 of the Evidence Act was refused.

76    The eighth judgment, Frigger v Trenfield (No 8) [2021] FCA 569, concerned a subsidiary interlocutory application brought by Mrs Trenfield responding to the appellants’ stay application (which is summarised immediately below) to set aside a notice to produce that had been served by the appellants under r 30.28 of the Federal Court Rules 2011 (Cth) (Rules). Orders were made pursuant to r 1.34 of the Rules dispensing with any requirement for the first respondent to comply with this notice to produce.

77    The ninth judgment, Frigger v Trenfield (No 9) [2021] FCA 652, involved the appellants’ application for a stay of the delivery of judgment in the proceeding, which at the time of the application had been reserved. The basis for the stay application was that the appellants had commenced a separate proceeding in the court for the annulment of their bankruptcies. The application was ultimately dismissed.

Liability judgment

78    The final judgment, (the Liability Judgment), comprehensively addressed the substantive issues in the proceeding below. It numbers some 751 paragraphs across 226 pages. For the sake of brevity, only those elements pertinent to the procedural history of the proceeding below and this appeal will be summarised.

79    The trial judge helpfully grouped the relevant issues as follows (which will also be dealt with in turn here):

(1)    whether the disputed assets (i.e. the BOQ1 and BOQ2 accounts, the Main Portfolio, and the Residential Properties) are property divisible amongst the creditors of the bankrupt estates;

(2)    issues concerning orders relating to costs that were made by the Court of Appeal of Western Australia; and

(3)    whether the first respondent should be removed as trustee of the appellants’ bankrupt estates.

Costs judgments

80    The eleventh judgment, Frigger v Trenfield (No 11) [2022] FCA 326 (Frigger (No 11)), concerned orders sought by the first respondent relating to the costs of the proceeding, following the delivery of the Liability Judgment. From a high level, the appellants were ordered to pay the first respondent’s costs of the proceedings on a party-party basis.

81    Relatedly, the twelfth judgment, Frigger v Trenfield (No 12) [2022] FCA 900 (Frigger (No 12)), determined the quantum of costs that are to be payable as ordered in Frigger (No 11).

82    Finally, the thirteenth judgment, Frigger v Trenfield (No 13) [2022] FCA 906, involved an interlocutory application that was brought by the appellants to suspend the judgments in Frigger (No 11) and Frigger (No 12). The primary judge dismissed the application.

The witnesses

83    For the sake of completeness, it is worth repeating the primary judge’s observations as to the reliability of the evidence provided by the two witnesses: Mrs Frigger and Mrs Trenfield. Mr Frigger did not give evidence.

84    With respect to Mrs Frigger, the primary judge concluded that she had knowingly altered documents which she put into evidence, in order to create a false impression that the documents supported the appellants’ case: Liability Judgement at [51]. His Honour relied upon the following evidentiary issues to reach this conclusion.

85    First, the St George Bank statement annexed to Mrs Frigger’s affidavit sworn 6 March 2019 included the notation “Frigger Super Fund” beneath the account name “Mrs A Frigger”. Yet, an identical bank statement bearing the same account number and identical transactions annexed to Mrs Frigger’s affidavit sworn 20 April 2020 included the notation “Jessica Ann Frigger” beneath the account name “Miss J Frigger”. An email exchange between Mrs Trenfield’s staff and Westpac Banking Corporation annexed to Mrs Trenfield’s affidavit sworn 22 May 2020 noted that the account was “not held under Hartmut Hubert Josef Frigger and Angela Cecilia Therese Frigger”: Liability Judgment at [58]. In cross-examination, Mrs Frigger explained that the account was not in her name and that she included the ‘Frigger Super Fund’ notation herself: Liability Judgment at [60]–[62]. The primary judge found Mrs Frigger’s explanations implausible and were provided “in an attempt to dispel the obvious inference … that Mrs Frigger altered the document … in an attempt to persuade the court that it was an asset of the FSF”: Liability Judgment at [65].

86    Secondly, similar to the St George Bank statement, the ‘Financial Year Summary’ from CommSec showing the value of the Main Portfolio as at 30 June 2018 annexed to Mrs Frigger’s affidavit sworn 6 March 2019, also included a similar notation to the FSF. Yet, the same document obtained by Mrs Trenfield and annexed to her affidavits sworn 11 September 2019 and 22 May 2020 did not bear this notation. This inconsistency was further expounded by other CommSec financial year summaries from different accounts which did include references to the FSF. The primary judge found Mrs Frigger’s explanations to be similarly implausible for a similar purpose: Liability Judgment at [83]–[84].

87    Thirdly, other matters concerning Mrs Frigger’s credibility were also canvassed: Liability Judgment at [86]–[87]. Most particularly, the primary judge found her demeanour in the witness box to be unconvincing: Liability Judgment at [88]. The totality of the above evidence led to the primary judge concluding that Mrs Frigger was not a truthful witness: Liability Judgment at [89].

88    Conversely, the primary judge concluded that, unlike Mrs Frigger whose credibility was central to the proceeding being the party with the onus of proof and most of the contentious evidence, Mrs Trenfield presented as an experienced professional in the witness box, although could have been more forthcoming in some circumstances: Liability Judgment at [92]–[95].

89    The primary judge’s general or overarching findings of credit against Mrs Frigger and specific findings of credit against her affecting inferences drawn or not drawn, together with places where the primary judge declined to make an adverse finding against Mrs Frigger were as follows:

Conclusions as to evidence

90    As a general observation, the primary judge acknowledged that it can be inherently difficult to prove the requisite manifestation of intention: Liability Judgment at [155]. Notwithstanding, the appellants’ case was made more onerous given the lack of “any verbal statements of any kind, written or spoken, formal or informal, expressing an intention that the disputed assets be part of the FSF at relevant times” (original emphasis). The most that was provided were the 2014 Declarations and some internet banking statements, which have already been alluded to above, and assertions by Mrs Frigger.

91    After making relevant findings as to who was a trustee of the FSF and when, the primary judge went on to consider the more important threshold issue of whether the FSF was a regulated superannuation fund within the meaning of the SIS Act. Ultimately, it was held that the FSF was a regulated superannuation fund at all material times, and that it could only cease to be in the event of fundamental defects in its constitution such that it no longer complied with the requirements of s 19 of the SIS Act: Liability Judgment at [198]–[209], [654].

92    The next critical issue for consideration was whether the disputed assets were part of the FSF, as a regulated superannuation fund, such as to exempt the appellants under the Bankruptcy Act s 116(2)(d)(iii)(A).

93    However, as a preliminary issue, and despite the appellants seeking no declaration that the BW1 account was an asset of the FSF, the primary judge noted that the ultimate issue turned upon whether BW1 was an asset of the FSF: Liability Judgment at [211]. This was because the appellants claimed it to be the main operating account of the FSF and that the securities in the Main Portfolio were purchased using funds in BW1. Further, the first respondent accepted that the funds in BOQ1 could be traced back to BW1.

94    As was highlighted previously, evidentiary uncertainties proved to be a significant barrier, including with respect to BW1. In the primary judge’s own words, the evidence was “simply a mess … [and] a morass in which no sure footing can be found”: Liability Judgment at [220]. For example, a balance sheet for the FSF as at 30 June 2019, signed by the appellants and dated 19 June 2020, was likely to be self-serving given that it was prepared by Mrs Frigger after the commencement of the litigation: Liability Judgment at [226]. The unqualified audit report of the 2019 balance sheet also gave the Court little comfort as to the balance sheet’s correctness: Liability Judgment at [229]. Similar findings were made with respect to other balance sheets (see, e.g., Liability Judgment at [232]–[241]). Not a single balance sheet in evidence was found to have been reliably dated as having been produced before the sequestration date, as such the primary judge found that the balance sheets were not reliable evidence: Liability Judgment at [243]. Similar concerns over the reliability of the annual returns produced were also expressed (Liability Judgment at [244]–[251]), as these returns were either likely produced after the sequestration date or had large variations in figures or inconsistencies between versions. The appellants also produced documents concerning the registration of BW1 on the PPSR: Liability Judgment at [277]. However, explanations concerning a number of issues with the registration document were unsatisfactory (Liability Judgment at [278]–[280]) or the document itself was adverse to the appellants’ case: Liability Judgment at [281]. The registration was held simply not to convey the necessary manifestation of intention that BW1 was to be held by the appellants subject to the trusts established by the FSF Trust Deed.

95    At least with respect to the receipt of funds in relation to the Edward Street property, the Residential Properties and the Hobart property, the primary judge held that the appellants had made out part of their case, but evidence from the Armadale property was highly tenuous: Liability Judgment at [294]. The transactional history of the account led the primary judge to ultimately conclude that BW1 was used as an account for the receipt of income, tax refunds and payment of expenses and other outgoings of the FSF, but as well as for other receipts and payments not connected to the FSF: Liability Judgment at [302]. The appellants’ tracing exercise were found to be entirely opaque and unreliable, among other reasons: Liability Judgment at [308]–[325].

96    Ultimately, the totality of the above led the primary judge to conclude that the BW1 account should not be characterised as an asset of the FSF: Liability Judgment at [329]. As the evidence appeared to suggest that the BW1 funds were used for mixed FSF and non-FSF purposes, the most that could be concluded was that it contained FSF funds. The primary judge concluded that it was impossible to ascertain what proportion of the funds could be attributed to the FSF, and could therefore be recoverable by the trustee on the state of the evidence: Liability Judgment at [330].

97    The primary judge then considered, in turn, the particular issues that arose with respect to each of the disputed assets.

Disputed assets – BOQ1 and BOQ2

98    With respect to the BOQ1 and BOQ2 accounts, the primary judge proceeded on the basis that the ultimate issue to be considered was whether there was an objective manifestation of intention to declare the assets to be trust assets within the FSF, having the result that the appellants hold beneficial interests in the accounts as part of their interests in the FSF as a regulated superannuation fund: Liability Judgment at [31]. This was despite the appellants pleading their case on a narrower basis, namely that the money in those accounts was originally earned by the FSF as rental income from two properties in Perth and Hobart: Liability Judgment at [29].

99    Beginning with BOQ1, the appellants relied on tracing principles and general evidence about their subjective intention to shift funds between accounts in order to establish that the BOQ1 funds were FSF funds: Liability Judgment at [340]–[341]. Although the first respondent accepted that all the funds in BOQ1 could be traced from BW1, given the conclusions the primary judge made regarding the nature of the BW1 funds, the primary judge did not consider that that acceptance by the first respondent led to any inference that all funds coming from BW1 were FSF funds when paid out: Liability Judgment at [340]. The primary judge found that merely pointing to surrounding circumstances which are arguably consistent with a trust on the terms of the FSF existing over BOQ1 was not enough and nothing about the purported investment strategy described by the appellants necessitated that it was carried on by them in their capacity as trustees of the FSF: Liability Judgment at [342]. The evidence was such that the primary judge held that the appellants had not discharged their onus of establishing that on 2 July 2018, when BOQ1 was opened by Mr Frigger in his name, that it was an asset of Mr Frigger held in his capacity as trustee of the FSF: Liability Judgment at [347].

100    Also in evidence was an email dated 13 July 2018 sent from Mr Frigger to the Bank of Queensland which included the account number for BOQ1 and allegedly advised the Bank of the FSF TFN. As the primary judge noted, it was not entirely clear what exactly the appellants’ submission was in relation to this notification. Given that the email was not sent at the same time as when BOQ1 was opened and the initial amount had been deposited (2 July 2018), and that it was sent just prior to the sequestration order being made, the email was to be treated with caution and was likely self-serving: Liability Judgment at [352]–[353]. The primary judge proceeded on the basis that the appellants’ contention was that Mr Frigger was manifesting an intention that BOQ1 become an asset of the FSF by notifying the Bank of Queensland that the TFN for the FSF was the TFN for BOQ1: Liability Judgment at [354], [356]. However, uncertainties as to what Mr Frigger objectively intended to convey in sending the email, given the lack of clarity as to its contents, led the primary judge to conclude that the email did not convey a sufficient degree of clarity as to convey the alleged objective intention: Liability Judgment at [367]–[368].

101    Ultimately, it was found that the appellants had failed to establish that either BOQ1 or BOQ2 were held on the trusts of the FSF Deed or Fund or had otherwise been contributed to the FSF at or before the date of bankruptcy or any time before then (such as the commencement of the bankruptcy): Liability Judgment at [370].

Disputed asset – Main Portfolio

102    With respect to the Main Portfolio, the primary judge noted, and the appellants accepted, that in order to determine whether they were prevented, as trustees of the FSF, from trading shares listed on ASX because of the sequestration order they would need to establish that the securities were assets of the FSF: Liability Judgment at [34].