FEDERAL COURT OF AUSTRALIA

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

Appeal from:

Frigger v Trenfield (No 10) [2021] FCA 1500

File number:

WAD 278 of 2021

Judgment of:

ALLSOP CJ, ANDERSON AND FEUTRILL JJ

Date of judgment:

24 March 2023

Catchwords:

APPEAL AND NEW TRIAL appeal – appeal by way of rehearing – errors of fact – advantage of primary judge – principles of appellate review.

BANKRUPTCY AND INSOLVENCY – appeal from the decision of the primary judge in Frigger v Trenfield (No 10) [2021] FCA 1500 (primary judgment) – where the appellants made numerous challenges to the findings of the primary judge with respect to certain disputed assets – whether these disputed assets were contributed to the appellants’ self-managed superannuation fund, named the Frigger Superannuation Fund (FSF) such that they were trust property whether the primary judge erred in finding that certain assets vested in the trustee in bankruptcy pursuant to s 58 of the Bankruptcy Act 1966 (Cth) (Bankruptcy Act) and were therefore divisible amongst the appellants’ creditors – whether the primary judge erred in finding that the appellants’ Bankwest Account No. 1 (BW1) was not a trust asset of the FSF – whether the primary judge erred in finding that the Bank of Queensland Account No. 1 (BOQ1) and Bank of Queensland Account No. 2 (BOQ2) vested in the first respondent in circumstances where the first respondent failed to identify which funds were deposited into BOQ1 and BOQ2 were funds that belonged to the appellants personally – whether primary judge erred in finding that the shares held by Commonwealth Securities Limited (CommSec) Share Trading Account Portfolio (Main Portfolio) in its custodial service vested in the first respondent – whether the primary judge erred by finding that the first respondent’s conduct in consenting to a payout of security of costs in the Supreme Court of Western Australia did not breach s 82 of the Bankruptcy Act – whether the primary judge erred by refusing to determine the appellants’ claims for losses caused by freezing the BOQ1 account and the Main Portfolio account which required the court to finally determine all controversies between the parties – where no error is detected in the primary judge’s reasoning.

PRACTICE AND PROCEDURE – whether the primary judge failed to provide the appellants with procedural fairness – where the appellants claim that they were denied the right to know and to be given an opportunity to respond to the case presented against them – ground of appeal rejected in its entirety.

SUPERANNUATION relationship between superannuation and trust law – compliance with legislative and regulatory requirements – adequacy of documentation – finding of lack of merit in appeal grounds.

TRUSTS AND TRUSTEES – whether the primary judge erred in finding that assets vested in the trustee in bankruptcy, in circumstances where the validity of the sequestration orders was being challenged in matter WAD 66 of 2021 – where the appellants claimed that the bankruptcy notices were invalid and that sequestration orders were a nullity – whether the primary judge erred in finding that the appellants had not established that BW1, BOQ1, BOQ2, the CommSec share portfolio and the two residential properties were assets of the FSF – whether the primary judge erred in refusing to grant relief in relation to the trustee’s consent to payments out of court – whether the primary judge erred by failing to remove the first respondent as trustee in bankruptcy – whether the primary judge erred in refusing to determine the claims for losses caused by freezing of BOQ1 and the CommSec share portfolio where no error is found in the primary judge’s reasoningheld: appeal dismissed.

Legislation:

Bankruptcy Act 1966 (Cth) ss 19(1)(k), 30, 30(1)(b), 34A, 58, 58(1)(a), 58(3), 58(5), 77A, 82, 120, 121, 125, 129, 116(2)(a), 116(2)(d)(iii)(A), sch 2 s 90-15(3)(a)

Corporations Act 2001 (Cth) ss 173(1), 173(3A)

Corporations Regulations 2001 (Cth) reg 2C.1.03(c)

Evidence Act 1995 (Cth) ss 46, 59, 60–64, 66A–75, 69, 69(3), 81–84, 87, 135, 136, 138, 140

Federal Court of Australia Act 1976 (Cth) ss 21, 22, 24(1E), 27, 37M

Federal Court Rules 2011 (Cth) rr 1.34, 30.28, 36.57

Income Tax Assessment Act 1997 (Cth) ss 294-30, 295-85, 295-380, 295-385, 295-385(3), 295-385(3)(a), 295-385(4)(a), divs 291, 292, 294

Income Tax Assessment Regulations 1997 (Cth) reg 295-385.01(a)(i)

Insolvency Practice Rules (Bankruptcy) 2016 (Cth) r 42-30(c)

Rules of the Supreme Court 1971 (WA) ord 25 rr 1, 7

Superannuation (Excess Non-concessional Contributions Tax) Act 2007 (Cth)

Superannuation (Excess Transfer Balance Tax) Imposition Act 2016 (Cth) s 294-30

Superannuation Industry (Superannuation) Regulation1994 (Cth) regs 1.06, 6.01(2), 7.04(4), sch 7

Superannuation Industry (Supervision) Act 1993 (Cth) ss 3, 10, 17A, 19, 35AE, 35B, 35C, 65, 66(1), 103, 103(1), 104, 104A, 105, 253, 289, 289(2)

Superannuation Industry (Supervision) Consequential AmendmentAct 1993 (Cth)

Casecited:

Agricultural & Rural Finance Pty Ltd v Gardiner (2008) 238 CLR 570

Aldi Foods Pty Ltd v Moroccanoil Israel Ltd (2018) 261 FCR 301

Allen v Roughley (1955) 94 CLR 98

Allesch v Maunz (2000) 203 CLR 172

Associated Alloys Pty Limited v ACN 001 452 106 Pty Limited (in liquidation) (2000) 202 CLR 588

Astbury v Astbury [1898] 2 Ch 111

Atwill v Commissioner of Stamp Dutie(NSW) (1970) 72 SR (NSW) 415

Aussiegolfa Pty Ltd (Trustee) v Commissioner of Taxation (2018) 264 FCR 587

Australian Securities and Investments Commission v Big Star Energy Ltd (No 3) (2020) 389 ALR 17

Bahr v Nicolay [No 2] (1988) 164 CLR 604

Benjamin v GB Franchising Australia Pty Ltd [2011] ACTCA 26

Blanch v British American Tobacco Australia ServiceLtd (2005) 62 NSWLR 653

Bosanac v Commissioner of Taxation [2022] HCA 34

Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd (2001) 117 FCR 424

Byrnes v Kendle (2011) 243 CLR 253

Cashman v Kinnear [1973] 2 NSWLR 495

Caswell v Powell Duffryn Associated Collierie[1940] AC 152

CDJ v VAJ (1998) 197 CLR 172

CKT20 v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2022] FCAFC

Coal and Allied Operations Pty Limited v Australian Industrial Relations Commission (2000) 203 CLR 194

Cock v Smith (1909) 9 CLR 773

Computer Accounting and Tax Pty Ltd v Professional Serviceof Australia Pty Ltd [2008] WASC 133

Coshott v Prentice (2014) 221 FCR 450

Coulton v Holcombe (1986) 162 CLR 1

Cowan v Scargill [1895] Ch 270

Dovuro Pty Ltd v Wilkin(2003) 215 CLR 317

Duncan (as trustee for the bankrupt Estate of Garret) v National Australia Bank Ltd (2006) 95 SASR 208

Duralla Pty Ltd v Plant (1984) 2 FCR 342

Dwight v Federal Commissioner of Taxation (1992) 37 FCR 178

Eslea Holdings Ltd v Butts (1986) 6 NSWLR 175

Evanv European Bank Ltd (2004) 61 NSWLR 75

Film Bars Pty Ltd v Pacific Film Laboratories Pty Ltd (1979) 1 BPR 9251

Finch v Telstra (2010) 242 CLR 254

Foskett v McKeown [2001] 1 AC 102

Fox v Percy (2003) 214 CLR 118

Frigger v Trenfield [2019] FCA 1746

Frigger v Trenfield (No 2) [2019] FCA 2009

Frigger v Trenfield (No 3) [2020] FCA 150

Frigger v Trenfield (No 4) [2020] FCA 797

Frigger v Trenfield (No 5) [2020] FCA 827

Frigger v Trenfield (No 6) [2020] FCA 934

Frigger v Trenfield (No 7) [2020] FCA 1740

Frigger v Trenfield (No 9) [2021] FCA 652

Frigger v Trenfield (No 10) [2021] FCA 1500

Frigger v Trenfield (No 11) [2022] FCA 326

Frigger v Trenfield (No 12) [2022] FCA 900

Frigger v Trenfield (No 13) [2022] FCA 906

Frigger v Trenfield (Application for Stay Pending Appeal) [2021] FCA 1605

Goldus Pty Ltd (Subject to a Deed of Company Arrangement) v Cummins (No 4) [2021] FCA 1095

Hawkinv PowellTillery Steam Coal Co Ltd [1911] 1 KB 988

Heperu Pty Ltd v Belle (2009) 76 NSWLR 230

Herdegen v Federal Commissioner of Taxation (1988) 84 ALR 271

Holloway v McFeeters (1956) 94 CLR 470

Hung v Warner, in the matter of Bellpac Pty Ltd (Receiverand ManagerAppointed) (In Liquidation) [2013] FCAFC 48

In the Estate of William Just (deceased) (No 1) (1973) 7 SASR

In the matter of Tresdar Pty Ltd [2019] NSWSC 179

Jackson v Sterling Industries Ltd (1986) 12 FCR 267

Johnston v BrightstarHolding Company Pty Ltd [2014] NSWCA 150

Jonev Sutherland Shire Council [1979] 2 NSWLR 206 Kauter v Hilton (1953) 90 CLR 86

Kennon v Spry (2008) 238 CLR 366

Korda v Australian Executor Trustees (SA) Ltd (2015) 255 CLR 62

Lee v Lee (2019) 266 CLR 129

Lee v Sankey (1872) LR 15 Eq 204

Legal Practice Board v Computer Accounting and Tax Pty Ltd [2007] WASC 184

Legal ServiceBoard v Gillespie-Jone(2013) 249 CLR 493

Lewis v Nobbs (1878) 8 Ch D 591

Liwszyc v Commissioner of Taxation (2014) 218 FCR 334

Lock v Westpac Banking Corporation (1991) 25 NSWLR 593

Luke v South Kensington Hotel Co (1879) LR 11 Ch D 121

Markopoulov Marco [2020] WASC 79

McLennan v Taylor (1967) 85 WN (PT1) (NSW) 525

Meeseena v Carr (1870) LR 9 Eq 260

Metwally v University of Wollongong (1985) 60 ALR 68

Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104

New South Wales v Kable (2013) 252 CLR 118

O’Brien v Komesaroff (1982) 150 CLR 310

Parbery v QNI Metals Pty Ltd [2020] QSC 143

Pelham v Pelham & Braybrook [1955] SASR 53

Pilmer v HIH Casualty & General Insurance Ltd (No 2) (2004) 90 SASR 465

Professional Serviceof Australia Pty Ltd v Computer Accounting and Tax Pty Ltd [2010] WASC 38

Professional Serviceof Australia Pty Ltd v Computer Accounting and Tax Pty Ltd (No 2) [2010] WASC 113

Professional Serviceof Australia Pty Ltd (administrator appointed) v Computer Accounting and Tax Pty Ltd (No 3) [2010] WASC 93

PT Garuda Indonesia Ltd v Grellman (1992) 35 FCR 515

Re Armstrong (1960) VR 202

Re Australian Elizabethan Theatre Trust; Lord v Commonwealth Bank of Australia (1991) 30 FCR 491

Re Billington [1949] St R 102

Re Courtenay House Capital Trading Group Pty Ltd (in liq) [2018] NSWSC 404

Re Kayford Ltd (in Liq) [1975] 1 All ER 604

Robinson Helicopter Inc v McDermott (2016) 331 ALR 550

Rosenbaum v Baidarman (No 2) [2021] NSWSC 574

State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (in liq) (1999) 160 ALR 588

Technomin Australia Pty Ltd v Xstrata Nickel Australasia OperationPty Ltd (No 4) [2014] WASC 405

Toksoz v Westpac Banking Corporation (2012) 289 ALR 577

Trident General Insurance Co Ltd v McNiece Bros Pty Ltd (1988) 165 CLR 107

Trustee of the Property of Cummin(a bankrupt) v Cummin(2006) 227 CLR 278

Trusteeof the Kean Memorial Trust Fund v Attorney-General (SA) (2003) 86 SASR 449

Twinsectra Ltd v Yardley [2002] 2 AC 164

Van Rassel v Kroon (1953) 87 CLR 298

Vitali v Stachnik [2001] NSWSC 303

Warren v Coombes (1979) 142 CLR 531

Wilkinson v Clerical Administrative and Related EmployeeSuperannuation Pty Ltd (1998) 152 ALR 332

Young v Murphy [1996] 1 VR 279

Division:

General Division

Registry:

Western Australia

National Practice Area:

Commercial and Corporations

Sub-area:

General and Personal Insolvency

Number of paragraphs:

637

Date of last submissions:

29 August 2022 (Appellants)

6 September 2022 (Respondent)

Date of hearing:

10–12 May 2022, 22–24 August 2022

Counsel for the Appellants:

The Appellantappeared in person

Counsel for the Respondent:

D Majteleand T J Langdon

Solicitor for the Respondent:

CarleSolicitors

ORDERS

WAD 278 of 2021

BETWEEN:

ANGELA CECILIA THERESA FRIGGER

First Appellant

HARTMUT HUBERT JOSEF FRIGGER

Second Appellant

AND:

KELLY-ANNE LAVINA TRENFIELD

Respondent

order made by:

ALLSOP CJ, ANDERSON AND FEUTRILL JJ

DATE OF ORDER:

24 March 2023

THE COURT ORDERTHAT:

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 orderidealt with in Rule 39.32 of the Federal Court Rule2011.

REASONFOR JUDGMENT

THE COURT:

Introduction

[1]

Appellants’ background

[4]

Procedural history

[9]

First instance

[9]

The appellants’ submissions at first instance

[13]

Classes of documents in support of the appellants’ claims

[21]

Discovery orders

[25]

Judgments

[34]

Interlocutory judgments

[35]

Liability judgment

[78]

Costs judgments

[80]

The witnesses

[83]

Conclusionato evidence

[90]

Disputed asset– BOQ1 and BOQ2

[98]

Disputed asset – Main Portfolio

[102]

Disputed asset – Residential Properties

[105]

Issueconcerning Court of Appeal orders

[116]

Issueconcerning the removal of trustee in bankruptcy

[119]

The appeal

[130]

The principleof appellate review

[133]

The order in which we deal with the groundof appeal

[148]

Application to receive further evidence in the appeal

[149]

Ground 9: alleged failure to provide procedural fairness

[172]

Groundof appeal 2 to 5: the disputed assets

[204]

Relevant aspectof the superannuation system, including the SIAct

[205]

Regulated superannuation fundand self-managed superannuation funds

[211]

Superannuation law and the concept of “vesting” relied upon by the appellants

[215]

Phaseand typeof superannuation benefits

[221]

Caps on contributions

[227]

The transfer balance cap

[229]

Conclusions regarding the appellants’ submissions on “vesting”

[232]

The relationship between superannuation law and trust law

[241]

When will an asset be treated a“contributed” to a regulated superannuation fund?

[246]

Intention to contribute an asset

[247]

Nature of the asset sought to be contributed

[258]

Effecting the contribution of property to a superannuation fund

[260]

Background to and issuein the ‘dispute’

[268]

Onuof proof

[305]

Errorof fact involving credit

[316]

Errorof fact involving inference

[329]

The primary judge’approach to intention to create trusts

[335]

Record keeping obligationof SMSF trustees

[345]

Dutieand powerof SMSF trustees

[349]

Tracing

[366]

Evidence of FSF financial records

[377]

Documentcontaining hearsay

[387]

The documentupon which the appellantrely

[395]

Audit reportand balance sheets

[396]

Taxation returns

[423]

2016 tax return

[437]

PPSR Registrations

[464]

Tax File Number notifications

[467]

BW1 account reconciliation

[476]

Declaration of trust

[496]

Asset valuations

[499]

Account ‘nicknames’

[502]

Ground 2: BW1

[505]

Ground3 and 4: BOQ1 and BOQ2 and the Main Portfolio

[523]

Overview

[523]

Audit reports, balance sheetand tax returns

[538]

Other financial records

[545]

TFN notifications

[548]

PPSR Registrations

[556]

Account nicknames

[557]

Respondent’failure to adduce evidence

[558]

Other matters

[560]

Compliance with superannuation and taxation legislation

[565]

Ground 5: the Residential Properties

[568]

Overview

[568]

Contextual evidence

[574]

Proper construction of declarationof trust

[578]

Ground 1: the statuof the bankruptcy

[590]

Ground 6: the payout of the security for costfunds

[598]

Ground 7: the removal of the trustee in bankruptcy

[622]

Ground 8: the refusal to assesthe losof opportunity to trade

[630]

Orders

[637]

SCHEDULE 1

[]

Introduction

1    The appellant(MrAngela Cecilia Theresa Frigger and Mr Hartmut Hubert Josef Frigger) (hereafter, appellantor Mrand 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, declarationthat certain bank accountand residential propertiewere and are held in the Frigger Superannuation Fund (FSF) on trust for beneficiarieof the FSF and that pursuant to 116(2)(d)(iii)(A) of the Bankruptcy Act 1966 (Cth) (Bankruptcy Act) are not assetdivisible amongst Mr and MrFrigger’s creditors as undischarged bankrupts.

2    The appellants, by their re-amended notice of appeal dated 15 June 2022, raise nine groundof appeal. Those groundmay be briefly summarised afollows:

(1)    Ground 1 – Statuof Bankruptcy – The primary judge erred in deciding that certain assetvested in the respondent pursuant to 58 of the Bankruptcy Act, in circumstancewhere the primary judge waon notice that, in proceeding WAD 66 of 2021, the appellantclaimed the bankruptcy noticewere invalid and that sequestration orderwere a nullity.

(2)    Ground 2 – Bankwest Account No. 1 – The primary judge erred in finding that the Bankwest Account No. 1 (BW1) wanot 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 circumstancewhere the respondent failed to identify which funddeposited into BOQ1 and BOQ2 were fundthat belonged to the appellantpersonally.

(4)    Ground 4 – Main Portfolio – The primary judge erred in finding that the shareheld by Commonwealth SecuritieLimited (CommSec) Share Trading Account Portfolio No. 270815 (Main Portfolio) in itcustodial service vested in the respondent.

(5)    Ground 5 – Residential Propertie– The primary judge erred by deciding that the respondent had an absolute caveatable interest in real propertie(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 contributionof those propertieby MrFrigger to the FSF on 1 July 2014 constituted contraventionof 66 of the Superannuation Industry (Supervision) Act 1993 (Cth) (SIAct).

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

(7)    Ground 7 – Respondent’removal aTrustee in Bankruptcy – The primary judge erred in finding that the respondent’conduct had not caused the appellants, whether personally or aFrigger Superannuation Fund members, losseoccasioned by the lost opportunity to earn dividendand capital gainon share trading on the Main Portfolio and on the BOQ1 fund aa consequence of the Respondent freezing assetof more than $7.5 million.

(8)    Ground 8 – Refusal to asseslosof opportunity to trade claim – The primary judge erred when he refused to determine the appellants’ claimfor lossecaused by freezing the BOQ1 account and the Main Portfolio account which required the court to completely and finally determine all controversiebetween the parties.

(9)    Ground 9 – Failure to provide procedural fairnes– The primary judge failed to provide the appellantwith procedural fairnesin case management ordermade on 29 November 2019 and during the trial, by denying the appellantthe 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 irelevant to understanding the case which waput by the appellanton appeal. For thireason, we now set out the background of the appellants, the procedural history and relevant chronology which providethe framework for the determination of the groundof appeal.

Appellants’ background

4    The appellantare husband and wife. The appellantare intelligent people and have each held professional rolethroughout their working life.

5    MrFrigger, i71 yearold and inow retired. Before her retirement she worked aan accountant. MrFrigger holda Bachelor of Accounting from the Western Australian Institute of Technology (now Curtin University). After graduating, MrFrigger went on to qualify aa Certified Practising Accountant and a Registered Tax Agent. MrFrigger ialso a Fellow of the National Tax and AccountantAssociation. MrFrigger managed all accounting recordfor the FSF and prepared the FSF’financial statementthroughout the years.

6    Mr Frigger i69 yearold. He too iretired. During hiworking years, Mr Frigger wagainfully employed aa procesand commissioning engineer. Mr Frigger also acted aa consultant to companiein thicapacity. At one point in time, Mr Frigger also managed the family accounting and investment business, and used hiown experience in investmentin property, shares, managed fundand bondto help otherstart a self-managed investment portfolio (see detailsurrounding the background of the appellantin: Computer Accounting and Tax Pty Ltd v Professional Serviceof Australia Pty Ltd [2008] WASC 133 and Legal Practice Board v Computer Accounting and Tax Pty Ltd [2007] WASC 184).

7    It iclear that through investment, entrepreneurship or other means, Mrand Mr Frigger had accumulated substantial assetby the time they were declared bankrupt.

8    Mrand 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 notionsuch athe onuof proof resting on the party seeking to establish groundfor relief. Our observationof them in the varioudayof the appeal confirm this.

Procedural history

First instance

9    Thiappeal arisefrom an application brought by the first appellant, MrFrigger, against MrTrenfield seeking relief with respect to BOQ1 and BOQ2, the shareheld in the Main Portfolio and the Residential Propertie(collectively, the disputed assets), consent orderand costassessmentin the Court of Appeal of Western Australia, and the first respondent’conduct of the administration of the bankrupt estate.

10    The first appellant filed an originating application on 12 March 2019 aagainst MrTrenfield. By orderdated 14 June 2019 and 31 July 2019, the second appellant, Mr Frigger, wajoined athe second applicant and Paul Allen wajoined athe second respondent. Mr Allen wasubsequently removed athe second respondent by order dated 19 March 2020. For the reasongiven in Frigger v Trenfield (No 6) [2020] FCA 934 (Frigger (No 6)), H & A Frigger Pty Ltd (or HAF) athe former trustee of FSF wajoined asecond respondent. Neither Mr Allen nor HAF ia party to these proceedings.

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

(a)    declarationthat BOQ1, BOQ2 and the Residential Propertieare held in the FSF on trust for the beneficiarieof that fund, and so pursuant to 116(2)(d)(iii)(A) of the Bankruptcy Act are not assetdivisible among creditors;

(b)    compensation for lossethe applicantsay they have incurred aa result of the first respondent having placed holdor freezeon BOQ1;

(c)    an order requiring the first respondent to remove caveatshe haplaced on the Residential Propertieand to pay any lossecaused by the caveats;

(d)    declarations that the variouconsent orderand costassessmentin the Court of Appeal are ‘incompetent’ pursuant to 58(3)(b) of the Bankruptcy Act;

(e)    compensation for losseresulting from the Court of Appeal costorderand ordereffectively requiring the first respondent to apply to that court to have the orderset aside;

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

(g)    orderrequiring the first respondent to write to CommSec and the ASX to remove a trading suspension on the Main Portfolio which appearto have been placed following a previouletter from the first respondent to CommSec, and requiring her to say that the securitiein that account have not vested in her pursuant to 58 of the Bankruptcy Act;

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

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

(j)    costs.

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

The appellants’ submissionat first instance

13    By orderof the primary judge on each of 14 June 2019, 20 September 2019, 14 January 2020 and 1 July 2020, the appellantwere granted leave to amend the originating application. The effect of these amendmentwato join the second appellant aa party to those proceedingand to amend the relief sought by the appellantamong other amendmentdiscussed further below.

14    Anoted by the primary judge, distilling the contentionon which the appellantsought the above relief waa complicated task. The appellantmade wide-ranging contentionwhich came in the form of numerouaffidavitand submissions. The difficulty in distilling the appellants’ contentionwafurther compounded by what the primary judge described a“the changing nature of the position[the appellants] took in the case over time” (Liability Judgment at [10]). It inot necessary nor possible to canvasall the appellants’ submissionmade at trial. However, for the purposeof thiappeal, we will synthesise the submissionarticulated by the appellantthat the primary judge considered to be sufficiently cogent to warrant an expresmention.

15    First, ato BOQ1 and BOQ2, the appellantsubmitted that the money in those accountwaoriginally earned by the FSF arental 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 ileased to Officeworks. To establish that the BOQ1 and BOQ2 fundare FSF assets, the appellants’ relied upon several indicia. These included that the Hobart property wapurchased in their nameatrusteeof the FSF, that there waa declaration of trust over the Edward Street property and that a registrar’caveat waregistered on the title. Invoiceto the tenantof these propertiewere said to have been issued by the appellantatrusteeof the FSF, with the tenantbeing directed to pay rent and outgoingto the BW1 account.

16    Secondly, ato the Main Portfolio, the appellantsubmitted that, although the trading account waopened at a time when Mr and MrFrigger were not trusteeof the FSF, the surrounding circumstanceindicated that the sharethen held in the Main Portfolio were purchased in their capacity atrusteeof the FSF.

17    Thirdly, ato the Residential Properties, the appellantsubmitted that those propertiewere FSF assets. Although each certificate of title of the propertielistMrFrigger athe registered owner, the appellantrely upon declarationof trust over the propertiemade on 1 July 2014 by MrFrigger (2014 Declarations) in support of their contention. More specifically, they contend that the propertiewere contributed to the FSF by MrFrigger ain specie transfer by way of these declarations. Aa result, the appellantsubmitted that the first respondent doenot have a caveatable interest in the Residential Properties.

18    Fourthly, ato the Court of Appeal orders, the primary judge noted that the basifor the appellants’ claimwadifficult to establish from their written submission(Liability Judgment at [43]). Nonetheless, the appellants’ oral opening distilled two complaints. The first complaint wathat the costliabilitiewere debtprovable in the bankruptcy, and, rather than calling for proofand adjudicating on them, the first respondent signed consent orderwhich led to the payment out of the amountthat had been paid in asecurity for costs. The second complaint wathat MrTrenfield should not have consented to that payment athe cost liabilitiewere more than offset by the substantial counterclaimthe appellanthad against Mr Mervyn Kitay and Clavey Legal.

19    Although the appellantsought declarationthat the Court of Appeal orderwere “incompetent”, the appellantin oral submissionmade clear that they were not seeking for thicourt to somehow reverse or override the order.

20    Lastly, ato the first respondent’conduct of the administration of the bankrupt estates, the appellantmade a number of allegationin support for the declaration they sought that MrTrenfield be removed atrustee in bankruptcy. These were listed in schedule 4 to their written submissiondated 29 June 2020 and summarised by the primary judge in the Liability Judgment at [46]–[48].

Classeof documentin support of the appellants’ claims

21    In support of their submissions, the appellantrelied upon numerouclasseof documentthat they put before the primary judge. Thiincluded financial statements, annual returns, audit reports, Personal Property Security Register (PPSR) registrations, tax file number (TFN) notifications, holder identification statements, bank statementand reconciliationamong other things.

22    However, anoted by the primary judge, the orderthe appellantsought were “on the basiof evidence with many gaps; gapthat they seek to croswith leapof broad assertion”: Frigger v Trenfield [2019] FCA 1746 at [67] (Frigger (No 1)).

23    Indeed, one major issue that arose at trial wawhether the financial statementand annual returnrelied upon were reliable. The real possibility that such documentwere prepared after the sequestration orders, and so were unreliable, waa real issue.

24    Ahighlighted by the respondent, the appellanthad not put before the primary judge documentevidencing their personal tax returnthey asserted were relevant, financial statements, annual returnand audit reportprior to 2015, and CommSec statementprior to 2016, among other things. In other words, in the masof material placed before the Court at first instance, and on appeal (including in additional tenderon the appeal) no coherent, reliable body or framework of documentwaplaced before the Court from which any reliable inferencecould be drawn (in particular without MrFriggerevidence ato context) ato what assetand what activity were those of Mr and MrFrigger on their personal account and of the FSF. A starting point for such a coherent analysicould have been the kindof documentreferred to in the first sentence of thiparagraph.

Discovery orders

25    With respect to Frigger v Trenfield (No 2) [2019] FCA 2009 (Frigger (No 2)), the respondentbrought an interlocutory application seeking specific discovery of documentsaid to be relevant to the source of the fundin BOQ1 and BOQ2, and the capacity in which the Residential Propertieand securitiein the Main Portfolio are owned. By way of context, the appellantalso brought an interlocutory application for summary judgment in respect of the declarationthat BOQ1 and BOQ2 are FSF assets.

26    MrTrenfield’submissionin support of her application for discovery were relevantly put in four sworn affidavits. Acrosthe four affidavits, MrTrenfield made varioustatementof purpose ato why she waseeking discovery. In essence, MrTrenfield said that she did not know the true nature of the beneficial ownership of the disputed assetbased on the available evidence in order to firmly respond to the appellants’ contentions, and that a full and proper investigation irequired. MrTrenfield provided detailof the investigationshe had conducted in performing her dutieathe trustee in bankruptcy.

27    Ultimately, the primary judge found that the respondentwere not pursuing discovery for any purpose collateral to the just resolution of the issuein the proceedings, and thudid not amount to an abuse of process.

28    Similarly, in Frigger v Trenfield (No 6) [2020] FCA 934 (Frigger (No 6)), MrTrenfield also brought an interlocutory application for discovery of certain miscellaneoudocumentpertaining to (i) an alleged additional CommSec portfolio, (ii) noticefrom a share registry (Computershare), and (iii) certain bank statements. She submitted that these documentwere relevant to the issueof the beneficial ownership of the sharein the Main Portfolio, the appellants’ claim for losseregarding the freezing of the Main Portfolio, whether MrTrenfield made any claim to hold a power of attorney on some 40 shareholdingheld in the Main Portfolio, and the source of trust fundtraceable into other accounts.

29    Relevantly, the discovery ordermade with respect to the St George and Citibank bank statementdirectly relate to the discovery ordermade in Frigger (No 2). With respect to the St George statement, the primary judge clarified that it wadiscoverable under the previouorder(Frigger (No 6) at [64]). Similarly, the primary judge explained in hireasonwhy the appellants’ assertion that further pageof a relevant Citibank statement were not included in the previoudiscovery order waincorrect (Frigger (No 6) at [65]). The specific discovery orderwere made for the purpose of addressing “any doubt”, noting that the Citibank account “fallwithin that order”.

30    Consequentially, two setof discovery orderwere made each on 29 November 2019 (Frigger (No 2)) and 25 June 2020 (Frigger (No 6)).

31    The 29 November 2019 orderrequired the appellantto provide the following classeof documents:

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

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

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

32    The 25 June 2020 orderfurther required the appellantto provide the following additional classeof documents:

(a)    All documentthat evidence the holding, purchase, sale, transfer, subscription or other conveyance of, and the identity of the legal and beneficial owner of, the securitieidentified in the Commonwealth SecuritieLtd portfolio that ireferred to in the affidavit of Angela Frigger sworn 16 September 2019 at annexure AF6, page 14 …

(b)    All bank statementfor the St George bank account identified in the affidavit of Kelly-Anne Trenfield sworn 1 June 2020 at annexure KAT-9, page42 to 43, whether in the name of Jessica Frigger or any other person (excluding page1 and 2 of the statement of account for the period 26 February 2017 to 7 July 2017).

(c)    All bank statementfor 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 orderwith respect to a second category of documentrelating to the Computershare notices.

Judgments

34    Over the course of the matter, the primary judge delivered 13 judgments. It iconvenient to addresthese in short compass, in turn, below.

Interlocutory judgments

35    Frigger (No 1), concerned the appellants’ interlocutory application seeking to compel MrTrenfield to retract a letter that she sent to CommSec on 28 August 2019. The appellantalso sought orderrequiring MrTrenfield to send a letter to ASX Settlement Pty Ltd with the effect of changing the holder statuof the Clearing House Electronic Sub-register System holder identification number associated with the CommSec portfolio so that sharecan be traded on the Australian SecuritieExchange, and that MrTrenfield make good any losto the fund. Each of these proposed orderwarefused.

36    The primary judge made a number of observationwith 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 MrFrigger needed to:

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

(2)    to establish that, at the commencement of their bankruptcy on 20 July 2018, the sharein 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    Thiwaparticularly pertinent in circumstancewhere one would expect that more specific evidence of the requisite intention would be easy to adduce (Frigger (No 1) at [45]).

38    Awill be discussed in due course (see [247]–[257] below) the importance of objectively manifested intention ithe need to prove actundertaken that are sufficient to permit the conclusion that assetwere or became part of a trust fund (the FSF). The actto be proven, are actor factin the world that are done or exist that carry with them the inference that the appellants’ intention which waeffected by the actwato have the assetform 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 waat a “high level of generality” (Frigger (No 1) at [44]) and “at best equivocal” (Frigger (No 1) at [45]) or wa“little more than a broad assertion” (Frigger (No 1) at [44]). Similar commentin relation to the evidence were repeated in later published reasons, which will be discussed below. No direct evidence waadduced of any share registry having noted the beneficial ownership of sharein their record(Frigger (No 1) at [45]). A further example wathe FSF balance sheet, which waprepared by MrFrigger at an undisclosed time for an undisclosed purpose (Frigger (No 1) at [46]). Neither waany evidence adduced revealing exactly when nor how the appellants’ children, Jessica and Michael Frigger, were appointed atrustees. Similarly, there wano evidence adduced to support the contention that the nature of the security interest that waregistered 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 registrationwere lodged (Frigger (No 1) at [49]). The appellantalso failed to explain the fact that none of the shareappeared to have been acquired in the name of HAF. The primary judge noted that MrFrigger’evidence may be supported by holder identification statementor other share registry records; however, these were not produced (Frigger (No 1) at [50]). Finally, there wano evidence explaining why the sharethat were held at the time when the appellantwere replaced atrusteehad 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 waa seriouquestion to be tried, it wathikind of evidentiary uncertainty that ultimately persuaded the primary judge to refuse the ordersought by the appellants: Frigger (No 1) at [52].

40    The second judgment, Frigger (No 2), habeen relevantly summarised above save with respect to the appellants’ interlocutory application for summary judgment, which waultimately refused. At thistage it ialso worth noting commentmade by the primary judge with respect to the evidence adduced in support of the interlocutory applicationfor summary judgment and discovery. AhiHonour had said in Frigger (No 1), to succeed at trial, the appellantwould need to establish that, at the commencement of their bankruptcy, the BOQ1 and BOQ2 accounteither 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 appellantalleged that thiwaestablished on the evidence aa result of transactionby which the trustee of the trust exchanged other trust assetfor BOQ1 and BOQ2. However, apointed out by the primary judge, the appellantwould need evidence establishing that at the point when the fundfirst became subject to the trust, there waan objectively manifested intention to that effect (Frigger (No 2) at [17]). Critically, hiHonour noted that Mr and MrFriggerapplication for summary judgment hinged upon the extent to which the evidence they adduced could establish that BOQ1 and BOQ2 were FSF assetat the time of commencement of the bankruptcy (Frigger (No 2) at [22]). HiHonour drew particular attention to the fact that BOQ1 wain Mr Frigger’name and BOQ2 wain MrFrigger’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 Friggerin their capacity atrustee 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 ato when the appellantceased to be trusteemade no mention of 21 July 2018, being the date MrFrigger claimed thichange of trustee occurred, and wadated 1 July 2018, the date to which MrFrigger claimed the removal wabackdated (Frigger (No 2) at [25]).

(2)    The notification of change of trustee to the Australian BusinesRegister filed on 21 July 2018 removing the appellantaindividual trusteeand replacing them with HAF stated that these changewere to take effect from 1 July 2018 did not necessarily support a finding that the appellantwere trusteeof the fund at the time that BOQ1 waopened (Frigger (No 2) at [25]).

(3)    Although being potentially probative (albeit without the benefit of cross-examination and the context of a full hearing), hiHonour could make no finding about when (or whether) the change of trusteeoccurred based on a minute of meeting of the FSF trusteedated 21 July 2018, recording resolutionthat the four individual trusteebe removed and replaced with HAF, arelied upon by the appellant(Frigger (No 2) at [25]).

42    Regarding BOQ1, there waalso no evidence ato when the account wagiven the FSF designation (Frigger (No 2) at [32]). The most that waprovided waa number of internet banking printoutthat merely possessed the label ‘Frigger Super Fund’ beneath a heading ‘Account Name’, but did not disclose who gave it thidenotation, or when or how thicame about: Frigger (No 2) at [32]. Athere wano further evidence in support, the primary judge placed no weight on thievidence: Frigger (No 2) at [32]. Although the appellantadduced 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 thiaccount wain evidence indicating that BOQ1 waopened with a deposit of $50 withdrawn from BOQ2 on 2 July 2018. It made no reference to the FSF. There waalso no documentation verifying a claim by MrFrigger in her affidavit sworn 25 July 2019 that Bank of Queensland advised her that it wanot possible to transfer the fundfrom BOQ3 to (seemingly) BOQ1 (Frigger (No 2) at [37]).

44    Regarding BOQ3, two bank statementfor thiaccount were produced but also made no reference to the FSF. Similarly to BOQ1, the internet banking printoutproduced also denoted the account name aFrigger Super Fund, but no further evidence waproduced in support (Frigger (No 2) at [39]). A balance sheet of the FSF Aof June 2018 included a line item that appeared to correspond with the total balance of BOQ3 aat 30 June 2018. However, the document waheaded H & A Frigger atf Frigger Super Fund, which the primary judge noted appeared to suggest that the balance sheet wagenerated some time after 1 July 2018, and no evidence waproduced ato when it waprepared or by whom (Frigger (No 2) at [41]). The primary judge therefore found that thidocument had limited use and that it did not establish that the respondentdid not have a reasonable prospect of defending against the allegation that the fundin BOQ1 were held on trust on the termof the FSF: Frigger (No 2) at [41].

45    Bank statementwere also produced in evidence by Mr and MrFrigger which seemed to indicate that the source of the fundin BOQ2 came from two HSBC accounts. However, none of those bank statementmentioned the FSF and the only documentary evidence in support of the appellants submission that these accountwere held in their respective nameatrustee of the Frigger Super Fund waa single document. Thidocument waan invoice that waissued 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 wahardly conclusive: Frigger (No 2) at [44].

46    Regarding BW1, which waasserted 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 thiaccount which waissued by HAF atrustee for the FSF idated 5 February 2019. The primary judge found that thiinvoice provided little support to Mr and MrFriggers case ait post-dated the sequestration order: Frigger (No 2) at [46]. The only other two pieceof evidence in support of the BW1 account being an asset of the FSF waa statement to that effect in MrFrigger’first affidavit and a second statement in another affidavit of MrFrigger. The first statement wafound by the primary judge to be a statement made “at a high level of generality”: Frigger (No 2) at [47]. The second statement wato the effect that the appellanthad provided evidence and explanationto the Official Trustee, after which it determined the account wasuperannuation funds. However, the primary judge did not find there to be any documentary evidence provided ato what MrFrigger alleged to be the Official Trustee’conclusion: Frigger (No 2) at [48]. The primary judge also found that an audit report which waannexed to MrFrigger’first affidavit of 6 March 2019 did not contain any financial statementnor did it establish any other information pertaining to what the assetof the trust were at the time that affidavit wamade, 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 wasufficient to establish a prima facie case that the ultimate source of fundin BOQ1 and BOQ2 wathe BW1 account. The primary judge also concluded that thifinding wanot the same aa finding that there waa prima facie case that the respondenthad no reasonable prospect of defending the claim that the fundare held on trust on the termof the FSF Trust Deed, to allow the summary judgment application: Frigger (No 2) at [62].

48    Specifically, hiHonour provided two main reasonfor this. First, ahighlighted 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 wagiven little to no weight, there waan “almost complete absence of any objective manifestation of an intention that BOQ1 iheld on the termof the FSF”: Frigger (No 2) at [64]. More pointedly, the primary judge noted how the relevant “BOQ” accountawell aBW1, were opened in MrFrigger’name only, and thipointed “objectively in the opposite direction” of manifesting an intention that these accountbe part of the FSF: Frigger (No 2) at [65]. The cumulative effect of thiwathat the evidence failed to establish a pattern of the trusteeof the FSF moving fundfrom one account in their name(atrustees) to another in their name(atrustees): Frigger (No 2) at [66]. The documentary evidence fell short of proving that the fundwere subject to the termof the FSF Trust Deed.

49    Although the appellantdid not seek summary judgment concerning the declarationabout the ownership of the Residential Properties, the evidence warelevant to the respondents’ application for discovery. The primary judge made the following observationabout the relevant evidence:

(1)    The declarationof trust over the relevant propertienoted that the powerof the trustee over the land are contained in the FSF Trust Deed, despite MrFrigger being named athe trustee (Frigger (No 2) at [72]).

(2)    The lease for the Como property notethat the owner iMrFrigger atrustee for the FSF, but iboth undated and unsigned; therefore, little weight could be placed on it (Frigger (No 2) at [73]).

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

(4)    The evidence wanot clear ato 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 wasold at 11 February 2016 or any other time (Frigger (No 2) at [76]).

(5)    The invoicefor rent and other chargefor the Residential Propertieand the Hobart property issued in the name of HAF atrustee 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 waprobative, though the documentthat post-dated the sequestration ordermust 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 fundin the BW1 account, and there waa lack of any documentary evidence of any objective manifestation of intention that the fundin any of the bank accountwere held on trust on the termof 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 damagefor defamatory imputations. Thiarose in relation to a letter published by MrTrenfield to the Australian Financial ComplaintAuthority on 27 September 2019. The application warelevantly dismissed.

53    The fourth judgment, Frigger v Trenfield (No 4) [2020] FCA 797, mainly concerned the date at which the calculation of the alleged lossewith respect to the Main Portfolio ought to be fixed. The primary judge ordered that the trial be confined to the issuein the then third amended originating application which did not claim losse(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 orderthat MrTrenfield iguilty of three countof contempt of court, and an order for punishment for the alleged contempt. The appellantalleged that MrTrenfield had breached an implied undertaking to the Court not to use certain documentobtained in the course of those proceedingother than for the purposeof those proceedings. The appellants also sought summary judgment with respect to final relief for MrTrenfield’removal atrustee in bankruptcy, and a separate order that the administration of the bankrupt estatebe returned to the Official Trustee. The interlocutory application waultimately dismissed. HiHonour held that MrFrigger wanot compelled to file an affidavit annexing the two documentthat were the subject of the chargeeither 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 lineof authority concerning whether production must be compulsory for the implied undertaking to arise, the primary judge ultimately found that it wanot necessary to decide thiissue aMrFrigger’affidavit of 6 March 2019 wasworn and filed voluntarily: Frigger (No 5) at [59]–[60]. Ultimately, the primary judge found that no relevant element of compulsion wapresent, no implied undertaking attached and MrTrenfield wanot guilty of the three chargeof 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 applicationwhich were brought by each of the parties.

56    The appellantfiled an application for leave to amend their originating application in termof a minute of fourth amended application.

57    The first respondent filed applicationfor the joinder of certain partieaadditional respondents, leave to file a cross-claim out of time and for discovery. The appellants’ application wapartly refused.

58    Three changewere proposed:

(a)    to make clear that the appellantwere suing in their capacity atrusteeof the FSF;

(b)    to amend certain declarationsought so that assetthat are the subject of the declarationare no longer described abeing held by the appellantabare trustees; and

(c)    to seek additional orderrequiring the first respondent to remove a stop said to have been placed on a bank account which appearto be associated with a share portfolio that iin 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 wapermitted without objection from the first respondent: Frigger (No 6) at [5]. The second change waalso permitted, athe 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 waultimately refused, athe primary judge found that a powerful factor militating against granting leave wathat the first respondent offered to undertake that if the sharein 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]. Thirepresented the best possible outcome for resolving a relatively minor issue without involving the court: Frigger (No 6) at [14]–[15]. Athe appellantrejected the offer “for no good reason”, leave warefused: Frigger (No 6) at [17].

60    The first respondent’joinder application warefused save with respect to granting leave to amend the originating application to identify that the appellantwere suing in their capacitieatrusteeawell atheir capacitiearegulated debtors, and joining HAF aa party. The first respondent sought to join Mr and MrFrigger to the proceeding arespondentin their capacity atrusteeof the FSF awell aHAF and the appellants’ adult children: Frigger (No 6) at [18]. Athe primary judge granted leave to amend the originating application to make clear that the appellantwere suing in their capacity atrusteeawell ain their capacity aregulated debtors, the first part of the joinder application warefused: Frigger (No 6) at [31]. The joinder application with respect to HAF wagranted athe company waan immediate former trustee of the FSF at relevant timeand the appellantwere itdirectorand shareholders: Frigger (No 6) at [38]. With respect to the appellants’ adult children, the primary judge did not consider it appropriate to grant leave. Thiwabecause the ordersought by the appellantwere held not to affect them in any prejudicial way: Frigger (No 6) at [39]. Moreover, if an order in favour of the appellantwamade, 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 possibilitiethat the appellants’ adult children are still trustees, or will be able to commence their own proceedingto re-agitate the issuebefore that proceeding, were not more than theoretical: Frigger (No 6) at [46].

61    The remainder of the first respondent’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 waa close connection between the subject matterof the proceeding and of the proposed cross-claim (Frigger (No 6) at [50]), hiHonour also found that prejudice walikely to arise Frigger (No 6) at [51]. With respect to the application for particular discovery, orderwere subsequently made, adiscussed at [25]–[33] above. Regarding the first category of documentsought, the primary judge found that evidence produced by MrFrigger gave rise to a possibility that another CommSec portfolio waused by the trustee of the FSF to trade shareheld in that capacity. The primary judge considered that such evidence could therefore shed light on whether the sharein 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 noticefrom 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 waregistered may have been relevant in the proceeding, given that it waclaimed to be the source of trust fundtraceable into other accounts. Specifically, although the St George account had already been the subject of the discovery orderof 29 November 2019, that occurred on the assumption that it wain MrFrigger’name, whereaevidence had been produced showing that it wain Jessica Frigger’name: Frigger (No 6) at [63]–[64]; and

(2)    the appellantincorrectly resisted discovery of the other pageof a Citibank statement from November 2018. Although the Citibank account wanot listed specifically in the discovery orderof 29 November 2019, the relevant order had not been limited to the specified accounts, it actually extended to “accountheld in the name of any or all of the applicantand the trustee(including the former trustees)”: Frigger (No 6) at [65]. The appellantmerely made a “bald assertion” that the Citibank accountwere 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 wafiled after the trial had ended and judgment wareserved. It also included a list of ordersought by the appellants, in the event that leave to re-open be granted. The purpose of the re-opening application wato give the appellantthe opportunity to object to partof, and exhibitto, certain affidavitthat had already been received into evidence, awell ato seek to adduce further evidence in support of those objectionand additional affidavitsworn by Mr and MrFrigger respectively. Specifically, the appellantsubmitted that:

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

(2)    the first respondent should be ordered to write to varioushare registrieand retract the letterthat she sent to them on 24 April 2020 and 29 September 2020, on the alleged basithat they included falsehoods: Frigger (No 7) at [3].

63    The appellantsubmitted that thiarose in the context where they misapprehended the above claimed factand law, and only became aware of thiwhen served with the first respondent’affidavit of 16 September 2020. Asuch, they were unable to object to the first respondent’evidence during the trial or prior to itcommencement. It ifurther worth noting that, in response to the appellants’ allegation that the letter of 3 September 2020 sent by the first respondent to Just SMSF Auditwafalse, the primary judge informed the appellantof the provisionof 138 of the Evidence Act 1995 (Cth) (Evidence Act).

64    The application waultimately dismissed on the basithat the appellantfailed to demonstrate any good reason to re-open the trial given that the partiehad already closed their cases, both MrFrigger and MrTrenfield were cross-examined on the basiof 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’evidence, the primary judge noted that the letterthe appellantreferred to were all in evidence in applicationwell 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 wanoted that the appellanthad alwaybeen “alive to their ability to allege impropriety against MrTrenfield on [the basithat MrTrenfield’letter of 28 August 2019 to CommSec waan ‘abuse of process’]”: Frigger (No 7) at [29]. While they might not have known the precise termof 138 of the Evidence Act, they had sufficient knowledge to claim that the evidence should be excluded because it waobtained by MrTrenfield abusing her power awaactually claimed by MrFrigger in her affidavit filed on 18 September 2020: Frigger (No 7) at [30].

65    Even though the primary judge acknowledged that the four established classeof reasonfor re-opening a matter are not closed, the circumstancewere such that they did not justify such an outcome: there waa “lack of a satisfactory explanation for why the objection wanot raised during the trial”: Frigger (No 7) at [32]. Neither did the appellantpresent clear evidence of seriouillegality or impropriety by another party to justify re-opening the matter: Frigger (No 7) at [34], [41]. The appellantalso failed to explain why they did not raise an objection to the evidence they sought to exclude on the basithat it waadduced solely to impugn MrFrigger’credibility: Frigger (No 7) at [45]. Furthermore, were the objectionupheld, a large volume of documentary evidence and a significant quantity of oral evidence would have to have been excluded. Thiwould have posed significant implicationand illustrated “why objectionof that kind need to be made and determined during the trial rather than after it”: Frigger (No 7) at [47].

66    The appellantalso sought leave to re-open for the purpose of producing further evidence, namely, Mr Frigger’(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 questionconcerning a potentially significant issue in the proceeding: Frigger (No 7) at [50]. Even so, the attached email wamerely a “general statement … unlikely to assist the court” concerning the dateon which an unspecified TFN waentered on the respective share registry’system acrosdifferent holdings: Frigger (No 7) at [50]. Mr Frigger’affidavit concerned matterthat were clearly in issue at the trial, which could have been adduced then. Similarly, the primary judge therefore held that there wano good reason to allow the appellantto adduce that evidence after the trial had finished: Frigger (No 7) at [51]. The same reason wagiven for rejecting leave to re-open for the purpose of putting into evidence an affidavit which MrFrigger swore on 17 September 2020: Frigger (No 7) at [52].

67    It iworthwhile addressing, at thipoint, two other applicationfor 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 statementand annual returns, anoted above.

68    Ato the first application on 7 and 9 September 2020, the primary judge gave the appellantleave to re-open their case to tender certain documents. The application wanot opposed and the documentwere admitted into evidence. The appellantmade several submissionin 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 iin evidence in the court” (Transcript 2020-09-07 T.723);

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

(4)    to negate the first respondent’allegation the appellantadvised varioushare registrieof the FSF’TFN only in September 2019 (Transcript 2020-09-07 T.724); and that

(5)    there wanot effectively a 50 per cent withholding tax on the dividend(Transcript 2020-09-07 T.725).

69    The reason for granting leave wathat hiHonour wasatisfied that the documentwere arguably relevant for the purpose of establishing that BOQ1 and BOQ2 were FSF assetand that the TFN for the FSF had been notified to share registriebefore September 2019: Liability Judgment at [260].

70    Ato the second application on 21 September 2020, the primary judge refused to grant leave. The appellantsought leave after counsel for the first respondent had delivered hioral closing submissionand on the same day on which the appellantmade their closing submissions. The basiof the application were the following purposes:

(1)    to admit into evidence an account transaction list for the FSF which MrFrigger had obtained from the Australian Taxation Office (ATO) BusinesPortal;

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

(3)    to recall MrFrigger aa witnesto respond to what she described a“numeroufalse allegationof substantial wrongdoing against the [appellants], which allegationeffectively amounted to tax fraud”.

71    MrFrigger’affidavit dated 17 September 2020 in support of thiapplication listed some 40 “false allegations”. The primary judge noted that thilist appeared to have been based on MrFrigger’contemporaneounoteand presumed for the purposeof the application that it waaccurate: Liability Judgment at [263].

72    The affidavit provided more succinctly the “essential basis” of MrFrigger’application to be recalled aa witnespursuant to 46 of the Evidence Act:

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

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

6.2    All financial statementwere prepared after sequestration date;

6.3    All annual returnwere audited and lodged after sequestration date;

6.4    My husband and I decided after sequestration date what assetwe would allege are trust assetand what assetare not;

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

73    It iworth noting that many of these groundwere substantially repeated in Ground 9(g) of the appellantsamended notice of appeal.

74    Asubmitted and accepted by the primary judge, these documentappeared to be relevant to the question of when the financial statementand annual returnwere prepared, an important issue in the proceeding: Liability Judgment at [265].

75    Notwithstanding this, the application waneverthelesdismissed. The critical reason for thiwathat the appellanthad been well and truly on notice, even spanning back before the trial, of the importance of such documentand that thiwould be in issue and that the appellanthad ample opportunity to adduce evidence before they closed their case: Liability Judgment at [266]. Asummarised above, these issueand the importance of their and the FSF’financial recordwere raised aearly athe first interlocutory judgment in Frigger (No 1). These issueand the lack of complete documentation were further raised and addressed comprehensively in the first respondent’written opening submissionfiled 12 July 2020, 15 daybefore the commencement of the trial, and noted that the evidence waeither “generally unreliable”, “should be given no weight”, “they were prepared by MrFrigger with no explanation ato when they were prepared”, “they were likely prepared after the sequestration order”, and “were full of inconsistencieand accurate information such that they cannot be relied on aa source”: Liability Judgment at [268]. MrFrigger waalso extensively cross-examined on thiissue during the trial: Liability Judgment at [269]. Similar to the reasongiven in Frigger (No 7), the evidence the appellantsought to adduce at thistage 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 wano other good reason why the interestof justice required the case to be re-opened: Liability Judgment at [271]. Asuch, leave to recall MrFrigger under 46 of the Evidence Act warefused.

76    The eighth judgment, Frigger v Trenfield (No 8) [2021] FCA 569, concerned a subsidiary interlocutory application brought by MrTrenfield responding to the appellants’ stay application (which isummarised immediately below) to set aside a notice to produce that had been served by the appellantunder r 30.28 of the Federal Court Rule2011 (Cth) (Rules). Orderwere made pursuant to r 1.34 of the Rules dispensing with any requirement for the first respondent to comply with thinotice 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 basifor the stay application wathat the appellanthad commenced a separate proceeding in the court for the annulment of their bankruptcies. The application waultimately dismissed.

Liability judgment

78    The final judgment, (the Liability Judgment), comprehensively addressed the substantive issuein the proceeding below. It numbersome 751 paragraphacros226 pages. For the sake of brevity, only those elementpertinent to the procedural history of the proceeding below and thiappeal will be summarised.

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

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

(2)    issues concerning orderrelating to costthat were made by the Court of Appeal of Western Australia; and

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

Costjudgments

80    The eleventh judgment, Frigger v Trenfield (No 11) [2022] FCA 326 (Frigger (No 11)), concerned ordersought by the first respondent relating to the costof the proceeding, following the delivery of the Liability Judgment. From a high level, the appellantwere ordered to pay the first respondent’costof the proceedingon a party-party basis.

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

82    Finally, the thirteenth judgment, Frigger v Trenfield (No 13) [2022] FCA 906, involved an interlocutory application that wabrought by the appellantto suspend the judgmentin Frigger (No 11) and Frigger (No 12). The primary judge dismissed the application.

The witnesses

83    For the sake of completeness, it iworth repeating the primary judge’observationato the reliability of the evidence provided by the two witnesses: MrFrigger and MrTrenfield. Mr Frigger did not give evidence.

84    With respect to MrFrigger, the primary judge concluded that she had knowingly altered documentwhich she put into evidence, in order to create a false impression that the documentsupported the appellants’ case: Liability Judgement at [51]. HiHonour relied upon the following evidentiary issueto reach thiconclusion.

85    First, the St George Bank statement annexed to MrFrigger’affidavit sworn 6 March 2019 included the notation Frigger Super Fund beneath the account name MrA Frigger. Yet, an identical bank statement bearing the same account number and identical transactionannexed to MrFrigger’affidavit sworn 20 April 2020 included the notation Jessica Ann Frigger beneath the account name MisJ Frigger. An email exchange between MrTrenfield’staff and Westpac Banking Corporation annexed to MrTrenfield’affidavit sworn 22 May 2020 noted that the account wa“not held under Hartmut Hubert Josef Frigger and Angela Cecilia Therese Frigger”: Liability Judgment at [58]. In cross-examination, MrFrigger explained that the account wanot in her name and that she included the ‘Frigger Super Fund’ notation herself: Liability Judgment at [60]–[62]. The primary judge found MrFrigger’explanationimplausible and were provided “in an attempt to dispel the obviouinference … that MrFrigger altered the document … in an attempt to persuade the court that it waan 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 aat 30 June 2018 annexed to MrFrigger’affidavit sworn 6 March 2019, also included a similar notation to the FSF. Yet, the same document obtained by MrTrenfield and annexed to her affidavitsworn 11 September 2019 and 22 May 2020 did not bear thinotation. Thiinconsistency wafurther expounded by other CommSec financial year summariefrom different accountwhich did include referenceto the FSF. The primary judge found MrFrigger’explanationto be similarly implausible for a similar purpose: Liability Judgment at [83]–[84].

87    Thirdly, other matterconcerning MrFrigger’credibility were also canvassed: Liability Judgment at [86]–[87]. Most particularly, the primary judge found her demeanour in the witnesbox to be unconvincing: Liability Judgment at [88]. The totality of the above evidence led to the primary judge concluding that MrFrigger wanot a truthful witness: Liability Judgment at [89].

88    Conversely, the primary judge concluded that, unlike MrFrigger whose credibility wacentral to the proceeding being the party with the onuof proof and most of the contentiouevidence, MrTrenfield presented aan experienced professional in the witnesbox, although could have been more forthcoming in some circumstances: Liability Judgment at [92]–[95].

89    The primary judge’general or overarching findingof credit against MrFrigger and specific findingof credit against her affecting inferencedrawn or not drawn, together with placewhere the primary judge declined to make an adverse finding against MrFrigger were afollows:

Finding

Pinpoint in Liability Judgment

General / overarching findingato credit

MrFrigger

[51], [86]–[89]

Specific findingato credit: inference drawn / refused to be drawn or evidence not accepted related to adverse credit

MrFrigger’alteration of the St George Bank statement

[52]–[72]

MrFrigger’alteration of the CommSec statement

[73]–[85], [383], [385]

MrFrigger’reliance on adverse tax consequencein support of inference that the fundin BOQ1 were part of the FSF

[156]

MrFrigger’evidence about the datewhen varioutrusteeof the FSF were appointed

[181]–[182], [195], [196(3)]

Authenticity of the 2014 Minutes

[183], [468]–[472]

False submission of MrFrigger ato no notice of contravention being received from FSF auditors

[235], [238]

MrFrigger’evidence ato the value of the assetin the FSF

[247]

The handwritten 2018 annual return

[248]–[251]

The applicants’ tracing exercise (First Reconciliation)

[307]–[310], [313], [316]

MrFrigger’explanation of the moneyin the Main Portfolio

[372], [373(3)]

MrFrigger’evidence about the ability to inform CommSec whether shareare held beneficially or not

[386]–[388], [403]–[404]

MrFrigger’evidence regarding the use of the Main Portfolio

[394]–[397]

MrFrigger’evidence regarding date of notification of TFN to share registries

[427], [439]

MrFrigger’evidence about income earned from the Residential Properties

[480]–[481]

MrFrigger’evidence that she and Mr Frigger have conducted a businesof investment in real property since 1985

[521]

Instancewhere the primary judge declined to make an adverse credit finding

Whether particular BW1 account statement wadeliberately altered by MrFrigger

[223]

Whether Citibank statementwere deliberately altered by MrFrigger

[289]

Authenticity of the 2014 Declarations

[466]–[467]

Conclusionato evidence

90    Aa 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 wamade more onerougiven the lack of “any verbal statementof any kind, written or spoken, formal or informal, expressing an intention that the disputed assetbe part of the FSF at relevant times” (original emphasis). The most that waprovided were the 2014 Declarationand some internet banking statements, which have already been alluded to above, and assertionby MrFrigger.

91    After making relevant findingato who waa trustee of the FSF and when, the primary judge went on to consider the more important threshold issue of whether the FSF waa regulated superannuation fund within the meaning of the SIAct. Ultimately, it waheld that the FSF waa regulated superannuation fund at all material times, and that it could only cease to be in the event of fundamental defectin itconstitution such that it no longer complied with the requirementof 19 of the SIAct: Liability Judgment at [198]–[209], [654].

92    The next critical issue for consideration wawhether the disputed assetwere part of the FSF, aa regulated superannuation fund, such ato exempt the appellantunder the Bankruptcy Act 116(2)(d)(iii)(A).

93    However, aa preliminary issue, and despite the appellantseeking no declaration that the BW1 account waan asset of the FSF, the primary judge noted that the ultimate issue turned upon whether BW1 waan asset of the FSF: Liability Judgment at [211]. Thiwabecause the appellantclaimed it to be the main operating account of the FSF and that the securitiein the Main Portfolio were purchased using fundin BW1. Further, the first respondent accepted that the fundin BOQ1 could be traced back to BW1.

94    Awahighlighted previously, evidentiary uncertaintieproved to be a significant barrier, including with respect to BW1. In the primary judge’own words, the evidence wa“simply a mes… [and] a morasin which no sure footing can be found”: Liability Judgment at [220]. For example, a balance sheet for the FSF aat 30 June 2019, signed by the appellantand dated 19 June 2020, was likely to be self-serving given that it waprepared by MrFrigger 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 ato the balance sheet’correctness: Liability Judgment at [229]. Similar findingwere made with respect to other balance sheet(see, e.g., Liability Judgment at [232]–[241]). Not a single balance sheet in evidence wafound to have been reliably dated as having been produced before the sequestration date, asuch the primary judge found that the balance sheetwere not reliable evidence: Liability Judgment at [243]. Similar concernover the reliability of the annual returnproduced were also expressed (Liability Judgment at [244]–[251]), athese returnwere either likely produced after the sequestration date or had large variationin figureor inconsistenciebetween versions. The appellantalso produced documentconcerning the registration of BW1 on the PPSR: Liability Judgment at [277]. However, explanationconcerning a number of issuewith the registration document were unsatisfactory (Liability Judgment at [278]–[280]) or the document itself waadverse to the appellants’ case: Liability Judgment at [281]. The registration waheld simply not to convey the necessary manifestation of intention that BW1 wato be held by the appellantsubject to the trustestablished by the FSF Trust Deed.

95    At least with respect to the receipt of fundin relation to the Edward Street property, the Residential Propertieand the Hobart property, the primary judge held that the appellanthad made out part of their case, but evidence from the Armadale property wahighly tenuous: Liability Judgment at [294]. The transactional history of the account led the primary judge to ultimately conclude that BW1 waused aan account for the receipt of income, tax refundand payment of expenseand other outgoingof the FSF, but awell afor other receiptand paymentnot 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 aan asset of the FSF: Liability Judgment at [329]. Athe evidence appeared to suggest that the BW1 fundwere used for mixed FSF and non-FSF purposes, the most that could be concluded wathat it contained FSF funds. The primary judge concluded that it waimpossible to ascertain what proportion of the fundcould 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 issuethat arose with respect to each of the disputed assets.

Disputed asset– BOQ1 and BOQ2

98    With respect to the BOQ1 and BOQ2 accounts, the primary judge proceeded on the basithat the ultimate issue to be considered wawhether there waan objective manifestation of intention to declare the assetto be trust assetwithin the FSF, having the result that the appellanthold beneficial interestin the accountapart of their interestin the FSF aa regulated superannuation fund: Liability Judgment at [31]. Thiwadespite the appellantpleading their case on a narrower basis, namely that the money in those accountwaoriginally earned by the FSF arental income from two propertiein Perth and Hobart: Liability Judgment at [29].

99    Beginning with BOQ1, the appellantrelied on tracing principleand general evidence about their subjective intention to shift fundbetween accountin order to establish that the BOQ1 fundwere FSF funds: Liability Judgment at [340]–[341]. Although the first respondent accepted that all the fundin BOQ1 could be traced from BW1, given the conclusionthe 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 fundcoming from BW1 were FSF fundwhen paid out: Liability Judgment at [340]. The primary judge found that merely pointing to surrounding circumstancewhich are arguably consistent with a trust on the termof the FSF existing over BOQ1 wanot enough and nothing about the purported investment strategy described by the appellantnecessitated that it wacarried on by them in their capacity atrusteeof the FSF: Liability Judgment at [342]. The evidence wasuch that the primary judge held that the appellanthad not discharged their onuof establishing that on 2 July 2018, when BOQ1 waopened by Mr Frigger in hiname, that it waan asset of Mr Frigger held in hicapacity atrustee of the FSF: Liability Judgment at [347].

100    Also in evidence waan 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. Athe primary judge noted, it wanot entirely clear what exactly the appellants’ submission wain relation to thinotification. Given that the email wanot sent at the same time awhen BOQ1 waopened and the initial amount had been deposited (2 July 2018), and that it wasent just prior to the sequestration order being made, the email wato be treated with caution and walikely self-serving: Liability Judgment at [352]–[353]. The primary judge proceeded on the basithat the appellants’ contention wathat Mr Frigger wamanifesting an intention that BOQ1 become an asset of the FSF by notifying the Bank of Queensland that the TFN for the FSF wathe TFN for BOQ1: Liability Judgment at [354], [356]. However, uncertaintieato what Mr Frigger objectively intended to convey in sending the email, given the lack of clarity ato itcontents, led the primary judge to conclude that the email did not convey a sufficient degree of clarity ato convey the alleged objective intention: Liability Judgment at [367]–[368].

101    Ultimately, it wafound that the appellanthad failed to establish that either BOQ1 or BOQ2 were held on the trustof 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 athe 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 appellantaccepted, that in order to determine whether they were prevented, atrusteeof the FSF, from trading sharelisted on ASX because of the sequestration order they would need to establish that the securitiewere assetof the FSF: Liability Judgment at [34].

103    The primary judge comprehensively canvassed a vast array of evidence that the appellantproduced in support of establishing that the securitiein the Main Portfolio were FSF assets. HiHonour’observationare summarised below:

(1)    Although it iapparent that fundfrom BW1 were used to purchase sharein the Main Portfolio, nothing establishethat those fundwere necessarily assetof the FSF.

(2)    The respective financial statements, audit reports, annual returnand PPSR registration are not reliable evidence for the same reasoncanvassed above in relation to BW1.

(3)    There inothing on the face of any document issued by CommSec to indicate that the sharein the Main Portfolio are assetof the FSF.

(4)    The appellantfailed to produce even one record obtained from any share registry in order to prove that the sharethe appellantsay they held were recorded abeing held in their capacitieatrustees. Thievidence waavailable for the appellantto produce, but they did not produce it, aa result, the primary judge inferred that such documentary proof did not exist. The limited documentthat were produced into evidence made no mention of the FSF or any trust at all, rather the Holder Identification Number (HIN) of the relevant securitielisted Mr and MrFrigger athe holderof the shares: Liability Judgment at [413]. There were also a handful of buy confirmationissued by CommSec in respect of the purchase of securitieby the appellantwhich made no mention of the FSF, but did refer to the applicantin their personal capacities: Liability Judgment at [413].

(5)    Although there waevidence that the FSF TFN had been notified to share registries, which waearlier found to have potentially conveyed an objective manifestation of intention, there were a number of issuethat led to an inconclusive outcome. Thiincluded omissionato when they were notified or when certain eventoccurred, any mentionto the FSF, or that it had been notified after the sequestration date.

(6)    Four of the securitiein the Main Portfolio administered by Link Market Service(Link) had been notified of the FSF TFN before the commencement of the bankruptcy, and two more administered by Link had been notified after the commencement of the bankruptcy, but prior to the sequestration date. Even so, the evidence did not establish that the notification of the TFN wamade contemporaneously with the acquisition and, therefore, did not support the appellants’ case that there waan objective manifestation of an intention to hold the securitiein trust at the time of their acquisition. Further the evidence did not establish that the share registry recorded the securitieaheld in trust for the FSF. Otherwise, the appellanthad not articulated a case that notification of TFN after acquisition but before the sequestration orderwaevidence of an objective manifestation of an intention to hold the securitieon trust at the time of notifications.

104    Ultimately, these evidentiary issuefailed to assist the appellantin discharging the burden of proof. Thiled the primary judge to conclude that the appellanthad failed to prove that any of the securitiein the Main Portfolio were assetof the FSF: Liability Judgment at [458].

Disputed asset – Residential Properties

105    With respect to the Residential Properties, the primary judge proceeded on the basithat the ultimate issue wawhether they were assetof the FSF, in light of the written declarationof trust made on 1 July 2014: Liability Judgment at [37]. Again, thiwadespite the appellantpleading their case on a narrower basis, namely, whether the first respondent had a caveatable interest in the Residential Properties: Liability Judgment at [38].

106    Critical to the determination of whether the Residential Propertiewere assetof the FSF were the 2014 Declarationin evidence produced by the appellants. Thiissue primarily turned upon the construction of the following clause: “The Powerof the trustee over the Land i[sic] contained in the FSF Trust Deed dated 1 July 1997”: Liability Judgment at [482]–[483]. The Declarationpurported to create a trust abetween MrFrigger atrustee and Mr and MrFrigger abeneficiaries. Each of the Residential Propertiewere held in MrFrigger’name aregistered proprietor. The Declarationwere marked to be effective aat 1 July 2014, and were signed by MrFrigger (atrustee), Mr and MrFrigger (abeneficiaries) and a third person (awitness). Neither of the Declarationwere notified in any caveat lodged against either property.

107    MrFriggeraffidavitsworn on each of 6 March 2019 and 17 June 2020 provided no background or context about the 2014 Declarations, nor did they include any documentary evidence in support of statementmade by MrFrigger that the Residential Propertiewere contributed to the FSF aan in specie transfer, with no consideration being paid: Liability Judgment at [466].

108    Although the first respondent stated, in closing submissions, that the primary judge should find “that the authenticity of those declarationitself idoubtful”, that had not been squarely put to MrFrigger until closing submissions. Asuch, the primary judge proceeded on the basithat the 2014 Declarationwere executed by the appellanton or about the 1 July 2014: Liability Judgment at [467].

109    Also in evidence waa document purporting to be minuteof a meeting of the FSF on 1 July 2014 (1 July 2014 Minutes). The 1 July 2014 Minuterecorded a resolution accepting the Residential Propertieain specie contributionon behalf of Mr and MrFrigger. Unlike the 2014 Declarations, the authenticity of the 1 July 2014 Minutewain issue: Liability Judgment at [468]–[469]. Critically, counsel for the first respondent put to MrFrigger that the 1 July 2014 Minutehad been created by her after the proceedinghad commenced: Liability Judgment at [469]–[470]. Ultimately, the circumstancewere such that the primary judge wapersuaded to make the serioufinding that MrFrigger had deliberately created the 1 July 2014 Minutefor the purposeof putting thialtered document into evidence: Liability Judgment at [471]. In particular, the primary judge noted that the 1 July 2014 Minutewere not put into evidence when the 2014 Declarationwere made on 12 March 2019, nor had they been discovered prior to then athey were only put into evidence via an affidavit sworn 17 June 2020, despite the 29 November 2019 discovery orders: Liability Judgment at [469]. The primary judge also relied on observationconcerning MrFrigger’behaviour in cross-examination. The primary judge noted that MrFrigger’credibility wanot assisted by her sudden recollection of certain events, which strongly indicated to hiHonour that MrFrigger would simply “improvis[e] in the witnesbox to suit her case, rather than any attempt to tell the truth”: Liability Judgment at [472].

110    Given the unreliability of the varioubalance sheetdiscussed above, the primary judge placed no weight on them: Liability Judgment at [474]. The 2018 annual return had a large discrepancy between the amountfor the listed residential real property and the valuefor the Residential Properties: Liability Judgment at [457]. Other evidence post-dated the sequestration order, and could not be taken areliable evidence: Liability Judgment at [476], or there wano independent evidence confirming the dateof earlier market-value declarations: Liability Judgment at [477]–[479]. MrFrigger’general and unsupported evidence ato the purpose for which the rent waearned for each of the Residential Properties, coupled with MrFrigger’credibility, led the primary judge to reject her evidence: Liability Judgment at [480]–[481].

111    After examining the authoritieon the proper construction of documentpurporting to create a trust, the primary judge observed at [488] of the Liability Judgment that:

In each of the [2014 Declarations], the technical language of the creation of a trust iused, in self-described “instruments” expressed in legal language and formally signed and witnessed. The intention of MrFrigger in executing them asettlor and trustee ito be found in the language in each of the declarations, albeit it will be seen that a reference in that language to the FSF Deed necessarily requirethe provisionof that deed to be taken into account awell.

112    The appellantappeared to submit that the proper construction of the 2014 Declarationmeant that MrFrigger held the Residential Propertieatrustee for the FSF beneficiaries. The primary judge noted that, although there waa clear intention to constitute MrFrigger atrustee of the Residential Properties, with herself and Mr Frigger athe beneficiaries, the 2014 Declarationwere ambiguouato the termof the trusts: Liability Judgment at [490]. The primary judge found that it wasignificant that the 2014 Declarationappointed no one else except MrFrigger atrustee and did not include a requirement to transfer the Residential Propertieinto the nameof any of the other trusteeof the FSF, despite cl 33 of the FSF Trust Deed requiring thito be done: Liability Judgment at [491]. Although the 2014 Declarationexpresthat Mr and MrFrigger were to be the beneficiaries, not Jessica and Michael Frigger, thiwaconsistent with the FSF Trust Deed: Liability Judgment at [492]. The primary judge noted at [493], that there were significant deficienciein the 2014 Declarations:

They do not speak in termof contributing to or adding to any existing trust. They do not say that the propertieare to be contributed to the FSF. They do not say that the propertieare to be held by MrFrigger, or anyone else, in her capacity atrustee of the FSF. Subject to the point addressed [later in the primary judgment], they do not say that the propertieare to be held on the termof the FSF. They do not say that the beneficiarietake their interest(s) amemberof the FSF. And they do not provide that the propertieare to be held for the purposeof the FSF, in particular the purpose of providing pensionfor members, which iessential for it to be a superannuation fund.

113    After considering possible intentionwhich could be ascribed to the 2014 Declarations, the primary judge ultimately held that the “preponderant intention” wato create a trust over the relevant property that iseparate to the FSF: Liability Judgment at [496]–[500]. The primary judge found that it would “strain the language” of the 2014 Declarationif the Residential Propertiewere said to be held for the purposeof the FSF, on the termof the FSF Trust Deed: Liability Judgment at [500].

114    The primary judge also noted that it would not assist the appellantwere he to account for the circumstancesurrounding the 2014 Declarations. HiHonour found that the surrounding circumstancewere either irrelevant or, objectively, could do no more than indicate that Mr and MrFrigger were husband and wife and memberof the FSF at the time of the 2014 Declarations: Liability Judgment at [501]. Moreover, the primary judge found that there would be no sense in making a finding that the Residential Propertiebecame part of the FSF. Thiwabecause the 2014 Declarationevinced no intention that these assetwere to be held for the purposeand subject to the obligationof the FSF Trust Deed. Further, to find that the Residential Propertiewere validly contributed to the FSF would be in breach of s65 and 66 of the SIAct: Liability Judgment at [505]–[529].

115    Ultimately, the primary judge held that the 2014 Declarationcreated a trust over the Residential Propertierespectively, each with MrFrigger atrustee and Mr and MrFrigger abeneficiaries: Liability Judgment at [503]. However, the primary judge found that these assetwere not held by MrFrigger in any capacity atrustee of the FSF, or for the purposeof the FSF, or otherwise on the termof the FSF Trust Deed save in so far ait definethe powerof MrFrigger to deal with the Residential Properties: Liability Judgment at [503], [530]–[531].

Issueconcerning Court of Appeal orders

116    The appellantcomplained about the first respondent’conduct in relation to costorderin the Court of Appeal of Western Australia, which have been described above. The appellantclaimed that, in wrongly failing to prevent the costclaimfrom proceeding to taxation and subsequently dealing with the costclaimin the course of calling for and adjudicating on proofof debt, the first respondent caused the appellantto suffer losseequal to the amountso paid out: Liability Judgment at [537]–[538].

117    The first respondent submitted in reply that 58(3) of the Bankruptcy Act neither prevented the successful secured creditorfrom pursuing cost claimagainst the appellants, nor did it prevent them from obtaining the payment out of the security for costs: Liability Judgment at [539]. The primary judge acknowledged that, while the appellants’ liabilitiefor the costof the appealwere provable debts, 58(5) of the Bankruptcy Act operated such that 58 did not affect the right of a secured creditor to realise or otherwise deal with hior her security. Further, the successful respondentin the Court of Appeal proceedinghad an equitable charge or lien over the amountthat had been paid in asecurity for costs. There waalso no evidence of any lossuffered. The successful respondentwere also entitled to have the money paid out of court pursuant to ord 25 r 7 of the Ruleof the Supreme Court 1971 (WA) unlesthe appellantestablished that the Court of Appeal should have ordered otherwise: Liability Judgment at [544]–[545].

118    In light of the above, and other reasonnot presently relevant, the primary judge rejected the ordersought with respect to the consent orderand costassessmentin the Court of Appeal proceedings: Liability Judgment at [549].

Issueconcerning the removal of trustee in bankruptcy

119    The final issue addressed by the primary judge concerned an order which sought to remove the first respondent atrustee of the appellants’ bankrupt estates. The appellantmade numerouallegationto justify the first respondent’removal, which were helpfully summarised at [576] of the Liability Judgment. It inot necessary to extract that list here. For present purposes, it isufficient to outline the reasongiven by the primary judge in rejecting the order sought by the appellants, in short compasand in the following way.

120    First, in relation to the complaintalleging the first respondent’failure to obtain or review information said to be relevant to the question of the capacity in which assetare owned, the primary judge observed that reliance wamade on documentthat were:

(a)    not in evidence (at [585]);

(b)    uncertain ato the contentof evidence (at [586]); or

(c)    simply did not establish any shortcoming in the first respondent’conduct (at [588]).

121    Alternatively, the primary judge held that the relevant complaint had not been properly articulated: Liability Judgment at [593], [597].

122    Secondly, in relation to the complaintalleging the first respondent’failure to take steprequired in the administration of the bankrupt estate, the primary judge observed that the appellanthad not established that the first respondent had acted other than reasonably or that there waa lack of evidence which could discharge the burden of proof: Liability Judgment at [612][613].

123    Thirdly, in relation to the complaintalleging that the first respondent inhibited the appellantfrom dealing with the disputed assets, the primary judge observed that either the complaint had not been properly developed (and had partially been addressed with respect to the reasonconcerning BW1), the findingmade with respect to the disputed assetnegate the complaint, or there waa lack of evidence to properly understand the basion which the complaintwere made: Liability Judgment at [615], [626], [639], [643], [646] and [648].

124    Fourthly, in relation to the complaintregarding the correspondence from the first respondent to third parties, the primary judge held that the appellanthad not properly articulated their complaint and that the first respondent’assertion in the letter sent to the ATO on 9 April 2019 had been misconceived: Liability Judgment at [650] and [654]. Asuch, the appellanthad at least made out their complaint to the extent that the first respondent’subjective purpose for sending the letter wanot a purpose which could have advanced the legitimate objectiveof the first respondent’administration of the bankrupt estates: Liability Judgment at [656]. Nonetheless, there wano evidence and no basito suggest that the first respondent did not subjectively believe that the letter advanced those legitimate objectives, nor wathere anything improper in reporting to the regulator that she had a reasonable belief that the FSF wanot compliant: Liability Judgment at [656]. The appellants’ submission that certain evidence given by the first respondent wafalse warejected by the primary judge.

125    Fifthly, in relation to the complaintregarding the allegedly false evidence given by the first respondent, the primary judge held that, although the evidence complained of waincorrect (Liability Judgment at [673], [678]), thiwaeither an oversight by MrTrenfield, did not impact her credibility aa witnesor did not fall short of the standard of conduct expected of an honest and reasonably competent trustee in bankruptcy: Liability Judgment at [678]. Alternatively, there wasimply an absence of evidence to adequately assesthe complaint: Liability Judgment at [679]–[680]

126    Sixthly, in relation to the complaintregarding the first respondent allegedly signing consent orderproviding for the payment of indemnity costawell athe dismissal of the proceeding in WAD 607 of 2015, the primary judge found that the appellanthad not adduced evidence nor made submissioncapable of establishing that, aa matter of substance, the first respondent’decision to discontinue the proceeding waunreasonable, or unlawful, or otherwise fell short of the standard expected of an honest and reasonably competent trustee in bankruptcy: Liability Judgment at [700].

127    Seventhly, in relation to the complaintregarding the first respondent’alleged collusion with Mr Kitay, the primary judge found that the appellanthad not adduced evidence to sufficiently establish the factual basifor the relevant complaints: Liability Judgment at [705].

128    Eighthly, in relation to the complaint regarding the first respondent’alleged failure to interview the appellants, the primary judge accepted the appellants’ submission that MrTrenfield displayed an inaccurate understanding of her dutiein relation to the relevant standardprovided for under r 42-30(c) of the Insolvency Practice Rule(Bankruptcy) 2016 (Cth) (Bankruptcy Practice Rules), in relation to the interviewing of bankrupts. The primary judge found that r 42-30(c) inot an unfettered discretion, but rather ia requirement to interview the regulated debtor if thiiconsidered to be necessary: Liability Judgment at [715]. The primary judge did however account for three qualificationto thirequirement (see, e.g., Liability Judgment at [716]–[717]). After examining the competing contentionof the parties, the primary judge ultimately held that the complaint wanot made out aMrTrenfield did have a reasonable basito consider that the appellantwould be uncooperative and belligerent, and would not provide reliable information: Liability Judgment at [736]–[737]. The appellants’ adversarial stance towardthe Official Trustee and the first respondent wafound by the primary judge to have “[ranged] from uncooperative to aggressive to obscene”. This, along with the adverse credibility findingmade against MrFrigger in variouproceedingestablished a reasonable basito conclude that there wano utility in MrTrenfield conducting an interview of the appellants: Liability Judgment at [736].

129    Ultimately, despite the primary judge making findingwhich established certain aspectof the appellants’ complaints, the totality of the above observationwere not sufficient to convince the primary judge that these shortcomingwarranted the first respondent’removal atrustee in bankruptcy: Liability Judgment at [739]–[746].

The appeal

130    The appellantfiled a notice of appeal on 13 December 2021 aagainst MrTrenfield. By order dated 17 February 2022, Logan J granted the appellantleave to file an amended notice of appeal.

131    The ordersought by the appellantreplicate substantially those orderwhich were sought in the matter at first instance. The appellantsought the following orders:

(1)    that the judgment and orderof 1 December 2021 be set aside;

(2)    declarationthat the relevant BOQ accountand sharein the relevant CommSec account are exempted assetpursuant to 116(2)(d)(3)(A) of the Bankruptcy Act;

(3)    assessments of damagefor the BOQ1 and Main Portfolio (to be assessed by Logan J in separate proceedings), and that the respondent repay amountpaid out from the Court of Appeal matters;

(4)    orders to the effect that:

(a)    the respondent shall do everything necessary to forthwith remove her caveatover the Residential Properties;

(b)    the respondent be removed atrustee of the appellants’ bankrupt estates;

(c)    the respondent inot entitled to any remuneration and/or disbursementin relation to the matter at first instance; and

(5)    costs of the proceedingbelow and thiappeal.

132    On 16 December 2021, Colvin J made orderdismissing the appellants’ application to stay the primary judgment pending the resolution of the appeal: Frigger v Trenfield (Application for Stay Pending Appeal) [2021] FCA 1605. The basion which the appellantclaimed that the stay wanecessary wato preserve the right of appeal. Although taking the form of an application for a stay, it iworth noting that the appellantactually sought an injunction restraining MrTrenfield from taking certain steps. After reviewing the authorities, Colvin J ultimately held that there wanot a real risk that stepwill be taken on the basiof the correctnesof the decision of the primary judge that would mean that fundcould not be recovered if the appeal wasuccessful or that would otherwise jeopardise the appeal.

The principleof appellate review

133    Whilst it will be necessary to advert to the relevant principlein discussing particular findingand submissions, it ihelpful to identify the fundamental principleof appellate review.

134    The principlegoverning the responsibilitieof the Court on appeal in the review of findingof fact are not in doubt. They are found in High Court authority: most conveniently and contemporaneously expressed for present purposes, in Warren v Coombes (1979) 142 CLR 531 (Warren v Coombes), especially at 545–553, State Rail Authority of New South Walev Earthline ConstructionPty Ltd (in liq) [1999] HCA 3; 160 ALR 588 (Earthline) at 619–620 [89]–[91], Coal and Allied Operations Pty Limited v Australian Industrial RelationCommission [2000] HCA 47; 203 CLR 194 (Coal and Allied Operations) at 203–204 [14]; Fox v Percy [2003] HCA 22; 214 CLR 118 (Fox v Percy) at 124–129 [20]–[31], and Lee v Lee [2019] HCA 28; 266 CLR 129 (Lee v Lee) at 148–150 [53]–[58]. To these casemay be added Robinson Helicopter Inc v McDermott (2016) 331 ALR 550 at 558–559, along awhat wasaid there inot seen adeparting from Fox v Percy: See Lee v Lee at 148–149 [55] and Aldi Foods Pty Ltd v Moroccanoil Israel Ltd (2018) 261 FCR 301 (Aldi Foods) at 306–307 [2]–[3], 318 [54] and 346 [169].

135    The importance of the expression of principle by the majority (GibbACJ, JacobJ and Murphy J) in Warren v Coombewathat it settled the question ato the nature of the review in an appeal by way of rehearing, by disapproving a line of authority ato a measure of judicial restraint in overturning findingof fact reasonably open on the evidence. The reasonof their Honourstated that in deciding the proper inferenceto be drawn from factundisputed or otherwise found, the appeal court will give respect and weight to the conclusion of the trial judge, but, once having reached itown conclusion, will not shrink from giving effect to it. By so doing, it correcterror – error being found by the appeal court reaching a different conclusion to the primary judge.

136    The present importance of the reasonof Kirby J in Earthline (apart from the valuable history of appellate review, including a summary of the ebb and flow of the expression of High Court authority over the yearin 160 ALR at 609–615 [72]–[86]) ithat within hiHonour’reasonat 619–20 [89]–[91] one finda full, nuanced and clearly expressed description of the advantageof the trial judge, not just in seeing the witnesses, but in relating the oral evidence to the documentary evidence in the whole procesof the conduct of the trial athe evidence unfolds.

137    The importance of the reasonof Gleeson CJ, Gaudron J and Hayne J in Coal and Allied Operations, at least for present purposes, ithat they expressed with clarity what wawithin CDJ v VAJ (1998) 197 CLR 172 at 201–202 [111] per McHugh, Gummow and Callinan JJ and re-expressed what had been said with equal clarity by Gaudron, McHugh, Gummow and Hayne JJ in Allesch v Maunz (2000) 203 CLR 172 at 180 [22]–[23] that the statutory provisionproviding for the exercise of appellate powerafter an appeal by way of rehearing were to be construed afor the correction of error.

138    The importance of the reasonof Gleeson CJ, Gummow J and Kirby J in Fox v Percy ithat they expressed and reconciled the important featureof an appeal by way of rehearing: That it ia real review looking at the whole of the record, but it iconducted within the constraintmarked out by the appellate procesand the advantageof the trial judge, including the evaluation of a witness’credibility having seen and heard the person at trial, and the advantage of seeing the evidence unfold during the trial and over a period of time, and that itpurpose ithe correction of error. That reconciliation, to be found in particular at 214 CLR 127 [27], involved, importantly, the recognition that the advantageof the trial judge do not derogate from the obligation of the appeal court to conduct a real review by way of rehearing according for the purpose of correction of error. If, from thireview, and after making due allowance for the advantageof the trial judge, the appeal court concludethat an error habeen shown, effect must be given to that conclusion.

139    From time to time, Full Courtof the Court must expresthe relevant principlein their reasonso ato reveal that they have taken the correct approach to their task undertaking an appeal. Thidoenot require, however, that in so expressing the principleFull Courtdo so in language not drawn from the governing High Court caseor from long-established expressionof principle by earlier Full Courts. Indeed, re-expression in different language runthe risk of unnecessary confusion and conflict in precedent in the Court. Thitendency and the riskinvolved were referred to in the reasonof Allsop CJ and Perram J in Aldi Food261 FCR at 307–309 [4]–[10] and 317–318 [52]–[53] in discussing the expression of principle in Branir Pty Ltd v Owston Nominee(No 2) Pty Ltd [2001] FCA 1833; 117 FCR 424 (Branir) at 432–438 [11]–[32], which habeen repeatedly followed and applied in thiCourt and in other intermediate appellate courtfor over twenty years. In that case (Branir), the detailed review of principle waundertaken in the context of the then recent difficultieexpressed about earlier Full Court reasoning (upon which doubthad been cast) that an appeal to thiCourt waan appeal “stricto sensu”, and not truly by way of rehearing. The view of the Court in Branir wathat previouauthority such aDuralla Pty Ltd v Plant (1984) 2 FCR 342 (which had been followed up to 2000) that the appeal waone of error “stricto sensu” and not truly by way of rehearing, wawrong and should not be followed: see especially Branir 117 FCR at 432–435 [11]–[20]. That conclusion, however, did (and does) not make error of the primary judge below irrelevant. On the contrary, the rehearing, that ithe real review of the evidence, must be engaged in with a view to divining whether relevant findingreveal error: Coal and Allied Operation203 CLR at 203–204 [14]; see also Fox v Percy at 214 CLR 127–128 [27] and the other referencein Branir 117 FCR at 435 [22] (though the referencein the FCR report of Branir at [22] are wrong: the correct page reference to CDJ v VAJ i“201–202” and the correct reference to Allesch v Maunz ionly “180 [22]–[23]”). The reasonin Branir then discussed the nature of error in different kindof caseand factual decisions, including intellectual property and other caseinvolving evaluative impression: cf Aldi Food261 FCR at 307–309 [5]–[10], 316–318 [43]–[54] and 346 [169]. Within that discussion one findguidance ato the contextual nature of the approach to assessing error in any particular case: 117 FCR at 435–436 [24]–[25], and the proper weight or respect to be given to the trial judge’viewand the advantageof the trial judge, including, but not limited to, seeing the witnessewhere credibility or reliability ian issue: 117 FCR 436–438 [25]–[29]. Amade clear in that discussion, and aiclear from Warren v Coombeand Fox v Percy, error may be demonstrated, after due regard for and respect ipaid to, the advantageand viewof the trial judge, by a different conclusion by the appeal court ato the relevant fact or question. Error inot limited to showing why or how the trial judge erred in the procesor approach that wataken; error may be concluded from the difference in view of the appeal court ato the conclusion in issue.

140    Here, the relevant guiding principleare most clearly drawn from Earthline, Fox v Percy and Lee v Lee, assisted by certain paragraphof the reasonof GibbACJ, JacobJ and Murphy J in Warren v Coombethat adopt what JacobJ had said aPresident of the Court of Appeal in Cashman v Kinnear [1973] 2 NSWLR 495 at 498–499, 499–500 and 509.

141    Awe have observed, the primary judge made a number of findingof fact based in whole or in part upon a conclusion of the lack of credibility and lack of honesty of MrFrigger in her evidence. Such are finding(whether primary findingor secondary findingbased on a combination of impressionabout the credibility or reliability of witnesseand other inferencefrom primary facts: Lee v Lee 266 CLR at 148–149 [55]) that must, to be reversed, be shown to be contrary to “incontrovertible factor uncontested testimony” or be shown to be “glaringly improbable” or “contrary to compelling inferences”, being, athey were, findingaffected by impressionabout the credibility and reliability of MrFrigger aa result of seeing and hearing her give her evidence: Fox v Percy 214 CLR at 128 [28]–[29] and Lee v Lee 226 CLR at 148 [55].

142    That wanot, however, the only advantage of the primary judge. In an important passage in Earthline, Kirby J explained the advantages, subtle but real, of a trial judge hearing a long case and being able to assesand place all the evidence in itcontext ait unfoldand awitnesse(truthful, reliable, or not) deal with it. The passageat 160 ALR 619–620 [89]–[91] are worthy of repetition in full:

[89]    None of the foregoing consideration[being Kirby J’review in [87]–[88] of the many changeto the appeal function and the increasing modern scepticism ato appearance and demeanour aaidto identify the truth] alone requirethe abandonment of the respect which appellate courts, by present legal authority, must pay to the advantageenjoyed by the trial judge. Instead, they require renewed attention to precisely what the advantageare which the trial judge haover those enjoyed by the appellate court, conducting a second look at the facts, usually with more opportunity to evaluate particular factthan ipossible in the midst of a trial and with the appellate advantage of viewing such factin the context of the record of the complete trial hearing.

[90]    The true advantagein fact-finding which the trial judge enjoyinclude the fact that the judge hearthe evidence in itentirety whereathe appellate court itypically taken to selected passages, chosen by the partieso ato advance their respective arguments. The trial judge hearand seeall of the evidence. The evidence igenerally presented in a reasonably logical context. It unfolds, usually with a measure of chronological order, ait igiven in testimony or tendered in documentary or electronic form. During the trial and adjournments, the judge hathe opportunity to reflect on the evidence and to weigh particular elementagainst the rest of the evidence while the latter istill fresh in mind. A busy appellate court may not have the time or opportunity to read the entire transcript and all of the exhibits. Ait seemto me, these are the real reasonfor caution on the part of an appellate court where it inclineto conclusionon factual matterdifferent from those reached by the trial judge. These considerationacquire added force where, ain the present case, the trial waa very long one, the exhibitare most numerous, the issueare multiple and the oral and written submissionwere detailed and protracted. In such cases, the reasongiven by the trial judge, however conscientiouhe or she may be, may omit attention to peripheral issues. They are designed to explain conclusionto which the judge habeen driven by the overall impressionand considerations, some of which may, quite properly, not be expressly specified.

[91]    All of the foregoing considerationleave to be weighed, in some caseat least, the impression which the trial judge holdof a particular witness, perhapinfluenced by the witness’ demeanour and the kindof considerationcommonly referred to such ahesitation or displayof partisanship not readily conveyed, or conveyed at all, by the printed record. One can hold different viewabout whether such considerationshould intrude in the assessment of qualified expert witnesses. One can strive to minimise resort to such considerationin the case of lay witnesses, out of recognition of the fallibility of human assessment of credibility from appearances. But because trialremain public procedurefor the resolution of disputes, it iinescapable that, in some caseat least, credibility assessmentwill be required where there ino documentary, electronic or other incontrovertible evidence to resolve the conflict presented for decision. In such caseit will remain the fact that, try ait might, the appellate court cannot procure from the printed record exactly the same materialon which to base the judicial decision athe trial judge had.

143    These paragraphwere expressly approved by Gleeson CJ, Gummow J and Kirby J in Fox v Percy 214 CLR at 125–126 [23]:

The foregoing procedure shapethe requirements, and limitations, of such an appeal. On the one hand, the appellate court iobliged to “give the judgment which in itopinion ought to have been given in the first instance” [citing Dearman v Dearman (1908) 7 CLR 549 at 561]. On the other, it must, of necessity, observe the “natural limitations” that exitin the case of any appellate court proceeding wholly or substantially on the record [citing Dearman v Dearman (1908) 7 CLR 549 at 561. See also Scott v Pauly (1917) 24 CLR 274 at 278–281]. These limitationinclude the disadvantage that the appellate court hawhen compared with the trial judge in respect of the evaluation of witnesses’ credibility and of the “feeling” of a case which an appellate court, reading the transcript, cannot alwayfully share [citing Maynard v West MidlandRegional Health Authority [1984] 1 WLR 634 at 637; [1985] 1 All ER 635 at 637 per Lord Scarman with reference to Joyce v Yeoman[1981] 1 WLR 549 at 556; [1981] 2 All ER 21 at 26. See also Chamberv Jobling (1986) 7 NSWLR 1 at 25]. Furthermore, the appellate court doenot typically get taken to, or read, all of the evidence taken at the trial. Commonly, the trial judge therefore haadvantagethat derive from the obligation at trial to receive and consider the entirety of the evidence and the opportunity, normally over a longer interval, to reflect upon that evidence and to draw conclusionfrom it, viewed aa whole [citing State Rail Authority (NSW) v Earthline ConstructionPty Ltd (in liq) (1999) 160 ALR 588 at 619–620 [89]–[91]; 73 ALJR at 330 citing Lend Lease Development Pty Ltd v Zemlicka (1985) 3 NSWLR 207 at 209–10; Jonev R (1997) 191 CLR 439 at 466–467; 149 ALR 598 at 619–620].

(Footnoteand citationincluded.)

See also the discussion of findingbased on credibility in the reasonof Gaudron, Gummow and Hayne JJ in Earthline 160 ALR at 589–590 [3]–[4] and 607 [63].

144    The discussion by Kirby J at [90] of Earthline, expressly adopted by Gleeson CJ, Gummow J and Kirby J in Fox v Percy, expressewell what the primary judge’approach and advantage wain thicase: During and after many dayof hearing at the trial, which occurred after a background of extended pre-trial consideration of the issueand likely evidence, hiHonour, with the advantage of the evidence unfolding before him, conducted a careful examination of the oral testimony, with itdifficulties, against a shifting body of arguments, with a masof documentsometimecontradictory or inconsistent, sometimeexplained by the oral evidence (of varying reliability), and revealing, ultimately, in the context of all the evidence, no sure evidentiary footing. In thibody of evidence, the primary judge had the advantage, over time, during and after the trial, of relating the documentand the oral evidence together, and evaluating their overall effect in the discharge of the onuof proof. Such doenot absolve the Court of the obligation to examine all the material in a full review by way of rehearing, but it revealwhy we must give respect to the findingof the primary judge, not just those based directly on seeing and hearing MrFrigger’evidence, in evaluating the findingin question and in reaching the answer to the question whether the onuof proof wadischarged at relevant pointin the analysis.

145    The ultimate task waexpressed by Gleeson CJ, Gummow J and Kirby J in Fox v Percy 214 CLR at 126–127 [25]:

Within the constraintmarked out by the nature of the appellate process, the appellate court iobliged to conduct a real review of the trial and, in casewhere the trial waconducted before a judge sitting alone, of that judge’reasons. Appellate courtare not excused from the task of “weighing conflicting evidence and drawing [their] own inferenceand conclusions, though [they] should alwaybear in mind that [they have] neither seen nor heard the witnesses, and should make due allowance in thirespect.” In Warren v Coombes, the majority of thicourt reiterated the rule that:

‘In general an appellate court iin agood a position athe trial judge to decide on the proper inference to be drawn from factwhich are undisputed or which, having been disputed, are established by the findingof the trial judge. In deciding what ithe proper inference to be drawn, the appellate court will give respect and weight to the conclusion of the trial judge but, once having reached itown conclusion, will not shrink from giving effect to it.’

Athicourt there said, that approach wa“not only sound in law, but beneficial in … operation.”

See also Lee v Lee 266 CLR at 149 [55].

146    The contentof the paragraph from Warren v Coombe142 CLR at 551 cited above by Gleeson CJ, Gummow J and Kirby J in Fox v Percy awell athe notion of respect and weight being given to the conclusion of the trial judge to which reference wabeing made, are illuminated in understanding and meaning by a reading of what JacobP (ahis Honour then was) said in the New South WaleCourt of Appeal in Cashman v Kinnear [1973] 2 NSWLR 495 at 498–499, 499–500 and 509 that waset out in full in the reasonof GibbACJ, JacobJ and Murphy J in Warren v Coombe142 CLR 549–550, not long before the passage at 142 CLR 551 in the discussion leading up to that passage. The importance of these passageithat they reinforce what GibbACJ, JacobJ and Murphy J said in Warren v Coombes, which underpinthe expression of principle by Gleeson CJ, Gummow J and Kirby J in Fox v Percy and by Bell, Gageler, Nettle and Edelman JJ in Lee v Lee, that the giving of weight and respect to the conclusion of the trial judge and recognising any advantage of the trial judge idone apart of the assessment of the appeal court’own views. Branir 117 FCR at 437–438 [29]–[30] ito be understood in that light: see Aldi Food261 FCR at 308–309 [7]–[10] and 316–318 [47]–[53]. The passageof JacobP in Cashman v Kinnear were afollows:

[At 498–499] Even though a finding of negligence waopen on the evidence, the question still remainwhether the conclusion of the trial judge that there wanegligence waright or wrong. If I finally reach the conclusion that it waright, the appeal fails. If I finally reach the conclusion that it wawrong, then in my view the appeal succeeds. No ‘judicial restraint’ should lead me, on an appeal to which the statutory provisionof the Law Reform (MiscellaneouProvisions) Act 1965, apply, to refrain from giving effect to that conclusion of fact to which I finally come. It seemto me, though I speak with some diffidence and with great respect, that the only stage at which ‘judicial restraint’ can properly be exercised iupon the initial question whether or not I should arrive at a different conclusion from that of the trial judge. If I apply that restraint, ait habeen expressed in many decisionof the House of Lords, the Privy Council and the High Court, I would give great weight to the conclusionof a trial judge. In casewhere the credibility of witnesseiinvolved the weight iso great that an appellant who seekto overturn findingof factso based facean almost, but not quite, insuperable task. But even in caseof the latter category the weight of the trial judge’conclusion ivery great. Even if I am inclined to a different view it ilikely that the weight of the trial judge’view will outweigh that inclination. If, however, on final balance it doenot, then I am bound to say that the conclusion of the trial judge iwrong.

[At 499–500] Thuif by judicial restraint imeant the lack of overweening certainty in one’own opinionso that respect and weight igiven to the opinion of the judge below, then it ialwaysomething to be sought. The effect of that respect and weight will vary depending upon the subject matter and will be greatest when the case involvea discretionary judgment and next where the subject matter ione of conclusion or evaluation drawn or made from the factfound. But, in truth, thiquality of respect must be all pervading whether the subject be fact or law. However, if it be suggested that by judicial restraint a judge exercising hioffice under the Supreme Court Act 1970, and itpredecessorshould restrain himself from giving effect to hiown conclusion once he has, after applying to himself the mental restraint which flowby the proceswhich I have described, finally reached that conclusion then it iin my view a suggestion contrary to that Act and itpredecessorand I do not think that it should be adopted in the absence of a clear authority binding thicourt.

[At 509] I, therefore, return to the facts, consciouthat I must reach my own conclusion upon them, but at the same time obliged and willing to give great weight to the conclusion of the trial judge.

147    To the extent that one may find advantage in recourse to the judgmentof thiCourt in explication of these principles, in particular in, but not limited to, intellectual property cases, the consistent expression of principle in Branir 117 FCR at 432–438 [11]–[32] and Aldi Food261 FCR at 306–309 [2]–[10], 316–318 [43]–[53] and 346 [169] that were built and expressed upon Warren v Coombes, Earthline, Coal and Allied Operationand (in respect of Aldi Foods) Fox v Percy, are available.

The order in which we deal with the groundof appeal

148    The groundof appeal were summarised at [2] above. It iappropriate to explain the order in which we propose to deal with them. We begin with ground 9, because if ground 9 succeeds, the orderof the primary judge must be set aside and the matter re-heard by another judge. For the reasonthat follow, ground 9 should fail. It is, nevertheless, still appropriate to begin with ground 9, because it assistin elucidating circumstancerelevant to the disposition of the appeal. Awill be seen, the primary judge afforded the appellantprocedural fairnesat trial. The learned primary judge also, on a number of occasions, explained the onuof proof to the appellantand important matterfor them to addresin seeking to discharge that onus, an onuthat the appellantfailed to discharge both below and on appeal. In that context, of the primary judge not only not being unfair, but making clear what the appellanthad to prove, we then addresthe groundconcerning the disputed assets, ground2–5, upon which the appellantbore the onuof proof. We then deal with the remaining grounds, ground1 and 6–8.

Application to receive further evidence in the appeal

149    Before dealing with the groundof appeal it ifirst necessary to addresand explain our reasonfor the ordermade in respect of the appellants’ wide-ranging and extensive application for the Court to receive further evidence in the appeal.

150    The appellants’ application for the Court to receive further evidence on appeal wamade on 21 March 2022. The application wasupported by an affidavit of MrFrigger of 18 March 2022. On 4 April 2022, Feutrill J made orderto the effect that the application be heard at the same time athe appeal.

151    The Court haa discretion to receive further evidence in an appeal under 27 of the FCA Act and r 36.57 of the Rules. The applicable principleare well-established and may be shortly summarised afollows.

152    The power inot limited to ‘fresh’ evidence (i.e., evidence of which the applicant waunaware at the time of the original hearing and with reasonable diligence could not then have been obtained), but the exercise of the power iinformed by the principleapplicable in common law proceedingwith respect to the allowance of a motion for a new trial on the ground of discovery of fresh evidence. The power should be construed liberally, although it inot unfettered, and ito be exercised having regard to the subject matter, scope and purpose of 27 of the FCA Act. That includehaving regard to the overarching purpose of the civil practice and procedure provisiondescribed in 37M of the FCA Act. The discretion must be exercised judicially and 27 should not be construed in such a way ato obliterate the distinction between original and appellate jurisdiction. The principlegenerally mean the application should provide an explanation of the reasonfor failing to adduce the evidence at trial. But, the power iremedial. Thus, an important consideration in determining whether it should be exercised iwhether, if the further evidence had been available at the trial, it would have produced, or at least would be likely to have produced, a different result: see, e.g., CKT20 v Minister for Immigration, Citizenship, Migrant Serviceand Multicultural Affair[2022] FCAFC 124 at [32]–[34] and the authoritiethere cited.

153    In the exercise of the above principles, on 12 May 2022, the Court made certain orderrelating to receipt of the documentthe subject of the application apart of the appeal book in the appeal. The orderare appended aSchedule 1 to these reasons. What followare our reasonfor the orderof 12 May 2022, clarification of the purpose for which certain of the documentwere received in the appeal and an explanation of the extent to which we have considered and taken into account documentthat were provisionally received or rejected in the appeal.

154    Aa consequence of the orders, an aide memoire the respondent had provided to the primary judge and an aide memoire the appellanthad provided to the primary judge were received in the appeal. These were not received a‘further evidence’, but adocumentthat formed part of the submissionthe partiemade to the primary judge. Partof the transcript of the proceedingbefore the primary judge were also received on the appeal. Again, not a‘further evidence’, but apart of the record of proceedingbefore the primary judge.

155    The appellants’ interlocutory application dated 12 April 2021 for an order staying the delivery of the primary judge’judgment pending determination of the appellants’ application in WAD 66 of 2021 for annulment of the sequestration orderwaalso received on the appeal. An order of the Court dated 30 November 2021 in WAD 159 of 2021 refusing to stay the primary judge’order dismissing that application pending resolution of the appellants’ application for leave to appeal from that decision of the primary judge waalso received on the appeal. These documentwere received not a‘further evidence’, but acourt recordrelating to ground 1 of the re-amended notice of appeal which containa ground of appeal in which the appellantseek to challenge the primary judge’decision refusing to stay delivery of the judgement appealed. An affidavit of MrFrigger of 14 April 2021 waalso provisionally received on that basifor the purposeof ground 1.

156    Two other documentwere received in the appeal.

157    The first document ian audit report of the FSF for the financial year ended 30 June 2021 and dated 17 January 2022. That document i‘further evidence’ and it wareceived without objection from the respondent. It ian audit report relating to the financial statementof the FSF prepared for the financial year ended 30 June 2021. It wanot evidence that could have been available to be adduced at the trial because it wanot then in existence.

158    The appellantsubmitted that it demonstratethat the auditor provided an unqualified audit report for the FSF for the 2021 financial year and that the disputed assetremain assetof the FSF. No financial statementfor the 2021 financial year were in evidence before the primary judge and none waincluded in the application to receive further evidence on appeal. Further, the documentwere plainly prepared well after the sequestration orderwere made and the dispute between the partiecrystallised. In our view, while the document wareceived in the appeal, it iof no assistance in the resolution of the issuein the appeal.

159    The second document ian affidavit of MrFrigger of 17 September 2020. The purpose for which that document wareceived in the appeal became a matter of contention between the parties. The appellantand respondenteach filed further written submissionon the matter.

160    The ordermade on 12 May 2022 do not qualify the admission of the document into the appeal book. However, the intention of the Court wanot to receive the affidavit a‘further evidence’ in the appeal, but apart of the record of the proceedingbefore the primary judge for the purposeof determining the meritof ground 9 of the re-amended notice of appeal.

161    MrFrigger’affidavit of 17 September 2020 wasworn in support of the appellants’ unsuccessful second attempt to re-open their case before the primary judge. The primary judge’decision to refuse the appellants’ application to re-open to adduce the evidence in that affidavit ithe subject of ground 9 of the re-amended notice of appeal. Therefore, the affidavit irelevant to determining if and the extent to which the primary judge made any of the errorasserted in ground 9.

162    For the reasongiven shortly, the primary judge made no error in refusing the appellants’ second application to re-open. To the extent that the appellantalso pressed for receipt of the documentin the appeal a‘further evidence’ in support of ground2, 3, 4 and 5 of the re-amended notice of appeal, that application irefused. First, because it would circumvent the primary judge’ruling on re-opening which we consider wamade without error and obliterate the difference between appellate and original jurisdiction. Second, and in any event, for reasongiven when considering the meritof ground3 and 4, the documentif admitted into evidence would not likely have changed the outcome.

163    A number of other documentwere provisionally received or rejected, subject to relevance and hearing oral argument on the appeal. The orderwere made provisionally because it wanecessary to hear the oral argumenton the groundof appeal before finally determining the relevance and significance of the documentto the appellants’ groundof appeal. A number of other documentwere not pressed by the appellantand, therefore, these documentwere not received in the appeal.

164    Certain correspondence between the appellantand share registriewaprovisionally received in the appeal. Aexplained later in these reasons, the appellantcontend that the primary judge wain error for not finding that the appellanthad provided the share registriewith the TFN of the FSF before the sequestration orderwere made and that fact waevidence of an objective manifestation of an intention that the securitiewere to be held aassetof the FSF. However, these communicationdo not provide any evidence that the TFN of the FSF were provided to the share registriebefore the sequestration orderwere made. The communicationfrom Computershare and Boardroom merely confirm that certain securitieunder a particular HIN have a TFN quoted. The communicationdo not provide information about when these were quoted. On the face of them, these documentcould not have affected the outcome of the trial. Neither the appellants’ submissionnor MrFrigger’affidavit explain the relevance of the documentor manner in which it icontended they could have changed the outcome of the primary judge’judgment.

165    The appellantsubmit that these documentare necessary to refute imputationof seriouwrongdoing on their part that were the subject of the respondent’submissionwithout notice at the trial. The appellanthave not identified with any degree of specificity the asserted ‘seriouwrongdoing’ or the manner in which it iasserted that the allegationwere made without notice. Neither the appellants’ submissionnor MrFrigger’affidavit of 18 March 2022 explain the manner in which the documentare said to refute the unparticularised assertionof wrongdoing.

166    The appellantsubmit these documentare relevant to their submission that correspondence between the respondent and the share registrieshould not have been admitted into evidence under 138 of the Evidence Act. For the reasongiven shortly, there ino merit in that ground and these documentdo not assist to make that ground any more meritorious. Further, the manner in which these documentare relevant to that issue iunclear and unexplained in the appellants’ submissionand MrFrigger’affidavit in support.

167    Affidavitof MTrenfield of 16 September 2020 and 11 November 2020; affidavitof MrFrigger of 28 July 2020 (in part), 1 October 2020 and 27 October 2020; an affidavit of Mr Frigger of 27 October 2020; an affidavit of Mr Henry Newton of 11 November 2020; and an affidavit of Mr FrancoiCarleof 11 November 2020 were provisionally received in the appeal with respect to one or both of ground7 and 9 of the re-amended notice of appeal and subject to relevance and further oral argument.

168    Regarding the documentprovisionally received in the appeal, subject to relevance and oral argument, to the extent these documentwere referred to in the appellants’ written and oral submissionwe have considered and taken them into account. However, for the reasongiven later, none of them individually, collectively, or when taken with the evidence before the primary judge revealany error on the part of the primary judge.

169    Affidavitof MTrenfield of 28 April 2021 and 6 May 2021 were rejected (provisionally) a‘further evidence’ in the appeal subject to further oral argument on the appeal. No further submissionwere made with respect to the affidavit of 6 May 2021. Ato the affidavit of 28 April 2021, the appellantrelied on that affidavit in support of submissionto the effect that the primary judge should have found that the respondent invited a fraudulent proof of debt from Mr Vilensky, a fraudulent claim from Mr Kitay (the liquidator of Computer Accounting and Taxation Pty Ltd (CAT), a company associated with the Friggers and former trustee of the FSF) and determined that HAF waan unsecured creditor in the bankruptcy of the appellants. We confirm our view that the affidavit should be rejected and not received in the appeal. The assertionof fraud are unfounded and unsupported by evidence. Likewise, the assertion that HAF waan unsecured creditor iunsupported by evidence. Further, and in any event, the relevance of these assertionto ground 7 of the re-amended notice of appeal inot self-evident and wanot explained.

170    In sum, after hearing oral argument in the appeal, while the documentare of little or no real relevance to the appellants’ case in the appeal, we see no reason to change the provisional rulingmade regarding the receipt of documentin the appeal.

171    We now turn to consider ground 9.

Ground 9: alleged failure to provide procedural fairness

172    The appellantset out in the re-amended notice of appeal, filed on 15 June 2022, the variougroundon which they appeal the whole of the primary judgment. Ground 9 specifically allegethat the primary judge failed to provide the appellantwith procedural fairnesin case management and at trial. Ten sub-groundare listed in the re-amended notice of appeal, these are:

(a)     The appellantwere denied the right to know, and to be given an opportunity to respond, to the case presented against them;

(b)    The case management orderof 29 November 2019 (after [Frigger (No 1)] wadelivered on 24/10/19) informed the appellantwhat evidence warequired to prove the disputed assetwere held in FSF;

(c)    Notwithstanding that evidence waproduced by the appellants, the case against the appellantat trial (and in the appealed judgment) shifted to an indictment of the way the appellanthad managed their self-managed superannuation fund;

(d)    Allowed pejorative questioning of MrFrigger that wairrelevant to proving the disputed assetwere held in FSF;

(e)    Found that the respondent’false oral and sworn evidence wamerely an unwillingnesto concede a point to an antagonistic cross-examiner (MrFrigger);

(f)    Required the appellantto make ‘declarationof trust’ over BOQ1 and BOQ2 prior to the commencement of bankruptcy, in circumstancewhere those assetcame into existence after that date;

(g)    The allegation that the appellanthad waited until after the sequestration orderand then:

(i)    decided which assetwere superannuation assets,

(ii)    prepared and audited FSF financial statements,

(iii)    lodged annual returns

was first raised by the respondent in closing oral submissionafter the appellanthad closed their case;

(h)    The appellants’ application to re-open their case to adduce FSF income tax account transaction list 22-9-14 to 14-8-20, which list manifestly refutethe allegationin (g) above, wadismissed;

(i)    The respondent waallowed to adduce evidence which had been obtained by her in contravention of CorporationRegulation2001 and Bankruptcy Act:

(i)    information from share registrieregarding the [appellants’] wealth, waused by the respondent for a prescribed purpose contrary to CorporationRegulation 2C.1.03;

(ii)    information obtained from [CommSec] by falsely stating the Main Portfolio had vested in her, contrary to 58 (2) Bankruptcy Act 1966;

[(iii)]    information obtained from FSF external auditor by falsely stating she wacarrying out investigations, when in fact she wagathering evidence to impugn MrFrigger’credibility in WAD141/2019, contrary to 77A Bankruptcy Act 1966.

(j)    Delivered a judgment with numerouconcocted factand misconstrued pointof law irrelevant and inapplicable to the appellants’ case.

(Original emphasis.)

173    Each of these sub-groundwill be addressed in turn.

174    First, sub-ground(a) and (b) allege that the appellantwere denied the right to know, and to be given an opportunity to respond, to the case presented against them, and that the case management orderof 29 November 2019 only then informed the appellantof the evidence required to prove the disputed assetwere held in the FSF.

175    Asummarised above, Frigger (No 1) concerned an application for mandatory interlocutory injunctionagainst the first respondent. In dismissing the application and assessing the evidence in support of the interlocutory application, the primary judge made a number of relevant observations, namely:

(1)    HiHonour identified in Frigger (No 1) at [17] that to succeed in their application for final relief, the appellantwould need to establish that, at the commencement of their bankruptcy on 20 July 2018, the sharein 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;

(2)    HiHonour further noted at in Frigger (No 1) at [18] that to establish that all of the securitiewere held on trust for another person because they were held subject to the trustof the FSF, in the absence of evidence of an expresdeclaration of trust, that there needto be proof of an intention to create a trust, with certainty of subject matter and object, certainty ato the trustee and certainty of the personal obligation annexed to the property to hold it on the trustalleged;

(3)    In identifying uncertaintiein the evidence (in Frigger (No 1) at [43]), hiHonour noted that to succeed at trial, the appellantwould need to point to an objectively manifested intention on their part (or the part of any other relevant entity) that the sharewere to be held on trust for another person, which can be inferred from all the circumstance: in Frigger (No 1) at [44];

(4)    Ato the evidentiary uncertainties, hiHonour made the following acute observations:

(a)    The appellanthad not produced any direct evidence of any share registry having recorded the beneficial ownership of the sharein their record(at [45]);

(b)    The balance sheet for FSF waprepared by MrFrigger at an undisclosed time for an undisclosed purpose (at [46]);

(c)    There wano evidence ato why the registration of security interest by FSF over the sharein the Main Portfolio walodged and no context permitting any firm conclusionto be drawn from it (at [48]);

(d)    The appellanthad not adequately explained the circumstancein which the notation ‘Frigger Super Fund’ came to be fixed on the 2017–2018 financial statement for the Main Portfolio (at [49]);

(e)    The appellanthad not explained why none of the sharewere acquired in the name of HAF, but rather in the appellants’ name(at [50]); and

(f)    It waalso not clear why the sharethat were held at the time that the appellantwere replaced atrusteehave not been transferred into the name of the new trustee (at [51])

176    In light of the above, it can hardly be said that the appellantwere only advised of the evidence required in the orderof Frigger (No 2). It iapt to recall that the ordermade on 29 November 2019 were not for the purpose contended by the appellants; they were orderrequiring the appellantto provide particular discovery of documentverified by affidavit. Critically, the categorieof documentrequired to be discovered included a wide range of documents, such afinancial accounts, tax assessmentand tax lodgements. That is, the appellantwere to provide discovery of these categorieof documents. Importantly, the primary judge in hireasonin Frigger (No 2) repeated many of the observationato the state of the evidence noted in Frigger (No 1), being that it consisted of broad assertions, lacking detail or stated at a high level of generality. It wain thicontext that the orderfor discovery were made. HiHonour also made near identical commentato what the appellantwould need to establish to succeed in their application with respect to the BOQ1 and BOQ2 accounts, namely that, at the commencement of their bankruptcy, those accountneither belonged to, or were vested in them, or if they were, they were held on trust for another person: Frigger (No 2) at [15]. Furthermore, ahighlighted above, the second discovery ordermade on 25 June 2020, provided further clarification ato what documentthe appellantneeded to provide. Therefore, the primary judge was, in effect, identifying the proofwhich the appellantneeded to make good at trial.

177    Notwithstanding this, each of the relevant judgmentthat detailed what warequired of the appellantoccurred prior to the trial.

178    The appellantmust be taken to have been aware of the reasoning of the primary judge in Frigger (No 1) and Frigger (No 2). Each identified what the primary judge believed to be the gapin the evidence which had then been put on by the appellantand also identified the type of evidence that would be required for the appellantto satisfy the burden of proof at trial.

179    In these circumstances, we detect no error in the primary judge’reasoning nor do we in any way disagree with the conclusion. For these reasons, sub-ground(a) and (b) must be rejected.

180    Ato sub-ground (c), it wareadily apparent from the reading of the transcript and the reasonfor judgment in Frigger (No 1), Frigger (No 2) and the Liability Judgment that the appellantwere on notice of the case that waput against them by the respondent and of what they, the appellants, had to prove in relation to the relevant assets. There ino substance to the allegation in sub-ground (c) that “the case against the appellantat trial (and in the appealed judgment) shifted to an indictment of the way the appellanthad managed their self-managed super fund”. Accordingly, sub-ground (c) must be rejected.

181    Ato sub-ground (d), we do not accept that a fair reading of the transcript revealthat the cross-examination of MrFrigger consisted of pejorative questioning which wairrelevant to the issue of whether the disputed assetwere held in the FSF. Our detailed review of the transcript doenot disclose any basiwhich could provide a foundation to support sub-ground (d). For thireason, sub-ground (d) must also be rejected.

182    Further, ato sub-ground(a)–(d), in the appellants’ written and oral submissionin the appeal they contended that they had understood, at all timebefore the respondent filed her written submissionon 12 July 2020, that it wacommon ground and not in issue that the BW1 account (and the fundin it) waan asset of the FSF. Therefore, aregardthe appellants claim that the fundin the BOQ1 and BOQ2 accountwere assetof the FSF, the only question wawhether the fundin the BOQ1 and BOQ2 accountcould be traced to the BW1 account.

183    In substance, the appellants’ contended that the primary judge misunderstood the appellants’ case and what the appellantwere required to prove to demonstrate that the fundin the BOQ1 and BOQ2 accountwere assetof the FSF. It icontended that the error commenced in the primary judge’summary judgment decision in which, it isaid, the primary judge misunderstood what warequired to be proved. The appellants contended that the primary judge wain error, in effect, for asking the wrong question; the question wanot whether there ian objective manifestation that the BW1, BOQ1 or BOQ2 accountwere opened and intended to be assetof the FSF but, whether the fundin the BOQ1 and BOQ2 accountcould be traced to the fundin the BW1 account which were, said to be, unquestionably fundof the FSF.

184    In a similar manner, the appellantcontended that the question with respect to the Main Portfolio wanot whether there waan objective manifestation to open or hold each of the securitiein the CommSec account on trust for the FSF, but, rather whether the securitiein the Main Portfolio were acquired with fundthat were traceable to the BW1 account.

185    The appellantcontended that the trial judge’asserted misunderstanding of their case and misdirection on the questionto be determined resulted in the trial judge permitting MrFrigger to be cross-examined on issuethat were not relevant, specifically, the source of the depositinto and the reason for withdrawalfrom the BW1 account in circumstancein which the appellanthad not come prepared to verify each such transaction in the BW1 account because they had been led to believe that it wanot in dispute that the fundin that account were fundof the FSF.

186    We do not accept the appellants’ submission to the effect that they were taken by surprise when the respondent disputed and contested the issue of whether the BW1 account waan asset of the FSF at the trial.

187    MrTrenfield swore an affidavit, dated 11 September 2019, in opposition to the appellants’ summary judgment application in which she said that, in her view, there waa “need for further information and investigation in relation to the beneficial ownership of the property in [BOQ1] and [BOQ2] (or indeed in relation to any other assetthat are allegedly held on trust for the FSF)”. And, that she “had not yet formed a concluded view, in the absence of further information and investigation on whether … all the fundthat were held or are held in BW1 are trust fund… [or] … the underlying assetfrom which the fundwere obtained are trust assets”.

188    MrTrenfield, in an affidavit dated 22 May 2020 (and filed for the purposeof compliance with the primary judge’pre-trial orders) deposed to the following:

154.    Based on my review of the bank statementfor all of the accountidentified above, and based on the information contained in the spreadsheet prepared by Mr Bownesin paragraph 128 above, I believe that BW Account 1 wathe main operating account utilised by Mr and MrFrigger into which most income wainitially or eventually deposited (regardlesato whether the income wagenerated by a 'trust' asset or a personal asset) and the account from which most expensewere paid (regardlesof whether the expensewere personal or trust expenses).

155.    In stating my belief above, I am not intending to suggest that all the money deposited into BW Account 1 habeen derived from personal assets. I expresno opinion ato whether the following propertieare held on trust for the beneficiarieof the Frigger Super Fund:

(a)    Campbell Street, Hobart which I believe watenanted by Officeworks; and

(b)    [redacted by the Full Court] Edward Street, Perth which waalso tenanted.

156.    Further, I am not ignoring that there are, for example, some dividendor proceedof the sale of sharethat were deposited into the CDIA Account, CBA Smart AccesAccount or CBA NetBank Saver Account, and there ianother exception that I have noticed, which ia deposit into HSBC Account 2 on 13 October 2017 that note'Officeworks' in the transaction detailwhich I have assumed warent or some other payment required by Officeworkby reason of ittenancy of the Hobart property.

157    I have formed my belief ato the nature of the expensepaid from BW Account 1 based on the transaction descriptionfor the debitshown in the varioubank statementwhich include, for example:

(a)    regular Mastercard payments;

(b)    regular paymentto 'Synergy Retail';

(c)    rental payments;

(d)    Melville ratepayments;

(e)    payments to Jessica Frigger and Michael Frigger;

(f)    payments to lawyers, including Rowe Bristol whom I believe, based on the decision in Frigger v Rowe Bristol LawyerPty Ltd [2020] WASC 5, were retained by Mr and MrFrigger in several proceedings;

(g)    a payment labelled "security for costs";

(h)    unspecified transferof $20,000 on 30 July 2018, 31 July 2018, and 20 August 2018;

(i)    payments to TPG for internet; and

(j)    car registration fees.

189    After the respondent had filed MrTrenfield’affidavit of 22 May 2020, the appellantfiled a further responsive affidavit of MrFrigger dated 17 June 2020. That affidavit included aexhibit AF6 bank statementfor BW1 for the 2015 calendar year as to which MrFrigger stated at [20]: “[t]he statement containevidence of income of FSF trust estate for that calendar year”. The appellantalso filed their written opening submissiondated 28 June 2020 in which, amongst other things, ato the BOQ1 and BOQ2 accounts, they submitted that the respondent’defence in May 2020 wathe same defence in the June and August 2019 affidavits and that the respondent had no defence to the appellants’ claim.

190    The appellantalso applied for and were granted leave to further amend their originating application for the fourth time and filed an affidavit of MrFrigger dated 15 June 2020 in support of that application. The affidavit in support and the proposed amendmentmade no mention of any additional issueregarding the BW1 account or the source of itfundin the originating application or otherwise arising out of MTrenfield’affidavit of 22 May 2020.

191    Further, after the respondent had filed her written opening submissionof 12 July 2020, the appellantmade no complaint during their oral opening submission to the effect that the respondent had raised issuein her submissionor affidavit in opposition to the appellants’ originating application that had taken them by surprise or that they needed further time or an opportunity to addresissueraised in those documentof which they had not previously been aware or understood were in issue. In fact, the appellantacknowledged that the respondent disputed that the BW1 account waan asset of the FSF.

192    Moreover, in our view, the primary judge had made it quite clear in the reasonfor hidecision on the summary judgment application referred to above, that the appellantbore the onuof proving, amongst other things, that all the fundin the BW1 account were fundof the FSF if and to the extent the appellantcontended that fundin the BOQ1 and BOQ2 accountor securitiein the Main Portfolio were to be traced into fundthat originated in the BW1 account.

193    Sub-ground (e) seekto challenge the primary judge’assessment of the credibility of the first respondent. The primary judge in the Liability Judgment at [90][95] made hifindingwith respect to the credibility of the respondent. The primary judge acknowledged that MrFrigger’aim in cross-examination wato convince the Court that the respondent ia “thoroughgoing liar”: Liability Judgment at [93]. The primary judge acknowledged at [92] that there were occasionin which he did consider that the respondent could have been more forthcoming in her answers. On occasion, MrTrenfield became argumentative with the cross-examiner (that is, MrFrigger), and would only concede that “you can draw that conclusion from the documents”: Liability Judgment at [92]. The primary judge observed that it waunhelpful for the first respondent not to concede any point put by MrFrigger in cross-examination. The primary judge observed that thimay have been explicable by an unwillingnesto concede any point to a cross-examiner with whom MrTrenfield evidently haan antagonistic relationship. The primary judge in the Liability Judgment at [94] and [95] found:

[94]    For the most part MrTrenfield relied on documentary evidence and, in contrast to MrFrigger, there ino reason to doubt that the documentshe presented were what they appeared to be. To the extent that the applicant sought to impugn MrTrenfield’conduct aa basifor removing her atheir trustee in bankruptcy, the outcome depended more on an objective assessment of that conduct than on any finding about the credibility of her evidence.

[95]    So while I had concernthat some of MrTrenfield’answerin cross-examination were unhelpful, that did not affect my overall view about her evidence. I will need to refer below to further specific allegationof giving false evidence which the applicantmade against MrTrenfield. They are not made out. Generally, she presented in the witnesbox aan experienced professional who gave straightforward and forthright answerto a large number of questionwhich were not alwayvery relevant.

194    With the principleof appellate review that we set out earlier in mind, we have reviewed the transcript of the cross-examination of the respondent by MrFrigger. We detect no error in the primary judge’reasoning and we see no basito disagree with the primary judge’conclusionon the credibility of the respondent. For these reasonsub-ground (e) must be rejected. The importance of thiconclusion transcendthe procedural fairnesground. It underpinthe recognition that in a case in which the documentary basiof the appellants’ case waso unreliable and confused and which relied for itcontext upon the evidence of MrFrigger, there wagreat difficulty in discharging the onuof proof in circumstancewhere MrFrigger’honesty and credibility were not to be relied upon, especially in the field of reliability or context of documentgiven that she wafound to have fabricated evidence and Mr Frigger did not give evidence. We shall deal further in detail with credit findingin our reasonon ground25, below.

195    Ato sub-ground (f), there doenot appear to be any basion which the appellantcan assert their claim that the primary judge required the appellantto make “declarationof trust” over BOQ1 and BOQ2 prior to the commencement of bankruptcy, in circumstancewhere Mr and MrFrigger asserted those assetcame into existence after that date. The primary judge in Frigger (No 2), with respect to the appellants’ interlocutory application for summary judgment, identified that to succeed at trial, the appellantwould need to establish that, at the commencement of their bankruptcy, the BOQ1 and BOQ2 accounteither 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]. On the evidence, at the summary judgment application, the appellantalleged that thiwaestablished aa result of transactionby which the trustee exchanged other trust assetfor BOQ1 and BOQ2. The primary judge pointed out however that the appellantwould need evidence establishing that at the point when the fundfirst became subject to the trust, there waan objectively manifested intention to that effect: Frigger (No 2) at [17]. The primary judge critically observed that the extent to which the evidence adduced by the Friggerestablishethat BOQ1 and BOQ2 were FSF assetat the time of commencement of the bankruptcy would largely determine the appellants’ summary judgment application: Frigger (No 2) at [22]. The primary judge also drew attention to the fact that both BOQ1 and BOQ2 were in Mr Frigger’name: Frigger (No 2) at [15].

196    The primary judge noted, with respect to the FSF itself, the evidence adduced waagain “at a high level of generality”, stating that “documentof [certain contributions] or any specific evidence to establish that [these contributions] were transferred to the Friggerin their capacity atrustee of the FSF are absent from the affidavits: Frigger (No 2) at [26]. The primary judge in Frigger (No 2) identified, in detail, the gapin the evidence which resulted in the primary judge dismissing the appellants’ application for summary judgment. There ino basiin the primary judge’reasonin the Liability Judgment nor in the judgmentwhich preceded it being relevantly Frigger (No 1), Frigger (No 2), Frigger (No 7) and Frigger (No 8) to substantiate the appellants’ claim in sub-ground (f) that the primary judge required the appellantto make declarationof trust over BOQ1 and BOQ2 prior to the commencement of bankruptcy in order to succeed. We detect no error in the primary judge’reasoning nor we do we in any way disagree with the primary judge’findingin respect of BOQ1 and BOQ2. For these reasonsub-ground (f) must be rejected.

197    Sub-ground(g) and (h) are also not borne out by the primary judge’reasonfor rejecting an application to re-open the appellants’ case heard on 21 September 2020, and idealt with in the primary judgment. To repeat, the purpose for the re-opening application was:

(1)    to admit into evidence an account transaction list for the FSF which MrFrigger had obtained from the ATO BusinesPortal;

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

(3)    to recall MrFrigger aa witnesto respond to what she described a“numeroufalse allegationof substantial wrongdoing against the applicantwhich allegationeffectively amounted to tax fraud”.

198    With respect to sub-ground(g) and (h), there isimply no proper basiupon which these groundcan be asserted. The allegationwhich the appellantcomplained of during the re-opening application heard on 21 September 2020, and repeated in the appeal, were, again, substantially addressed in the primary judgment. Ahabeen canvassed in substantial detail above, the appellantwere well and truly on notice that whether the financial statementand annual returnwere reliable and the possibility that they were prepared after sequestration orderand so were unreliable, and the lack of any evidence ato when they were prepared or lodged, were all in issue. Anoted in the primary judgment, these issuewere first raised in Frigger (No 1), repeated in Frigger (No 2) and comprehensively addressed by the first respondent’written opening submissionfiled on 12 July 2020, all of which occurred before the trial took place. MrFrigger waalso cross-examined extensively on the date of preparation and reliability of the financial statementand annual returns. To now complain that they only became aware or appreciated that these evidentiary uncertaintiewere in issue following the first respondent’closing oral submissionsimply hano objective basis.

199    It ireadily apparent from a reading of the transcript of the trial, the respondent’written submissions, and the reasonfor judgment in Frigger (No 1), Frigger (No 2), and the Liability Judgment that the appellantwere on notice of the case that waput against them by the respondent. The appellantwere not ambushed in final addresain substance waalleged in ground 9. They were also on notice that it wafor them to show by evidence that the relevant property waat the time of bankruptcy part of the FSF.

200    Awaalso summarised above, the primary judge dismissed the 21 September 2020 application to re-open on the basithat the appellanthad been on notice about these issues, that the application did not fall within any of the four accepted categoriewhen re-opening isometimeallowed, nor wathere any other good reason why re-opening warequired: Liability Judgment at [266], [270]–[271]. The primary judge wawithin hipower to exercise hidiscretion to dismisthe application in light of these circumstances. We detect no error in the primary judge’reasoning nor do we in any way disagree with the conclusion. For these reasons, sub-ground(g) and (h) must be rejected.

201    Sub-ground (i) seekto re-agitate, on thiappeal, the appellants’ application to re-open the trial hearing in Frigger (No 7). It will be recalled from the summary above, that the application to re-open the trial hearing in Frigger (No 7) wafiled after the trial had ended and judgment wareserved. The purpose of the re-opening application wathat the appellantwanted the opportunity to object to partof and exhibitto certain affidavitthat had already been received into evidence, awell ato seek to adduce further evidence in support of those objectionand additional affidavitsworn by Mr Frigger and MrFrigger respectively. The appellantsubmitted, on the application to reopen, that information from share registries, CommSec and from FSF’external auditor had been improperly or unlawfully obtained in contravention of the CorporationRegulation2001 (Cth) (Corporations Regulations) and the Bankruptcy Act. The primary judge in Frigger (No 7) dismissed the application to re-open on the basithat the appellanthad failed to demonstrate any good reason to re-open the trial given that the partiehad already closed their cases, that Mr and MrFrigger and MrTrenfield were cross-examined on the basiof the evidence that had been admitted up to that point, and that judgment had been reserved: Frigger (No 7) at [26]. With respect to the claimed inability to object to the first respondent’evidence, the primary judge noted that the letterthe appellant referred to were all in evidence 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]. The primary judge further noted that the appellanthad alwaybeen “alive to their ability to allege impropriety against MrTrenfield on [the basithat MrTrenfield’letter of 28 August 2019 to CommSec waan ‘abuse’]”: Frigger (No 7) at [29]. The primary judge in Frigger (No 7) observed at [34] and [41] that the appellantdid not present clear evidence of seriouillegality or impropriety by another party which justified re-opening the matter. We detect no error in the primary judge’reasoning in Frigger (No 7) for rejecting the application to re-open the matter after the conclusion of the trial. Moreover, we agree with the primary judge’conclusion. It follows, that sub-ground (i) must be rejected.

202    Lastly, sub-ground (j) allegethat the primary judge delivered a judgment with numerouconcocted factand misconstrued pointof law irrelevant and inapplicable to the appellants’ case iscandalous, and misconceived. The appellantfailed to identify any of the supposed “numerouconcocted facts”. The appellantalso failed to identify what isaid to be “misconstrued pointof law irrelevant and inapplicable to the appellants’ case”. There iabsolutely no foundation provided upon which thisub-ground could possibly succeed. Accordingly, sub-ground (j) irejected.

203    Not only should ground 9 be dismissed, it can be stated with some confidence that Mr and MrFrigger, aintelligent people, in the light of all that wasaid to them and all that must have been apparent to them, must have understood that it wanecessary for them to adduce, and that they bore the onuof adducing, all available evidence to show that circumstanceexisted or actwere done to make all relevant property part of the FSF. They were not treated unfairly by the primary judge. They were treated completely fairly and they were apprised of what they had to do to prove their case, if the evidence existed.

Groundof appeal 2 to 5: the disputed assets

204    Groundof appeal 2–5 are substantially directed to challenging the findingmade by the primary judge in respect of the disputed assets. To put those findingin context, it inecessary to summarise the key featureof the superannuation system, including provisionof the SIS Act, the interaction between superannuation law and the law of trusts, and the principlegoverning when an asset will be treated a“contributed” to an existing superannuation fund.

Relevant aspectof the superannuation system, including the SIAct

205    The following ia broad overview of the relevant provisionof the SIAct, the Superannuation Industry (Superannuation) Regulation1994 (Cth) (SIRegulations), and the Income Tax Assessment Act 1997 (Cth) (ITAA 1997) athey apply to the FSF and the claimmade by the appellanton appeal.

206    It iimportant at the outset to note that the superannuation system in Australia inot purely concerned with private interests: In addition to providing for adequate levelof income in retirement for individualit ialso directed towardmeeting the public policy challengepresented by Australia’ageing population. The contourof the superannuation system have accordingly evolved over time in line with the prevailing economic climate and the policy objectiveof the government of the day. By way of illustration, the Howard Government reduced taxation rateor provided for tax-free arrangementfor certain fundto “improve incentiveto save, increase retirement incomes, and strengthen incentivefor older Australianto stay in the workforce”: see the Hon Peter Costello MP, Treasurer, Second Reading Speech, Tax LawAmendment (Simplified Superannuation) Bill 2006. Following the Global Financial Crisis, the Rudd Government introduced reformto support “the longer term sustainability of our pension system”, including lowering the concessional contributioncap, and temporarily reduced the matching rate of superannuation co-contribution: see the Hon Wayne Swan MP, Treasurer, Second Reading Speech, AppropriationBill (No. 1) 2009-10 ‘Budget Speech 2009-10’. Superannuation ithua highly regulated area of economic activity.

207    The prudent and transparent management of superannuation fundia matter of public concern and isubject to governmental oversight. The SIAct, together with the Superannuation Industry (Supervision) Consequential AmendmentAct 1993 (Cth), wadesigned to “give effect to measureto substantially increase the level of prudential protection provided to the superannuation industry, and represent a substantial strengthening of the security of superannuation savingand in protecting the rightof superannuation fund members”: see, the Parliament of the Commonwealth of Australia, Superannuation Industry (Supervision) Bill 1993, Explanatory Memorandum, 1.

208    These aimare reflected in the objectof the SIAct, which are relevantly described in 3 afollows:

Supervision of certain superannuation entities

(1)    The main object of thiAct ito make provision for the prudent management of certain superannuation funds, approved deposit fundand pooled superannuation trustand for their supervision by APRA, ASIC and the Commissioner of Taxation.

Basifor supervision

(2)    The basifor supervision ithat those fundand trustare subject to regulation under the Commonwealth’powerwith respect to corporationor pension(for example, because the trustee ia corporation). In return, the supervised fundand trust may become eligible for concessional taxation treatment.

209    Aievident from thidescription, favourable taxation treatment iintimately connected with the regulation and operation of superannuation funds. Relatedly, and of particular relevance to thiappeal, the legislative regime applicable to bankruptcy iprotective of a bankrupt’interest in a regulated superannuation fund.

210    Accordingly, management of one’personal superannuation fund haconsequencefor memberof the broader community: consequencefor taxation, and consequencefor creditors. Thicontext supportthe conclusion that the appellantmust be capable of pointing to objective actin the world that manifested their intention to hold the disputed assetin the FSF or other factwhich lead to the conclusion that assetare held within the FSF. A general assertion that the appellantsubjectively wished to benefit from favourable taxation treatment inot enough: apart from the fact that the rationality and contextual persuasivenesof that assertion ionly assessable with the benefit of the full context of the appellants’ financial position, the prescriptive and stringent regulationapplicable to superannuation fundand the consequencefor the community at large of an asset being held in a superannuation fund suggest that objective actand the requisite degree of clarity in drawing the relevant conclusion are required.

Regulated superannuation fundand self-managed superannuation funds

211    By 10 of the SIAct, the term “regulated superannuation fund” hathe meaning given by 19. In essence, the SIAct requirethat the superannuation fund haa trustee, that the sole or primary purpose of the fund ithe provision of old-age pensions, and that there must be an election by the trustee that the SIAct appliein relation to the fund.

212    A “regulated superannuation fund” may be a “self managed superannuation fund” (SMSF). By 10 of the SIAct, a self-managed superannuation fund meana fund adefined in 17A. The basal requirementof a SMSF where there imore than one member are afollows. First, a trust deed must be created which establishethe SMSF trust. While thiinot an explicit requirement stated in 17A, it must be a requirement by reason of the requirement for a trustee for a regulated superannuation fund in 10 of the SIAct. Secondly, a SMSF must not have more than four members: 17A(1)(a). Thirdly, all of the memberof the SMSF must be trusteeof the SMSF, or the SMSF must have a corporate trustee, of which all the membermust be a director: 17A(1)(b)(d).

213    There wano dispute on appeal that the FSF waa regulated SMSF within the meaning of the SIAct.

214    There are a number of record keeping and audit requirementfor SMSFin the SIAct, including:

(1)    Trusteemust keep and maintain accounting recordfor a minimum period of five year(35AE), such recordincluding a statement of financial position and an operating statement in respect of each income year (35B).

(2)    An approved SMSF auditor must be appointed each financial year to give the trustee a report, in the approved form, of the operationof the entity for that year (35C).

(3)    Trusteemust keep minuteof all meetingand retain the minutefor a minimum of ten year(103).

(4)    Trusteemust keep up to date recordof all trustee or director of corporate trustee changeand trustee consentfor a minimum of ten year(104).

(5)    Trusteewho become a trustee on or after 1 July 2007 must sign and retain a trustee declaration in respect of the SMSF (104A). Thideclaration ithat the trustee understandhior her dutieatrustee of the SMSF.

(6)    Trusteemust keep copieof all member or beneficiary reports, so long athey are relevant and in any event for at least ten year(105).

Superannuation law and the concept of “vesting” relied upon by the appellants

215    A critical element of the appellants’ case on appeal wathat the disputed assetformed part of their respective “allocated pensions”, which “vested” in the appellants, but were still said to form part of their interest in the FSF and therefore fell within the exception in 116(2)(d)(iii)(A) of the Bankruptcy Act.

216    By way of their submissionato vesting, Mr and MrFrigger contended that the primary judge misdirected himself ato the ultimate question that needed to be determined in respect of each of the disputed assetthe subject of groundof appeal 2, 3, 4 and 5 by wrongly (according to the appellants) focusing upon whether the disputed assetwere held on trust rather than whether the disputed assethad vested in them.

217    The appellantput their contentionato “vesting” in the following termin paragraph 3 of their written submissiondated 8 April 2022:

MrFrigger’member account balance vested in her on 1 July 2009 in the form of an allocated pension. Similarly, Mr Frigger commenced drawing an allocated pension on 1 July 2010 and himember account balance vested in him on that date. All assetin FSF trust estate were treated asegregated assetin each of Mr & MrFrigger’allocated pensions. Liquid assetwere split between each of the Friggers’ allocated pensions. The Friggerhad powers, dutieand control over their allocated pensionatrusteeand avested members

218    At paragraph6 and 7 of the appellants’ written submissionin reply dated 2 May 2022, thisubmission wafurther articulated afollows:

6    The trial judge erred at law by requiring FSF, a statutory trust, to bear all the indicia of a trust awould be recognized by a court of equity, by finding that the disputed assetwere required to be identified atrust assets, in circumstancewhere the disputed assethad fully vested in the appellantand were no longer subject to a prohibition not to be used for the legal owner’benefit: [JJ3, 25, 26, 30, 31, 32, 33, 34, 96, 97, 98, 99, 100-119, 120, 121, 122-125, 132, 134, 135, 141, 144, 145, 149, 150, 151, 152, 154, 155, 156, 159, 165, 167,281, 169, 171, 174, 176, 178, 186, 187, 193-196, 214, 215, 221, 223, 225, 248, 251, 333, 336, 337, 338, 341, 342, 343, 346, 347,352, 353, 354, 357]. The assetcomprising the appellants allocated pensionhad fully vested in the appellantwhen the allocated pensioncommenced, but FSF continueaa statutory superannuation fund for the purpose of concessional tax treatment, and requiretrusteeto be appointed to comply with the record-keeping and reporting obligationunder SIAct. The trial judge’error waconsequent on the respondent’opening submissionB.04 @ [4.1] “Formation of trusts”.

7    [RS4]: the respondent confuseappleand oranges. Withdrawing lump sumfrom a superannuation fund [JJ328], inot the same atransferring a member’account balance to an allocated pension. Jackson J erred in fact in Frigger v Trenfield [2019] FCA @ [42] he found that “Mr & MrFrigger are professional people at or approaching retirement age.”

219    Thiposition waadvanced in similar termat the hearing of this appeal (T51.1620), where MrFrigger, in response to a question from the Chief Justice, stated:

The only thing that I wasaying, your Honour, ithat I don’t believe that we had to say that the assetin the Frigger Super Fund which comprised our allocated pensionwere held on trust with the characteristic that the person, the legal owner, could not use it for itown benefit. That ithe – I think ithe differentiation between a simple discretionary fund trust and superannuation fund and we say in our case because we have reached preservation age our super fund had been transferred or converted into an allocated pension. We were the beneficial owners.

220    Given the reliance placed on the concept of “vesting”, it inecessary to explain that concept by reference to provisionof relevant legislation. Ultimately, however, it iunclear that the appellants’ argumentato vesting support their case in respect of the disputed assets.

Phaseand typeof superannuation benefits

221    There are two phasefor superannuation assets: an accumulation phase (also known athe “growth phase”) and a retirement phase. During the accumulation phase, all contributionare “preserved” or “quarantined” in that they cannot be accessed (subject to limited exceptions). Upon reaching what iknown athe “preservation age”, the retirement phase commenceand the consequence of that ithat “superannuation benefits” can be accrued and become payable.

222    The SIRegulationgovern when a person ideemed to have reached “preservation age”. Aboth Mr and MrFrigger were born before 1960, their preservation age wa55: reg 6.01(2) SIRegulations.

223    Once a person’preservation age habeen reached, in the retirement phase, fundcan be paid aa lump sum or transferred into a superannuation income stream known aa pension or annuity. A “pension” idefined in 10 of the SIAct to include a “benefit provided by a fund”, if the benefit itaken under the SIRegulationto be a pension for the purposeof the Act. Regulation 1.06 providethat a benefit itaken to be a pension where the superannuation fund under which it iprovided meetthe standardof sub-regulation (9A) and doenot permit the “capital supporting the pension to be added to by way of contribution or rollover after the pension icommenced.” Sub-regulation (9A) also requirethat a pension be paid at least annually, in accordance with the minimum amountstipulated by Sch 7 of the SIRegulations.

224    The SIRegulationalso enable a person who haattained their preservation age to receive superannuation benefitwithout retiring from their employment and entering the retirement phase by way of a “transition to retirement income stream”. An important feature of the transition to retirement income stream ithat (subject to certain conditions) the superannuation fund remainin the accumulation phase.

225    There are taxation consequenceassociated with moving from the accumulation phase to the retirement phase. Investment earningon assetin the retirement phase which constitute “exempt current pension income” are tax free: s295-380 and 295-385 of the ITAA 1997. By contrast, realised gainon investment earningin the accumulation phase are subject to a 15% capital gaintax (CGT), or 10% for assetheld for longer than 12 months: 295-85 of the ITAA 1997. To qualify for exemption from CGT liability, two typeof tax calculation can be applied. Relevantly for the present case, the segregated method requirethat the pension assets:

(1)    be “invested, held in reserve or otherwise dealt with at that time solely to enable the fund to discharge all or part of itliabilities … [in respect of] superannuation income stream benefitof the fund at that time”: 295-385(3)(a) and 4(a) of the ITAA 1997; and

(2)    either

(a)    an actuary’certificate iobtained for the relevant income year to the effect that the assetand earningexpected to be made would provide the amount required to discharge in full all or part of the fund’liabilitiein respect of superannuation income stream benefits: 295-385(3) of the ITAA 1997; or

(b)    the assetmeet the definition of a prescribed superannuation stream benefit in the ITAA Regulation1997 (Cth), which includean “allocated pension” within the meaning of the SIRegulations: reg 295-385.01(a)(i).

226    We make reference to the taxation consequenceassociated with the different phaseof superannuation because the appellantsought to support their claimregarding vesting and the payment of allocated pensionin part by reference to the desire to deal with their assetin a tax-effective way: see, for example, paragraph 5 of the appellants’ outline of submissionare-filed on 17 July 2022. In that regard, capimposed on superannuation contributionby taxation legislation are also relevant.

Capon contributions

227    There are limiton how much one can pay into a superannuation fund each financial year without incurring additional taxation liabilitieknown athe concessional (before tax) contributioncap and the non-concessional (after tax) contributioncap. The amount of each cap dependon one’personal circumstances, however, by way of illustration, the general concessional contribution cap from 1 July 2017 to 30 June 2021 wa$25,000 and the non-concessional contributioncap wa$100,000 [Australian Taxation Office, ‘Super contribution– too much can mean extra tax’, 15 December 2022]

228    If the concessional contributioncap iexceeded, the excesconcessional contributionamount iincluded in a person’assessable income and itaxed at the applicable marginal tax rate. If the non-concessional contributioncap iexceeded a person may be liable to pay tax on the excesat the highest marginal tax rate: see Div 291 and Div 292 of the ITAA 1997 and the Superannuation (ExcesNon-concessional ContributionTax) Act 2007 (Cth).

The transfer balance cap

229    From 1 July 2017, the Government introduced what iknown aa “transfer balance cap”, which ia cap on the capital value of any assetwhich may be transferred to a tax-free pension account: see Div 294 of the ITAA 1997. The transfer balance cap waoriginally $1.6 million but waincreased to $1.7 million on 1 July 2021. Any gainor losseon the pension account over time are not considered for the purpose of the cap, and therefore the account cannot be ‘topped up’ if investment losseresult in the amount in the pension account dropping below the transfer balance cap. The cap applieto the combined balance of all superannuation moniein the retirement phase.

230    To ensure the transfer balance cap inot exceeded, SMSFare required to keep a “transfer balance account” report and report to the ATO any transfer balance account event(i.e. debitor credits) to assetin the retirement phase.

231    Where assetin the retirement phase exceed the transfer balance cap, those assetmust either be commuted into a lump sum payment and paid out of the superannuation fund, or paid back into the retirement phase and therefore become subject to CGT treatment. In addition, if the transfer balance cap iexceeded, excestransfer balance tax must be paid: see 294-30 of the ITAA 1997 and 5 of the Superannuation (ExcesTransfer Balance Tax) Imposition Act 2016 (Cth).

Conclusionregarding the appellants’ submissionon “vesting”

232    There are a number of difficultiewith the appellants’ submissionato the alleged vesting of their allocated pensions.

233    First, the documentary evidence doenot appear sufficient to establish that the disputed assetin fact formed part of an allocated pension (or part of a transition to retirement income stream). Indeed, in the FSF Balance Sheet dated June 2017 at Appeal Book Pt C Tab 24.56, the Main Portfolio and the Residential Propertieare said to be “Accumulation Phase Assets” and are not in either of Mr or MrFrigger’“Allocated Pensions”.

234    Similarly, the FSF Balance Sheet dated June 2018 at Appeal Book Pt C Tab 24.58 recordthe BW1 account, the Main Portfolio, and the Residential Propertieabeing “Accumulation Phase Assets” and are not in the “Allocated Pension” of either Mr or MrFrigger.

235    Indeed, were the disputed assetpart of a pension account it would appear that Mr and MrFrigger would exceed the permitted transfer balance cap. It ialso possible that with a contribution alarge athe Residential Properties, Mr and MrFrigger would exceed the applicable capon contributionand therefore be liable to taxation at the highest marginal rate, anoted by the primary judge at [501] of the Liability Judgment.

236    It itherefore difficult to see how the appellants’ claimthat the disputed assetformed part of their “allocated pension” can be supported on the basiof the documentary evidence.

237    Secondly, it iunclear that the appellants’ argumentato vesting in fact assist the appellantor change the required analysiin respect of the disputed assetin any meaningful way. The appellantseem to contend that once a pension habeen allocated, there ia legal and/or beneficial vesting (we note in thiregard the appellants’ replacement of the word “beneficially” with “personally” throughout the re-amended notice of appeal dated 15 June 2022) of that asset in the recipient aan individual, and not in their capacity aa trustee of a regulated SMSF. For example, in paragraph 19.7 of the appellants’ submissionfiled 28 June 2022 the appellantcontend that:

There wano “trust” relationship over BOQ1 and BOQ2, the appellanthold their interestin possession atenants-in-common being the underlying assetof their allocated pensions; they are the legal and beneficial owners…

238    Whether thicontention isupported by the documentary evidence is, however, questionable given that, for example, the 2018 FSF balance sheet referred to above recordBOQ1 abeing an “Accumulation Phase Asset” and not in either Mr or MrFrigger’“Allocated Pension”.

239    Even if the appellants’ contention ato the vesting of pension assetin themselvepersonally icorrect, it may tend to undermine rather than support the appellants’ case, apointed out by the respondent in the respondent’submissiondated 4 July 2022:

if at the time of the appellants’ bankruptcy the disputed assetwere held by the appellants, legally and beneficially in their own right, free from any restraintimposed by any law or any trust instrument, then they were no longer ‘held in a regulated super fund’ for the purposeof 116(2)(d)(iii)(A) of the Bankruptcy Act and they vest in the first respondent atrustee in bankruptcy.

240    Alternatively, if the disputed assetdespite being “fully vested” continued to form part of the FSF and accordingly were “held in a regulated super fund”, then the termof the FSF Trust Deed and principleof trust law are relevant in the determination of whether a disputed asset wain fact part of the FSF and no error may be discerned from the primary judge having regard to those principles. We therefore turn to the relationship between superannuation law and trust law.

The relationship between superannuation law and trust law

241    Despite the regulatory framework established by the SIAct and SIRegulations, the general law of trusthaa significant role to play in the regulation of superannuation funds. Thiibecause many superannuation fundcontinue to be constituted by way of a trust deed, with the result that the general law of trustapplieto them: see J D Heydon, Jacobs’ Law of Trusts in Australia (8th ed, LexiNexiButterworths, 2016) (Jacobs’ Law of Trusts) at [29-01]–[29-05]; Jones, Australian Superannuation Handbook (Thomson Reuters, 2021) at [5-100]; and G E Dal Pont, Equity and Trustin Australia (7th ed, Lawbook Co, 2019) at [28-50]. Athe High Court explained in Finch v Telstra (2010) 242 CLR 254 (at [35]):

Because of the potentially lengthy time periodover which superannuation savingare accumulated, it wanatural, and it inow in many instancemandatory, for a trust mechanism to be employed.

242    Anoted above, in the case of a “regulated superannuation fund” like the FSF it imandatory for a trust mechanism to be employed.

243    Consequently, except to the extent that provisionof the SIAct or SIRegulationor the termof a trust (permissibly) provide otherwise, the provisionof the SIAct co-exist with the general law of trustwith the result that the principlegoverning the creation of an exprestrust and contribution of property to an existing trust apply to regulated superannuation funds: see Cowan v Scargill [1985] Ch 270 at 290-292 (Megarry VC), which wacited with approval in Lock v Westpac Banking Corporation (1991) 25 NSWLR 593 at 609-610; Wilkinson v Clerical Administrative and Related EmployeeSuperannuation Pty Ltd (1998) 152 ALR 332 at 346 (Heerey J, Lockhart J agreeing); Jacobs’ Law of Trustat [29-01]–[29-05]; and Lord Browne-Wilkinson, “Equity and itRelevance to Superannuation SchemeToday” at p 28 in M Donald and L B Beatty (eds) The Evolving Role of Trust in Superannuation (The Federation Press, 2017).

244    Athe primary judge observed in the Liability Judgment at [97], it iorthodox to speak of three ‘certainties’ in the context of exprestrusts, each of which must be present for a trust to be found to exist. These are: (i) certainty of intention to create a trust; (ii) certainty of the property that ithe subject matter of the trust; and (iii) certainty of objects, that is, certainty ato whom the beneficiarieof the trust are: see Kauter v Hilton (1953) 90 CLR 86 (Kauter v Hilton) at 97 (Dixon CJ, Williams and Fullagar JJ); Associated Alloys Pty Limited v ACN 001 452 106 Pty Limited (in liquidation) [2000] HCA 25; 202 CLR 588 (Associated Alloys) at 604 [29] (Gaudron, McHugh, Gummow and Hayne JJ).

245    A central question in respect of appeal ground2, 3, 4 and 5 iwhether the disputed assetwere held in the FSF on trust for the beneficiarieof that fund and therefore, pursuant to 116(2)(d)(iii)(A) of the Bankruptcy Act are not assetdivisible among Mr and MrFrigger’creditors. Speaking in termof the ‘three certainties’, the controversy centreupon whether Mr and MrFrigger intended that the disputed assetbe contributed to and be held on trust in the FSF. Awe have said, on appeal, the appellantchallenged the way the primary judge framed thiaspect of the case below. We addresthe appellants’ argumentin detail at [335]–[344] and [526][537] below.

When will an asset be treated a“contributed” to a regulated superannuation fund?

246    In dealing with groundof appeal 2, 3, 4 and 5 it ihelpful to understand, in general terms, when an asset will be treated a“contributed” to a regulated superannuation fund. An asset may be treated acontributed to a superannuation fund if three thingare satisfied:

(1)    a person intended to contribute the asset to a superannuation fund; and

(2)    the asset in question icapable of being contributed to a superannuation fund; and

(3)    the person effected the contribution of the asset such that it iheld in the superannuation fund.

Intention to contribute an asset

247    The primary judge approached the question of intention to contribute property to an existing trust in reliance on principleapplicable to ascertaining whether intention to create a trust wapresent: see paragraph [105] of the Liability Judgment. Thiapproach isensible given that, anoted by the primary judge, in Australian law when property i‘contributed’ to an existing trust what in fact occurithat a new trust icreated over the property on the same termathe pre-existing trust, with the result that the property ito be dealt with in the same manner aany property already constituting the fund: Atwill v Commissioner of Stamp Dutie(NSW) (1970) 72 SR (NSW) 415 at 426 (Mason JA); Kennon v Spry [2008] HCA 56; 238 CLR 366 at [229] (Kiefel J); Aussiegolfa Pty Ltd (Trustee) v Commissioner of Taxation [2018] FCAFC 122; 264 FCR 587 at [195] (Steward J); see also, W A Lee et al, The Law of Trust(Thomson Reuters, 2022) at [2-501].

248    In general, the onuof proving an intention to create a trust liewith the person who claimthat the trust wacreated: see Re Armstrong (1960) VR 202 at 206; Herdegen v Federal Commissioner of Taxation (1988) 84 ALR 271 at 277 (Gummow J). Thiia matter which ito be assessed objectively, without having regard to the subjective intention of that person: Byrnev Kendle (2011) 243 CLR 253 (Byrnes v Kendle) at [17][18] (French CJ), [94], [104][105] and [114][116] (Heydon and Crennan JJ).

249    AMillett LJ put it in Twinsectra Ltd v Yardley [2002] 2 AC 164 (at 185) (which wacited with approval in Byrnev Kendle by Gummow and Hayne JJ at [55]):

A settlor must, of course, possesthe necessary intention to create a trust, but hisubjective intentionare irrelevant. If he enterinto arrangementwhich have the effect of creating a trust, it inot necessary that he should appreciate that they do so; it isufficient that he intendto enter them.

250    Consequently, where it iapparent from the circumstancethat a person haobjectively intended for property to be held on trust, that intention cannot be negated by an assertion that the person did not intend to bring about that result: see for example, Re Courtenay House Capital Trading Group Pty Ltd (in liq) [2018] NSWSC 404 (Re Courtenay House) at [23][26] and Markopoulov Marco [2020] WASC 79. The same may be said where a person assertthat they intended to create a trust, but such an intention cannot be discerned from the surrounding circumstances. In each case, it ia person’intention, ait appearobjectively, which will prevail. Thus, aProfessor Scott observed in the first edition of hitreatise, The Law of Trust(1st ed, 1939, volume 1) (Scott on Trusts) at §23:

An exprestrust, unlike a constructive trust, icreated only if the settlor properly manifestan intention to create a trust. It inot enough that he secretly intendto create a trust; there must be an outward expression of hiintention.

251    To speak of a certainty of intention itherefore to speak of the intention which ito be discerned from a person’wordor conduct. For thireason, later editionof Scott on Trusts speak of a “manifestation of intention” – that is, a person’intention ait iexpressed outwardly: see, for example: Scott, The Law of Trust(5th ed, 2006, volume 1) at §4.1; and see also, Jacobs’ Law of Trustat [5-02]. Thiterminology haalso been adopted by the courts. In Re Kayford Ltd (in Liq) [1975] 1 All ER 604, for example, Megarry J observed (at 607) that the relevant question iwhether in substance a sufficient intention to create a trust habeen manifested”. Similarly, in Legal ServiceBoard v Gillespie-Jone(2013) 249 CLR 493, Bell, Gageler and Keane JJ said (at [119]):

Whether or not partieintend to create in a third party that iappropriate to be created by a trust relationship fallin each case to be determined by reference to the outward manifestation of the intentions of the partiewithin the totality of the circumstances.

(Emphasiadded.)

See also, more recently: Bosanac v Commissioner of Taxation [2022] HCA 34 at [44] (Gageler J) and [93] (Gordon and Edelman JJ).

252    AGummow and Hayne JJ observed in Byrnev Kendle (at [56]), there igood sense in such a rule. Issueof the construction to be placed on the wordor actionof alleged settlorare apt to arise long after the event and, aithe case here, trustmay give rise to proprietary interestwhich engage third partiewho are strangerto the original actors.

253    These concernare especially apt in circumstancewhere the acceptance of an assertion that assetare held on trust may defeat the interestof creditorof the putative trustee: Korda v Australian Executor Trustee(SA) Ltd (2015) 255 CLR 62 (Korda) at [205] (Keane J); see also: Re Courtenay House at [19][20]. Therefore, although the Court may infer an intention to create a trust if thiiwarranted by the circumstances, it will not infer thiintention readily. Thiapproach coherewith that which wasaid by Mason CJ and Dawson J in Bahr v Nicolay (No 2) (1988) 164 CLR 604, where their Honourobserved (at 618) that, unlesan intention to create a trust iclearly to be collected from the language used and the circumstanceof the case, the Court ought not to be astute to discover indicationof that intention: see also, Byrnev Kendle at [272] (Gummow and Hayne JJ).

254    In undertaking thiinquiry, the Court may have regard to “all of the relevant circumstances”, including the language used by the parties, the nature of the transaction, and the circumstanceattending the relationship between them: Associated Alloyat 605; Kauter v Hilton at 100 (which wacited with approval in Byrnev Kendle at [54] by Gummow and Hayne JJ). Thican include conduct which haoccurred after the disposition of property and, in a commercial context, may also include commercial necessity: see, for conduct occurring after the disposition of property: Trustee of the Property of Cummins (a bankrupt) v Cummins [2006] HCA 6; 227 CLR 278 (Cummins v Cummins); In the matter of Tresdar Pty Ltd [2019] NSWSC 179 at [149][151]; see, for commercial necessity: Eslea HoldingLtd v Butt(1986) 6 NSWLR 175 at 18990; Trident General Insurance Co Ltd v McNiece BroPty Ltd (1988) 165 CLR 107 at 121 ( Mason CJ and Wilson J); Re Australian Elizabethan Theatre Trust; Lord v Commonwealth Bank of Australia (1991) 30 FCR 491 at 503 (Gummow J) and Korda at [10] (French CJ).

255    Importantly, however, the mere fact of commercial necessity or the convenience which may result from a finding that property iheld on trust will, absent other circumstances, generally be insufficient to evidence an intention to create a trust. Athe Court observed in Korda (at [11] (French CJ) and [204][208] (Keane J)), the context in which a legal arrangement imade inot a substitute for examining the precise language employed by the parties. That a trust structure may be commercially beneficial or indeed, necessary, doenot displace the need to establish an intention to create a trust. The relevant inquiry remainwhether, having regard to all of the circumstances, that intention hamanifested itself outwardly.

256    It followthat in the context of thiappeal, Mr and MrFrigger must demonstrate that, having regard to all of the relevant circumstances, they intended for the disputed assetto be held for the benefit of the beneficiarieof the FSF.

257    The above doenot mean, however, that if an asset ifound to be a trust asset or within a fund, natural accretionto, or the fruit generated by, it, such aby interest, rent or dividendmay not naturally, in all the circumstances, be concluded likewise to be trust property or part of the fund.

Nature of the asset sought to be contributed

258    Contributionto a regulated superannuation fund must comply with the SIAct and Part 7 of the SIRegulations. If a contribution doenot comply with the SIRegulations, the contribution which iin breach must be returned per reg 7.04(4). Contributionmust also comply with the termof the superannuation fund trust deed, which may have more restrictive requirementthan either the SIAct or SIRegulations.

259    The SIAct and SIRegulationimpose restrictionon the typeof contributionthat can be made to a superannuation fund. There are restrictionon acquiring assetfrom related partiewhich were important to the primary judge’consideration of whether the Residential Propertiewere capable of being legally contributed to the FSF. For the reasongiven later, we do not consider it necessary to resolve that issue in thiappeal.

Effecting the contribution of property to a superannuation fund

260    In the Liability Judgment at [131], the primary judge found that:

The concept of a ‘contribution’ ialso important here, aa superannuation fund imade up of contributions … The term iemployed frequently in the SIAct and SIRegulation(and the FSF Deed). The legislation imposedetailed restrictionon the kindof contributionthat a regulated superannuation fund may accept in relation to a member, but the restrictiononly apply after the member reachethe age of 65, which neither of the applicanthad by 1 July 2014. Other than that, a review of the SIAct disclosenothing that goespecifically to when an asset is, or inot, to be considered part of a regulated superannuation fund.

(Emphasiadded.)

261    In the absence of prescriptive requirementin the SIAct or SIRegulations, the ATO’Taxation Ruling 2010/1 entitled “Income tax: superannuation contributions” (Ruling) providesome guidance to trusteeof SMSF (and others) ato when an asset will be treated (at least by the ATO) ahaving been contributed to a superannuation fund. Although the Ruling waprepared for the purposeof administering taxation law, given that it iexpressed to be directly relevant to the SIAct and SIRegulations, and given the appellants’ reliance on other ATO ruling(for example, SMSFR 2009/1 at Appeal Book Pt 2SC 28.31), it iappropriate to have regard to the document, at least by way of contemporaneouguidance to the appellants. That is, the Ruling provides an indication of the kind of records that one would expect the appellants to have created, or to be in existence, if the disputed assets were ‘contributed’ to the FSF and provided the appellants with an indication of the kind of evidence that may prove such contributions were, in fact, made. However, we express no view on the accuracy of the guidance provided in the Ruling.

262    According to [4] of the Ruling, a contribution in the superannuation context i“anything of value that increasethe capital of a superannuation fund provided by a person whose purpose ito benefit one or more particular memberof the fund or all of the memberin general. According to [10]–[11], the capital of a superannuation fund might be increased directly by transferring fundto the superannuation provider, rolling over a superannuation benefit from another superannuation fund, transferring an existing asset to the superannuation provider or creating rightin the superannuation provider (an in specie contribution) or increasing the value of an existing asset held by the superannuation provider; or indirectly by paying an amount to a third party for the benefit of the superannuation provider, forgiving a debt owed by the superannuation provider or shifting value to an asset owned by the superannuation provider.

263    In the case of an electronic transfer of funds, the fundwill be treated acontributed when the fundare received by the superannuation provider such that the capital of the fund iactually increased or augmented: see [12]–[13] of the Ruling, see also Liwszyc v Commissioner of Taxation [2014] FCA 112; 218 FCR 334.

264    An in specie contribution imade when the superannuation provider obtainownership of the asset from the contributor. Where legal ownership ievidenced by a system of formal registration, such asharein a publicly listed company or TorrenSystem land, legal ownership will paswhen the superannuation provider iregistered athe owner, although beneficial ownership may be transferred earlier. A superannuation provider acquirethe beneficial ownership of real property when the provider obtainpossession of a properly executed transfer that iin registrable form together with any title deedand other documentnecessary to procure registration of the superannuation provider athe legal owner of the land. A superannuation provider acquirethe beneficial ownership of shareor unitin an Australian Stock Exchange listed company or unit trust when the provider obtaina properly executed off-market share transfer in registrable form: see [18][24] of the Ruling.

265    Paragraph 25 of the Ruling warnin respect of beneficial ownership that:

A contributor or superannuation provider who seekto argue a contribution of property occurwhen beneficial, not legal, ownership of property passemust retain sufficient evidence of the relevant transactionand eventto precisely identify when the change of beneficial ownership occurs.

266    It should also be noted that the trust deed itself may impose requirementato how assetare to be contributed to an existing trust.

267    With the above framework in mind, we turn to substantive consideration of groundof appeal 2–5.

Background to and issuein the ‘dispute’

268    Section 125 of the Bankruptcy Act provides:

125    Certain accountof undischarged bankrupt

(1)    Where a prescribed organization haascertained that a person having an account with it ian undischarged bankrupt, then, unlesthe prescribed organization isatisfied that the account ion behalf of some other person, it shall forthwith inform the trustee, in writing, of the existence of the account and, subject to subsection (2), shall not make any further paymentout of the account, except under an order of the Court of which a copy habeen served on it or in accordance with written instructionfrom the trustee.

(2)    If, within 1 month from the date on which the prescribed organization informed the trustee of the existence of the account, a copy of an order of the Court in respect of the account hanot been served on the prescribed organization and it hanot received written instructionfrom the trustee within that period in respect of the account, the prescribed organization ientitled to act without regard to any claim or right the trustee may have in respect of the account.

(3)    In thisection:

co-operative society means:

(a)    a society registered or incorporated aa co-operative housing society under a law of a State or Territory; or

(b)    any other society whose principal businesconsistof borrowing moneyfrom itmemberand lending those moneyto itmemberand that iregistered or incorporated under a law of a State or Territory relating to co-operative societies.

prescribed organization meana bank, a co-operative society or any other financial organization of a kind prescribed by the regulationfor the purposeof thidefinition.

...

269    BankWest and Bank of Queensland are prescribed organisationfor the purposeof the BW1, BOQ1 and BOQ2 accounts.

270    By letterdated 25 July 2018, the Official Trustee gave written instructionto BankWest and the Bank of Queensland that had the effect of preventing BankWest from making paymentout of the BW1 account and Bank of Queensland from making paymentout of the BOQ1 account under 125 of the Bankruptcy Act. The appellantcharacterise that circumstance athe Official Trustee ‘freezing’ these accounts. For ease of reference we are content to adopt that description.

271    On 26 July 2018, the Official Trustee lodged absolute caveatover the Residential Properties. The Official Trustee claimed an interest in the land on the basithat the estate of MrFrigger had vested in the Official Trustee under 58 of the Bankruptcy Act.

272    By letterdated 27 July 2018, the Official Trustee gave written instructionto BankWest to remove the stop or freeze on the BW1 account and to Bank of Queensland to remove the stop or freeze on the BOQ1.

273    A file note of MMichelle Tilke of the Official Trustee recordthat a decision to unfreeze bank accountat BankWest and Bank of Queensland had been made “abased on the information provided by MrFrigger it appearthat bank accountare for the superannuation fund”. Another file note of MTilke recordthat: “The bank account number ithe same athe bank account number disclosed on the annual return for the SMSF. Prima facie, it appearthe bank account ifor the SMSF despite being in personal names”.

274    The information MrFrigger provided to the Official Trustee included an email from MrFrigger to MTilke dated 27 July 2018 which attached three documents.

275    The first attachment ia document entitled “Account Details” for the BOQ1 account that ia print out of a webpage of website of the Bank of Queensland. The document includea description of the account name “Frigger Super Fund”. That appearto be a ‘nickname’ for that account that the appellantadded to the online banking platform in the manner described in the primary judge’reason(Liability Judgment at [338] and [724]).

276    The second attachment ia document entitled “Transaction Listing” for the BW1 account that ia print out of a webpage of the BankWest website. The document recordtransactionof the BW1 account from 26 June 2018 to 26 July 2018. In the body of the email MrFrigger indicatethat GST for the FSF ipaid from that account, all the income irent, dividendand interest that iearned by assetin the FSF and expenserelate to those assets. She also said that the appellantreceived an allocated pension from that account apaymentmade to their credit card.

277    The third attachment idigital version of a tax return of the FSF for the 2017 financial year. In the body of the email MrFrigger indicated that the tax return identified the BW1 account athe bank account of the FSF. The BW1 account wathe account nominated in the tax return for super paymentand tax refunds.

278    On 30 July 2018, Mr Maher Ty of the Official Trustee sent an email to Bank of Queensland with a written instruction to maintain the freeze on the BOQ1 and BOQ2 accountand to ignore the letter of 27 July 2019 instructing the bank to remove the freeze on those accounts.

279    On 31 August 2018, the respondent and Mr Paul Allen were appointed joint and several trusteeof the appellants’ estates. On the same day, they wrote to Bank of Queensland and, in effect, directed it to maintain the freeze on the BOQ1 and BOQ2 accounts. It icommon ground that neither the respondent nor Mr Allen at any time directed BankWest to re-freeze the BW1 account. MTrenfield gave evidence to the effect that no direction to freeze that account wamade because by the time of her appointment the balance walesthan $5,000. The primary judge accepted that explanation (Liability Judgment at [618]).

280    On 21 September 2018, the respondent and Mr Allen lodged an absolute caveat over, amongst other properties, the Bayswater and Como properties. They claimed an interest in the land aa consequence of MrFrigger’interest in that land vesting in them under 68 (sic) of the Bankruptcy Act.

281    Anoted above, on 12 March 2019, MrFrigger commenced proceedingin the Court by way of an originating processupported by an affidavit of hers. Insofar athe disputed assetare concerned, the originating application sought declarationto the effect that BOQ1 ian asset held by Mr Frigger on bare trust for the beneficiarie(members) of the FSF and that the Como and Bayswater propertiewere held by MrFrigger on bare trust for the beneficiarieof the FSF. The appellantalso sought an order, in effect, directing the respondent to remove the caveatshe had lodged over the Como and Bayswater properties.

282    On 14 June 2019, orderwere made to join Mr Frigger to the proceedingand to amend the originating application to include a claim for a declaration that BOQ2 waheld by MrFrigger on bare trust for the beneficiarieof the FSF.

283    By letter dated 28 August 2019, the respondent and Mr Allen represented to CommSec that the securitiein the Main Portfolio vested in the appellants’ trustee in bankruptcy and, amongst other things, requested CommSec to suspend all transactionon the CommSec account with effect from 28 August 2019. It icommon ground that CommSec acceded to the respondent’request. A screen shot of the CommSec website wain evidence indicating that the account walocked. The appellantcharacterise that letter ahaving the effect of freezing the Main Portfolio. Again, we are content to adopt that description athe effect of CommSec’response to the respondent’letter.

284    On 20 September 2019, the Court granted the appellantleave to further amend the originating application. Aa consequence of that order, the originating proceswaamended to include the appellants’ claim for an order directing the respondent to send a letter of retraction to CommSec.

285    The appellantwere not the trusteeof the FSF at all material times. Regarding the trustee(s) and memberof the FSF at different times, the primary judge made the following findingof fact (Liability Judgment at [196]) that were not challenged on appeal.

I make the following findingon the basiof the above evidence:

(1)    CAT waa trustee of the FSF from itinception in 1997 until its winding up in 2010.

(2)    MrFrigger and Mr Frigger were trusteeof the FSF from early 2008 until 21 July 2018, being the date on which MrFrigger said that the deed of amendment waexecuted (see further (4) below).

(3)    It inot possible to make a firm finding ato when Jessica Frigger and Michael Frigger first became trustees. AI have said, the 2008 deed of amendment in evidence doenot mention them, the purported 2014 minuteare not authentic (see below), and only the deed of amendment of 1 July 2018 terminating their trusteeship provideany firm evidence that they were trustees. MrFrigger'oral evidence that they were appointed in 2008, when they were minors, inot reliable. But despite the general unreliability of the ABR, I find that Jessica and Michael were trusteefrom at least the date shown on it, 6 July 2016. There wano reason to doubt the implication made in the deed of amendment dated 1 July 2018 that they were trusteeof the FSF at that time. If so, they must have been appointed at some time before 1 July 2018. Under 17A(1)(d) of the SIAct, each individual who ia member of an SMSF must also be a trustee of that fund, or a director of the fund'corporate trustee, if it ito meet the definition of an SMSF. Recordthat are reliable ato membership, such athe annual returnand membership statementindicate they were memberfrom well before 6 July 2016. Thimakeit inherently likely they were appointed trusteeby that time.

(4)    In point of fact, HAF wathe sole trustee from 21 July 2018 until 15 April 2020. HAF'appointment wapurportedly backdated to 1 July 2018 but there ino need in thiproceeding to determine what effect that had, if any. For the purposeof thijudgment, it iboth sufficient and correct to proceed on the basithat HAF wanot appointed in fact until 21 July 2018.

(5)    From 15 April 2020 until 5 June 2020, the applicantand both their children were trusteeof the FSF. Jessica and Michael ceased to be trusteeof the FSF on the latter date. The applicanthave been the only memberand the only trusteesince that date.

(6)    The applicanthave been memberof the FSF from itinception on 1 July 1997 and at all timethereafter.

(7)    Jessica Frigger and Michael Frigger were memberof the FSF from 1 January 2008 to 5 June 2020. While the evidence about the start and end dateof their membership inot substantial, there ino reason on the face of that evidence to doubt it: see the discussion of the member'statementabove and see Frigger (No 6) at [24] [25]. Those dateare inconsistent with the ABR search, but for the reasonI have given the ABR recordfor the FSF are not reliable.

286    The appellantcontinued to carry out transactionon the CommSec account after the sequestration orderwere made and up to the point at which CommSec suspended the account. That is, transactionwere performed on the account between 21 July 2018 and 28 August 2019 when CommSec suspended the account. In that period, HAF, not the appellants, wathe trustee of the FSF.

287    Another CommSec account had been opened by CAT (then named Serenity HoldingPty Ltd) apparently at the time when CAT watrustee of the FSF. That CommSec account had the account designation “SERENITY HOLDINGPTY LTD <FRIGGER SUPER FUND ACCOUNT>” aiusual for accountopened by a body corporate acting in a trustee capacity.

288    CAT waplaced into voluntary liquidation in December 2009. In January 2010, Mr Kitay waappointed provisional liquidator of CAT. In May 2010, an order wamade to wind CAT up in insolvency and Mr Kitay waappointed liquidator: Professional Serviceof Australia Pty Ltd v Computer Accounting and Tax Pty Ltd [2010] WASC 38; Professional Serviceof Australia Pty Ltd v Computer Accounting and Tax Pty Ltd (No 2) [2010] WASC 113; Professional Serviceof Australia Pty Ltd (administrator appointed) v Computer Accounting and Tax Pty Ltd (No 3) [2010] WASC 93. Notwithstanding that CAT wain liquidation and under the control of itliquidator, it appearthat Mr and MrFrigger continued to control and operate the CommSec account in CAT’former name of Serenity Holding(Liability Judgment at [399]–[402]).

289    A CommSec financial year summary for the 2015 financial year for the Serenity Holdingaccount indicatethat there were no securitieheld on that account aat 30 June 2015. A financial year summary for the 2019 financial year indicatethat a number of purchaseand salewere made on the Serenity Holdingaccount from 3 to 28 June 2019.

290    MrFrigger gave evidence during her cross-examination that there waa third CommSec account in the name of H & A Frigger. However, no documentassociated with such an account were tendered in evidence (Liability Judgment at [406]).

291    On 11 January 2019, an audit report for the FSF for the financial year ended 30 June 2016 wasigned on behalf of the auditor of the FSF. On 16 March 2019, an audit report for the FSF for the year ended 30 June 2017 wasigned. On 17 June 2019, an audit report for the FSF for the year ended 30 June 2018 wasigned.

292    The significance of the dateof these audit reportithat they pre-date the respondent’letter to CommSec of 28 August 2019 and the amendment to the originating application introducing the claim with respect to the Main Portfolio. Therefore, to the extent these documentrecord the Main Portfolio aan asset of the FSF they are not necessarily ‘self-serving’, in the sense that they may not have been prepared during or in contemplation of legal proceedingabout ownership of the Main Portfolio.

293    There are some further assetwhich the primary judge accepted were assetof the FSF. Those findingare not challenged on appeal, but it inecessary to briefly mention them because the appellantcontend that income and expenserelating to these assetpassed through the BW1 account atransactionof the FSF.

294    At the time when CAT watrustee of the FSF it became the registered proprietor of the Armadale property. There waa BP Service Station businesoperated on that land. Initially, CAT carried on the BP Service Station business. However, after changeto SMSF rules, ownership of the land waseparated from the business. Thereafter, the BP Service Station busineswacarried by the appellants, in their personal capacities, in partnership. The partnership leased the land from CAT and paid rent for the land.

295    During the 2016 financial year the Armadale property and BP Service Station busineswere sold. The sale wacompleted on 11 February 2016 when the balance of the proceedof the sale were evidently paid into the BW1 account. Thereafter, the Armadale property ceased to be an asset of the FSF. It wanot in issue on the appeal that the Armadale property had been an asset of the FSF and the BP Service Station busineshad been personal property of Mr and MrFrigger.

296    On 29 October 2014, the appellantacquired the Hobart property atrusteeof the FSF. It waleased to Officeworks. The Hobart property waan asset of the FSF. Rental income from Officeworkwapaid into the BW1 account. The Hobart property wasold in 2019 and the balance of the proceedof the sale were paid into the BW1 account on 29 May 2019. It wanot in issue in the appeal that the Hobart property had been an asset of the FSF.

297    We also make the observation that the BW1 account bank statementindicate that the purchaseon the Serenity HoldingCommSec account commenced a few dayafter the proceedfrom the sale of the Hobart property ($10,548,597.20) were evidently deposited into that bank account on 29 May 2019. That suggesta causal link between the sale of the Hobart property, aan asset of the FSF, and the acquisition of securitieon the Serenity HoldingCommSec account using the proceedfrom that sale aassetof the FSF. In the same period (i.e., after 3 June 2019) securitiecontinued to be purchased and sold on the CommSec account held in the personal nameof the Mr and MrFrigger (i.e., the Main Portfolio). The primary judge observed that use of the Serenity HoldingCommSec account, rather than the CommSec account held in the personal nameof Mr and MrFrigger for these purchasewanot satisfactorily explained by MrFrigger or by any other evidence (Liability Judgment at [394]–[398], [403]–[405]).

298    MrFrigger wathe registered proprietor of the Edward Street property which icommercial land leased to third parties. Rental income from that property wapaid into the BW1 account. It wanot in issue in the appeal that the Edward Street property waan asset of the FSF.

299    The respondent accepted and the primary judge found that many transactionrecorded in the bank statementof the BW1 account were transactionconcerning FSF assets. These were in the form of rent received from the Hobart property and Edward Street property. There were also paymentout of the account that appeared to be for expenseassociated with ownership or maintenance of those properties. Many transactionon the BW1 account also evidently relate to income, costand expenseof the Residential Properties. Other transactionare evidently dividendreceived from securitieheld in the Main Portfolio and saleand purchaseof securitiein the Main Portfolio.

300    There were many other transactionthat were not self-evidently transactionrelating to an asset accepted to be a FSF asset or a disputed asset. In respect of these transactions, the primary judge wanot satisfied that the transactionand fundrelating to them were FSF transactions. Therefore, he wanot satisfied that all fundpassing through the BW1 account were fundof the FSF. Accordingly, he wanot satisfied that BW1 waan account of the FSF (Liability Judgment at [329]–[332]).

301    The respondent accepted and the primary judge found that all the fundin the BOQ1 and BOQ2 accountwere derived from fundoriginally held in the BW1 account (Liability Judgment at [340]). Therefore, if all the fundin the BW1 account were FSF fundit would follow that all the fundin BOQ1 and BOQ2 would be of the same character unlesthese were paymentmade to the appellantapensionor lump sum paymentmade to them amemberof the FSF.

302    The consequence of the primary judge concluding that the evidence wanot sufficient to demonstrate that all transactionon the BW1 account were transactionof the FSF wathat he wanot satisfied that all fundin the BOQ1 and BOQ2 accountwere assetof the FSF (Liability Judgment at [347]).

303    Even if there were evidence by which it wademonstrated that non-self-explanatory transactionrecorded in the bank statement of the BW1 account relate to an asset accepted to be an asset of the FSF, or a disputed asset, or otherwise a transaction of the FSF, to demonstrate that all fundin BOQ1 and BOQ2 are fundof the FSF it would remain necessary to demonstrate that the Main Portfolio and Residential Propertieare also assetof the FSF. That ibecause many transactionon the BW1 account self-evidently relate to income, costand expenseof those assets. If they are not assetof the FSF, then clearly not all fundpassing through the BW1 account could have been FSF funds.

304    It followthat the key issuein the proceedingwere:

(1)    whether the evidence established that all transactionon the BW1 account were transactionof the FSF;

(2)    whether the evidence established that the Main Portfolio waan asset of the FSF; and

(3)    whether, the evidence established that the Residential Propertiewere contributed in specie aassetof the FSF.

Onuof proof

305    In the appellants’ originating application they sought to invoke the jurisdiction of the Court under 30 of the Bankruptcy Act, alternatively 90-15(3)(a) of Schedule 2 – Insolvency Practice Schedule (Bankruptcy) of that Act, alternatively 21 of the FCA Act athe source of the Court’power to grant the declarationand make the orderdirecting the respondent requested in the application. No question arisein thiappeal ato whether the Court hapower to make orderof the kind sought in the appellants’ originating application (aamended) under one or more of these provisions.

306    Section 90-15(3)(a) of the Bankruptcy Schedule iinvoked for the purposeof the appellants’ application to remove the respondent atheir trustee in bankruptcy. Section 30 of the Bankruptcy Act and 21 of the FCA Act are invoked in support of their applicationfor declaratory and orderin the nature of injunctive relief.

307    Section 30(1) of the Bankruptcy Act provides:

30    General powers of Courtin bankruptcy

(1)    The Court:

(a)    hafull 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 order(including declaratory orderand ordergranting injunctionor other equitable remedies) athe Court considernecessary for the purposeof carrying out or giving effect to thiAct in any such case or matter.

308    The power to make orderunder 30(1)(b) must be exercised for the purposeof carrying out or giving effect to the Bankruptcy Act in a particular case. Those purposeare to provide for “appropriation and equitable distribution of the assetof the insolvent debtor, and upon this, the debtor’release from future liability in respect of hior her existing debts. In line with these objectand the breadth of the language in 30(1), the provision inot to be construed narrowly. It extendto the grant of declaratory and injunctive relief to prevent the scheme of the Bankruptcy Act from being defeated: Coshott v Prentice [2014] FCAFC 88; 221 FCR 450 (Coshott v Prentice) at [92]–[94] (Siopis, Katzmann and Perry JJ).

309    Section 34A of the Bankruptcy Act provides:

34A    Standard of proof

(1)    Where, in proceedingin the Court (other than proceedingfor an offence), it inecessary, for a purpose relating to a matter arising under thiAct, to establish, or for the Court to be satisfied ato, a particular fact (including a contravention of thiAct), it isufficient if that fact iestablished, or the Court isatisfied ato that fact, athe case may be, on the balance of probabilities.

(2)    Subsection (1) haeffect except to the extent that thiAct expressly provideotherwise.

Thus, the appellantcarried the onuof proving the factupon which their claimfor declaratory and injunctive relief rested to the extent they relied on 30 of the Bankruptcy Act.

310    Section 21 of the FCA Act provides:

21    Declarationof right

(1)    The Court may, in civil proceedingin relation to a matter in which it haoriginal jurisdiction, make binding declarationof right, whether or not any consequential relief ior could be claimed.

(2)    A suit inot open to objection on the ground that a declaratory order only isought.

311    Section 140 of the Evidence Act provides:

140    Civil proceedings: standard of proof

(1)    In a civil proceeding, the court must find the case of a party proved if it isatisfied that the case habeen proved on the balance of probabilities.

(2)    Without limiting the matterthat the court may take into account in deciding whether it iso satisfied, it ito take into account:

(a)    the nature of the cause of action or defence; and

(b)    the nature of the subject matter of the proceeding; and

(c)    the gravity of the matteralleged.

312    A party that approachethe Court for declaratory relief bearthe onuof proving the factupon which that party reliefor the requested declaration: Hung v Warner, in the matter of Bellpac Pty Ltd (Receiverand ManagerAppointed) (In Liquidation) [2013] FCAFC 48 at [20][32]; see, also, Jonev Sutherland Shire Council (1979) 2 NSWLR 206 at 212; Blanch v British American Tobacco Australia ServiceLtd [2005] NSWSC 241; 62 NSWLR 653 at 655; Rosenbaum v Baidarman (No 2) [2021] NSWSC 574 at [291]. Likewise, a party that seekinjunctive relief must prove the factupon which the injunction isought. Therefore, the appellantcarried the onuof proving the factual foundation for their assertionthat the disputed assetwere assetof the FSF and, thereby, formed part of their interestin that fund for the purposeof s 116(2)(d)(ii)(A) of the Bankruptcy Act

313    The respondent made no cross-claim in the proceedingby which she sought, in effect, declaratory relief to the effect that the disputed assetvested in her athe trustee in bankruptcy of Mr and MrFrigger estateabankrupts. Or, that the disputed assetwere otherwise available for division amongst Mr and MrFriggers’ creditors. The respondent also did not defend the appellants’ claimin the proceedingon the footing that the disputed assethad vested in her. She simply required the appellantto prove the factual foundation for the relief sought in the originating application. That is, the respondent made no positive case in the proceedingand put the appellants to proof of theirs. That iunderstandable in circumstancein which the legal title to the disputed assetwaevidently held by Mr Frigger (BOQ1), MrFrigger (BOQ2, Como and Bayswater properties) and Mr and MrFrigger (Main Portfolio).

314    While in the context of applicationunder s120 and 121 of the Bankruptcy Act it iwell-established that the trustee in bankruptcy hathe overall burden of proving that the transaction ivoidable: see e.g., PT Garuda Indonesia Ltd v Grellman (1992) 35 FCR 515, a bankrupt (or other party asserting the claim) bearthe onuof proving that property inot beneficially owned by a bankrupt. In Coshott v Prentice in dismissing Mr Coshott’appeal from findingof the primary judge that a half interest in real property wanot held by Mr Coshott in trust for a superannuation fund, the Full Court, after setting out the reasonfor considering that there waan absence of evidence to support Mr Coshott’case, made the following observationwhich are apposite to thiappeal (at [80]–[82]).

[80]    We are reinforced in thiview by the fact that the onulay upon the Coshott partieto establish that Robert’interest waheld on trust and that it wawithin their ability to have led evidence explaining the acknowledgment and passage of moneythrough Schlotzsky’account to purchase the interest which warelied upon in support of that case. In thiregard, reliance may properly be placed upon the principle tracing back to the remarkof Lord Mansfield in Blatch v Archer (1774) 98 ER 969 at 970 that “all evidence ito be weighed according to the proof which it wain the power of one side to have produced, and in the power of the other to have contradicted”. AHodgson JA (with whose reasonBeazley JA agreed) explained in Ho v Powell (2001) 51 NSWLR 572 at [14]-[15]:

[I]n deciding factaccording to the civil standard of proof, the court idealing with two questions: not just what are the probabilitieon the limited material which the court has, but also whether that limited material ian appropriate basion which to reach a reasonable decision.

In considering the second question, it iimportant to have regard to the ability of parties, particularly partiebearing the onuof proof, to lead evidence on a particular matter, and the extent to which they have in fact done so.

(Citationomitted.)

[81]    Thus, where the evidence relied upon by a party bearing the onuof proof doenot itself clearly discharge the onus, the failure by that party to call or give evidence that could cast light on a matter in dispute irelevant to determining whether the onuibeing discharged: Hampton Court Ltd v Crook(1957) 97 CLR 367 at 371 (Dixon CJ); Shalhoub v Buchanan [2004] NSWSC 99 at [71] (Campbell J). Thiprinciple itherefore wider than that in Jonev Dunkel (1959) 101 CLR 298. AAustin J in Australian Securitieand InvestmentCommission v Rich (2009) 236 FLR 1 explained at [440], “[w]hereaJonev Dunkel reinforcean inference drawn against the party who hanot called evidence, to the effect that the evidence would not have assisted that party’case, Blatch v Archer leadeither to the drawing of such an inference, or to some other assessment of the weight of evidence, unfavourable to the party against whom the principle iapplied” (emphasiadded).

[82]    In short, the Coshott partiebore the onuof proving the trust over Robert’interest but failed to call or give evidence explaining the documentand transactionon which they rely. Yet Robert, in particular, wain the best position to explain them. Thicannot be ignored when weighing the limited evidence they relied upon to support their case with all the other evidence which tended to undermine it.

315    For reasonwe will come to later, there waa similar absence of evidence or explanation (or evidence or explanation from a credible witness) of the documentand transactionpertaining to the disputed assets. We have already noted that the appellantwere in the best position to adduce evidence from other witnesseor documentary sourceand, in spite of applicationto re-open at the trial and for further evidence to be received in thiappeal, no material of the kind that one would expect to exist if the disputed assetwere genuinely held aassetof the FSF habeen produced. The absence of that evidence cannot be ignored when weighing the evidence upon which the appellantrelied and the other evidence and inferenceavailable from that evidence which tended to undermine the appellants’ case.

Errorof fact involving credit

316    We have already referred to the findingof credit against MrFrigger: see [83]–[89] above, and the principleof appellate review. The following iappropriate to add at thipoint concerning central findingmade by the primary judge.

317    The primary judge wanot bound to accept the evidence of MrFrigger even if that evidence wanot contradicted by evidence from another source. Anoted earlier in these reasons, the primary judge made a number of findingthat affected the credit of MrFrigger. The primary judge expressed the effect of hiconclusionon MrFrigger’credit in the following way (Liability Judgment at [89]):

Nevertheless, for the above reasons, and for otherwhich will appear in the course of discussion of evidence below, I do not accept MrFrigger aa witnesof truth. That conclusion haa seriouimpact on the applicants' case, ait wabased entirely on her evidence. I cannot accept her evidence atrue unlesit isupported by independent evidence or the inherent probabilitieof the situation. And the fact that MrFrigger inot above altering documentshe provideto the court impacton what can be treated aindependent evidence. If a document came from the applicants, it must be treated with caution.

318    None of ground2, 3, 4 or 5 of the re-amended notice of appeal pleadthat the primary judge made any error of fact or law in making hiadverse findingof credit against MrFrigger. Indeed, the pleain para 4(e) (ground 3 – BOQ1 and BOQ2) and para 5(e) (ground 4 – Main Portfolio) of the re-amended notice of appeal are predicated on acceptance of the primary judge’adverse finding of credit concerning MrFrigger. There the appellantplead (albeit with understated mischaracterisation of the nature of primary judge’adverse credit findings):

4(e)    [The primary judge’s] adverse credibility finding against MrFrigger because she mistakenly typed her name on a St George Bank Account statement (being one of thousandof FSF Financial Records), doenot affect or alter the legal and beneficial ownership of BOQ1 and BOQ2.

5(e)    [The primary judge’s] adverse credibility finding against MrFrigger because she added the word“Frigger Super Fund” to Commsec Financial Year Summary for 2018 doenot affect or alter the legal and beneficial ownership of the Main Portfolio.

319    Nonetheless, the appellants’ written submissionformally assert that the primary judge made a mixed error of fact and law in finding (Liability Judgment at [51]) that MrFrigger knowingly altered documentwhich she put into evidence in order to create the false impression that the documentsupported the appellants’ case. The appellantsubmitted that the primary judge’adverse credibility finding waunexplained, or insufficiently explained so ato bring it within an error of fact of the kind referred to in Fox v Percy.

320    It inot clear from the groundof appeal and the appellants’ submissionprecisely how principleexpressed in Fox v Percy at [28][29] and Lee v Lee at [55] are sought to be invoked.

321    It appearthat the appellantcontend that the primary judge’finding ato MrFrigger’credit, and in particular that she knowingly altered the St George Bank account statement and CommSec financial year summary and tendered them in evidence to create the false impression that these documentsupported the appellant’case, wainconsistent with incontrovertible factor uncontested testimony, glaringly improbable or contrary to the compelling inferenceof the case. The appellants’ submissiondo not condescend to particularise the incontrovertible factor uncontested testimony with which it ialleged the primary judge’conclusionwere inconsistent. Nor do they explain how it could be said that hiconclusionwere glaringly improbable or contrary to the compelling inferenceof the case. Otherwise, the appellantrelied on the following matters.

(1)    It waasserted that MrFrigger had tendered separately a correct (unaltered) copy of the St George Bank account statement. Implicitly, that ito negate the inference that MrFrigger sought to tender the altered document for the purpose of creating a false impression.

(2)    It waasserted that the altered copy of the CommSec financial year summary for 2018 wamischaracterised ashare certificate ownership rather than a list of shares. The meaning of that submission iunclear and it wanot clarified during the appellants’ oral submissions. It may be a reference to the explanation that MrFrigger gave at trial for adding the notation Frigger Super Fund, which wasaid to be for the auditor and to identify the securitieaassetof the FSF.

(3)    It waasserted that the minuteof the trusteemeeting of 1 July 2014 were produced after the respondent challenged the effect of the declarationof trust in MTrenfield’affidavit of 22 May 2020. Implicitly, the production at that time for that reason isaid to explain the reasonfor the appellantnot having produced the document at an earlier point in time.

(4)    It waasserted the respondent’counsel obfuscated, apparently during hicross-examination of MrFrigger, her explanation that the $80,000 St George Bank term deposit waa personal claim against the liquidator of CAT that had been contributed in specie to the FSF. The meaning of that submission ialso unclear and it wanot clarified during the appellants’ oral submissions.

(5)    It waasserted that the primary judge gave no weight to the fact that the respondent had apparently contended in another proceeding involving an unrelated party that a bank account that doenot contain the wordatrustee for or trust did not necessarily mean that the fundwere not held on trust (citing Parbery v QNI MetalPty Ltd [2020] QSC 143). The point of that submission iunclear.

322    None of these matterdisclose appellable error. The primary judge’reasonreveal that he gave careful and detailed consideration to relevant matterof importance and hiconclusionare not ‘glaringly improbable’, ‘contrary to the compelling inferences’ or inconsistent with incontrovertible factor uncontested testimony.

323    The primary judge did not accept MrFrigger’explanationfor the late production of the correct St George Bank account statement or the explanationfor the original tender and production of the altered version of the St George Bank account statement. He found them implausible for varioureason(Liability Judgment at [65]–[69]). He also rejected her explanations, in part, based on her demeanour (Liability Judgment at [70]). He also made an adverse finding of credit because MrFrigger did not correct the error in the record until forced to do so (Liability Judgment at [71]). There ino error in the primary judge’reasoning.

324    Ato the CommSec financial year summary, it ipossible that the appellants’ submissionare making reference MrFrigger’explanation that she added the word‘Frigger Super Fund’ to “identify the list of shareand itmarket value for the purpose of satisfying the external audit”. The primary judge rejected her explanation for a number of reasons. It wainconsistent with the documentthe respondent had obtained from the auditor which did not contain the notation ‘Frigger Super Fund’ and she wanot able to explain the absence of the notation from the documentin the auditor’possession (Liability Judgment at [77], [81]). She gave an explanation of the manner in which she altered the document which the primary judge found unconvincing (Liability Judgment at [78]). She provided no explanation for the original production and tender of the altered document despite being on notice an explanation warequired (Liability Judgment at [82][83]). Independently, the primary judge considered that tender of the document affected her credit because she knew it had been altered, but did not say so in her evidence (Liability Judgment at [85]). There ino error in the primary judge’reasoning.

325    Ato the purported minuteof the trusteemeeting of 1 July 2014, the primary judge found that document wafabricated for the purposeof use aevidence in the proceedings. The primary judge considered, based on the late production of the document, MrFrigger’answerto questionput to her during cross-examination and her propensity to produce and tender altered documents, that the minutewere fabricated (Liability Judgment at [469]–[471]). The primary judge also relied on hiobservationof her aa witnes(Liability Judgment at [472]). Again, there ino error in the primary judge’reasoning.

326    Ato the $80,000 St George Bank term deposit, MrFrigger wacross-examined about a statement she had made in an affidavit filed in the proceedingthat resulted in the sequestration orderin which she had said an amount of $80,000 waan asset of the FSF. In a hearing before Colvin J, she sought to resile from that statement and claim that it waa personal asset that could be set-off against the debt that wathe subject of the bankruptcy petition. She said her evidence in the proceedingbelow that her attempt to resile from that statement before Colvin J waa mistake. Therefore, the appellants’ submission concerning the St George Bank term deposit appearto be a reference to her cross-examination and explanationgiven during her cross-examination on that topic. The primary judge concluded that the upshot of her cross-examination wathat it demonstrated that she had a readinesto change what she tellthe Court in order to suit what she perceiveto be her interest on the particular occasion (Liability Judgment at [86]–[87]). We see no error in that conclusion.

327    Ato the respondent’apparent position regarding the nomenclature of bank accountin other unrelated proceedings, the primary judge could not be in error for not attributing any weight to a submission the respondent made in unrelated proceedingbetween unrelated partieon different factand issues. There ino merit in that submission.

328    It followthat the appellanthave not provided any reason for the Court to depart from the primary judge’adverse findingof credit. In particular, there ino reason that thiCourt should not approach itreview of the groundof appeal and asserted errorof fact from the perspective that MrFrigger wanot a witnesof truth. Moreover, her evidence on a topic of controversy should not be accepted unlesit wasupported by independent evidence or the inherent probabilitieof the situation.

Errorof fact involving inference

329    Ground2, 3, 4 and 5 of the re-amended notice of appeal contain contentionthat the primary judge made errorof fact in failing to draw inferencefrom information contained in exhibittendered in evidence that are alleged to have been consistent with the oral evidence of MrFrigger and the appellants’ case below.

330    The primary judge made a number of findingof primary factand also of secondary factbased on inferencedrawn from other fact(primary or secondary) that he found to be established on the evidence. The procesof drawing inferenceievaluative. None of the groundof appeal plead that any specific finding of primary or secondary fact which the primary judge made wawrong. In substance, the groundof appeal challenge the primary judge’ultimate conclusion that the state of the evidence wasuch that the appellanthad not proven, on the balance of probabilities, that the disputed assetwere assetof the FSF. More specifically, the primary judge failed to draw the inference from other established factthat the appellanthad formed the intention and taken all necessary stepto give legal effect to transactionthat rendered the disputed assetheld on trust for the benefit of the memberof the FSF aa regulated SMSF. In the review of such findingthe advantage of the primary judge here was, at the very least, that which wadescribed by Kirby J in Earthline at [89][91] and adopted by Gleeson CJ, Gummow J and Kirby J in Fox v Percy, to which we have referred.

331    Having due regard to the self-representation of the appellants, there remain significant difficultiein identifying in the pleaded groundof appeal any asserted appellable error of fact of the primary judge. The pleaded groundare largely an invitation to rehear the trial at first instance and reach a different conclusion to the primary judge on the same evidence. Awe have said, the primary judge had a real advantage in having the case unfold before him and the opportunity to deal with the masof material before him over time ait came forward. The appellants’ submissionprimarily consisted of strongly expressed disagreement with the conclusionof the primary judge on a long list of factual findings. Ultimately, the appellants groundand submissionboil down to an assertion that the primary judge wawrong for failing to draw the ultimate inferencein favour of finding that the disputed assetwere assetof the FSF.

332    In the context of matterraised in thiappeal, it ialso important to keep in mind that inference ito be distinguished from conjecture or speculation. “There can be no inference unlesthere are objective factfrom which to infer the other factwhich it isought to establish. In some cases, the other factcan be inferred with amuch practical certainty aif they had been actually observed. In other cases, the inference doenot go beyond reasonable probability. But if there are no positive proved factfrom which the inference can be made, the method of inference failand what ileft imere speculation or conjecture”: Caswell v Powell Duffryn Associated Collierie[1940] AC 152 at 169170 (per Wright LJ). See also Hawkinv PowellTillery Steam Coal Co Ltd [1911] 1 KB 988 at 991992 (per Cozens-Hardy MR) at 995 (per Fletcher Moulton LJ) at 996 (per Buckley LJ). In that case Buckley LJ said at 996–997:

When it isaid that a person who cometo the Court for relief must prove hicase, it inever meant that he must prove it with absolute certainty. No fact can be proved in thiworld with absolute certainty. All that can be done ito adduce such evidence athat the mind of a tribunal isatisfied that the fact iso. Thimay be done either by direct evidence or by inference from facts. But the matter must not be left to rest in surmise, conjecture or guess. Here there wano evidence to prove that thiman'death resulted from an accident arising out of and in the cause of hiemployment. It may have so resulted or it may have resulted from a different course. According to the medical evidence wind in the stomach would produce the belching from which the man suffered at the time; that may have produced such pressure upon the heart ato lead to a fatal result. That waone possible cause. The exertion arising from the employment waanother possible cause. It inot enough to say that the latter ia possible cause. It must be established to my satisfaction that it wathe cause. Iit proved, that ito say, iit established to my satisfaction by factwhich are given in evidence, that the death of a man resulted from the employment? In my opinion there ino evidence to prove it. It isimply a guess. I might guesthat it came from it, when after all it came from something else. That will not do; the applicant must prove her case.

See, also, Holloway v McFeeters (1956) 94 CLR 470 (Holloway v McFeeters) at 476-477, 480-481.

333    In Cumminv Cummins, where a bankrupt’trusteein bankruptcy sought to prove, by inference from established facts, that the bankrupt’‘main purpose’ in making a transfer of property fell within one of the purposeproscribed under 121(1) of the Bankruptcy Act and, asuch, the transfer wavoid, the High Court said (at [34]) (citationomitted):

What had been required for the Trusteeto succeed at trial wathat the circumstanceappearing in the evidence gave rise to a reasonable and definite inference, not merely to conflicting inferenceof equal degree of probability, that, in making the August transactions, Mr Cumminhad the "main purpose" required by the statute.

334    It followthat to succeed in thiappeal the appellantmust demonstrate that the circumstanceappearing in the evidence gave rise to a reasonable and definite inference, not merely to conflicting inferenceof equal degree of probability, that the appellants, atrusteeof the FSF, had formed the intention and taken such actionawere necessary to render disputed assetheld in the personal name of Mr Frigger or MrFrigger or both assetof the FSF. Further, the state of the evidence before the primary judge must be such that thiCourt inot merely inclined to the view that such a reasonable and definite inference waopen, but that the primary judge wa‘wrong’ not to draw it.

The primary judge’approach to intention to create trusts

335    Ground2–5 of the re-amended notice of appeal and the appellants’ submissionraise a number of asserted errorof the primary judge relating to what the appellantcontend watheir case below and what findingof fact the primary judge should have made in reliance on inferenceto be drawn from documents. The documentlargely concerned financial statement(balance sheets) and tax returnof the FSF read with bank statementand CommSec financial yearsummarise of trading activities.

336    The starting point for the appellants’ contentionian assertion that the primary judge wawrong to embark on a consideration of whether or not there waevidence of an objective manifestation of an intention to create a trust over the fundin the BW1, BOQ1 and BOQ2 accountand the securitiein the Main Portfolio (CommSec account). The appellantcontend that their case before the primary judge wathat the fundin the BW1 account were income from assetof the FSF. The trusteemade a decision to transfer that income to the FSF accumulation account in the exercise of the power in cl 19 of the FSF Trust Deed (we note the power imore accurately identified athe power in cl 20.4) and that capitalised income waused to make further investmentof the FSF. The income (interest, rent, dividendand realised capital gains) wasaid to be derived from the BW1 account, the Armadale, Hobart, Edward Street, Como and Bayswater propertieand securitieof the Main Portfolio. The appellantcontend that there wano need for the primary judge to consider if there were an objective manifestation of an intention to create a trust over the assetin question because the fundfrom which they were derived were already held in trust on the termof the FSF Trust Deed.

337    We do not consider that the primary judge misunderstood the manner in which the appellantput their case at trial. The primary judge observed that the appellants’ case involved an allegation that the money in the BOQ1 and BOQ2 accountwaderived from income earned from FSF assets and it wathe respondent who had submitted that it wanecessary for the appellantto demonstrate an objective manifestation of an intention to hold the fundon trust on the termof the FSF (Liability Judgment at [29][30]). However, the primary judge considered that it wanecessary for the appellantto demonstrate an objective manifestation of an intention that the fundin the accountwere held apart of their interestin the FSF aa regulated superannuation fund (Liability Judgment at [31]). Similarly, the appellanthad to establish (by evidence) that the securitiein the Main Portfolio were assetof the FSF (Liability Judgment at [34]).

338    Regarding the BW1 account, the primary judge considered the question of whether the BW1 account waan asset of the FSF warelevant to the question of whether or not the disputed assetwere also assetof the FSF (Liability Judgment at [211]). The primary judge understood that the appellants’ case turned on undertaking a ‘tracing’ exercise and that exercise involved identifying that fundof the FSF were paid into the BW1 account and paid into the BOQ1 account or used to acquire securitiein the Main Portfolio (Liability Judgment at [212]–[215]). That required the appellant to demonstrate that all fundin the BW1 account during the relevant period were fundof the FSF. That could be achieved by proving that all inflowof fundwere income derived from FSF assetor by proving that the fundin the BW1 account were an asset of the FSF. That is, there waan objective manifestation of an intention to hold all fundin the BW1 account in trust for the co-trusteeof the FSF. If so, it would provide a more ready basifor an inference to arise that one asset substituted for another waintended to remain property of the FSF. Thus, the primary judge observed (Liability Judgment at [215]):

in practice both partieconducted their case on the basithat if BW1 wafound to be a trust asset, that would be relevant to determining the ownership of the fundwhich flowed from that account and ultimately into BOQ1. That iconsistent with the principleI have summarised above ato when the court may infer the intention necessary for a trust to arise.

339    While the primary judge rejected the application of the formal ruleof tracing to the appellants' case, he accepted that “the concept of tracing described in Foskett v McKeown may provide useful guidance for assessing that factual contention” (Liability Judgment at [213]–[214]). The primary judge also accepted that “if a trustee exchangeone asset for another, an intention that the latter asset isubject to the relevant trust may be more readily inferred” (Liability Judgment at [215]). Therefore, the primary judge accepted, in substance, that it waopen to the appellantto demonstrate the factual foundation for their case on the basifor which they contended.

340    The primary judge considered that it inecessary to demonstrate an objective manifestation of an intention to create a trust to establish that a trust over property habeen created (Liability Judgment at [96]–[104]). Further, necessary intention may be established from clear inference (Liability Judgment at [103]). Although these principlerelate to the creation of a trust, hiHonour considered the principleequally applicable to the question of whether assethave become subject to an existing trust (Liability Judgment at [105], [115]). The primary judge accepted that such an intention may be inferred from circumstances, but it needed to be manifested in “some outwardly observable way” (Liability Judgment at [106]–[115]).

341    The primary judge then observed (Liability Judgment at [120]–[121]):

[120]    While the question of whether the applicanthold the disputed asseton trust ian important one, it inot the ultimate question raised by the applicants' claims. AI have said at [23] above, the applicantdo not seek any declaration that the assetare 'property held by the bankrupt in trust for another person' within the meaning of 116(2)(a) of the Bankruptcy Act, and I have also referred to the difficultiethat casesuch aBoensch v Pascoe would pose if the applicantdid attempt to seek such a declaration. The ultimate question iwhether the applicants' interestin the assetare part of their interestin a regulated superannuation fund for the purposeof 116(2)(d)(iii)(A) of that Act.

[121]    Whether the FSF ia regulated superannuation fund, and whether the applicanthave an interest in it, iconsidered below. But the truly contentiouissue iwhether the disputed assetare assetof that fund. On the case put by the applicants, only then will the applicants' interestin them be protected from the claimof the creditorof the bankrupt estates. For a superannuation fund which habeen administered with attention to formalitieand the requirementof the SIAct and SIRegulations, thilast logical step may be uncontentiouor even assumed. But awill be seen, the FSF hanot been administered in that way.

342    While it ifair to say that the primary judge’reasonfocused on the extent to which the evidence established an objective manifestation of an intention to create a trust over or contribute to a trust the fundheld in the BW1, BOQ1 and BOQ2 accounts, the securitieheld in the Main Portfolio and the Residential Propertie(Liability Judgment at [135]–[196]), it wanot, by any means, the only consideration to which he had regard. The primary judge also considered the extent to which an inference may be drawn from surrounding circumstances, particularly in circumstanceof a family arrangement, that all fundin the bank accountwere intended to be fundof the FSF and all securitiein the Main Portfolio were intended to be assetof the FSF (Liability Judgment at [148]–[154]). The primary judge also considered the extent to which fundor assetmay be traced into fundor assetthat were accepted to be or were established afundor assetof the FSF (Liability Judgment at [211]–[215], [282][325], [329][331]).

343    The primary judge did not approach the forensic task from the perspective that the appellantcould only succeed if they were able to establish an objective manifestation of an intention to create a specific trust over the BW1, BOQ1 and BOQ2 accountor the Main Portfolio or contribute them to the FSF in specie before their bankruptcy. The primary judge considered the substance of the appellants’ case and the extent to which there waobjective evidence that the fundin the BW1 account were fundof the FSF and, to the extent they were, if those fundcould be traced into the BOQ1 and BOQ2 accountand securitiein the Main Portfolio.

344    It wain hiconsideration of the evidence that the primary judge concluded that the appellanthad failed to establish the factual foundation for the relief claimed.

Record keeping obligationof SMSF trustees

345    The sequestration orderwere made on 20 July 2018. However, the primary judge found that the relevant act of bankruptcy occurred on 8 November 2017. Accordingly, that wathe date of commencement of the bankruptcy and the date at which the property of the appellantthat idivisible amongst the creditorof their bankrupt estateito be determined (Liability Judgment at [136]–[140]). That finding waunchallenged on appeal.

346    The question of whether BW1, BOQ1 and BOQ2 accountand the Main Portfolio were assetof the FSF arose in the first instance because the legal title to those assetwanot held in the name of all of the co-trusteeof the FSF at the date of bankruptcy or sequestration orders. The BW1 account waevidently opened in and held in the name of MrFrigger. The BOQ1 account waopened in the name of Mr Frigger. The BOQ2 account waopened in the name of MrFrigger. The Main Portfolio waopened and held in the joint nameof Mr and MrFrigger. None of these accounthad an account designation ‘ATF the Frigger Superannuation Fund’ or similar aitypical when accountare opened with financial institutionby a person acting in a trustee capacity. MrFrigger waalso the registered proprietor and holder of the legal title to the Como and Bayswater properties.

347    In these circumstancethe appellantplainly carried the onuof proving that, notwithstanding the legal title to the assetwaheld by one or both of Mr and MrFrigger, the asset waheld for the benefit of the memberof the FSF. Due to the record keeping obligationof trusteeof a SMSF under the SIAct and SIRegulations, it ito be expected that if the disputed assetwere genuinely assetof the FSF, the recordof the trusteewould contain evidence of decisionof the trusteeand transactionentered into before 8 November 2017 and 20 July 2018 and other recordidentifying them aassetof the FSF.

348    Ato thicontext and these requirements, the primary judge made the following observationwith which we agree (Liability Judgment at [148]–[156]).

[148]    The disputed assetare all assetwhich are capable of being acquired, held and disposed of for investment purposes, such acash deposited in high interest bank accounts, listed shareand other securities, and commercial and residential real property which ileased to rent-paying tenant(although, amentioned, the first respondent allegethat any purported contribution of the Residential Propertieto the FSF entailed certain contraventionof the SIAct).

[149]    It will be seen that, to a significant extent, the dealingthat surround the FSF meet Gummow J'description in Herdegen at 278 of 'private family dealingwhere some imprecision of thought and expression might perhapbe expected', and also to 'a pattern of businesdealingeach in legal form intended to follow those before it, with a resulting abbreviation in attention to detail'. If allowance imade for the private and family context of the FSF, that could make it easier for the court to discern the existence of a trust over disputed assets, despite the lack of formalities.

[150]    Against that, however, ithe reality that, family dealingor not, the trust in question wasituated in a complex and prescriptive web of lawintended to regulate mattersuch athe concessional tax treatment of superannuation contributionand income. Thitendto speak against finding that assetwere part of a trust: cp. Herdegen at 278. That ibecause in the context of that web of rulea failure to observe formalities, or even to expresinformally an intention to include an asset in a trust, supportan inference that the necessary intention waabsent. Although the SIAct doenot displace any of the rulerelating to the creation of trusts, itprescriptionenable complying regulated superfundto obtain concessional tax benefits. Hence, one would expect a trust which habeen purportedly created to obtain those tax benefitto comply with the rulewhich enable that to occur. A failure on the part of the relevant partieto comply with the rulemay support the inference that no trust wathereby intended at all. That iall the more so where, ahere, at least one of the putative trustees, MrFrigger, ia qualified accountant who holdherself out ahaving detailed knowledge of the relevant laws. While the 'family' nature of the FSF may lead the court to be lesstrict about any formalitierequired for an asset to be held on trust, the regulated nature of the FSF pointaway from any such relaxation of those requirements.

[151]    For example, 34(1) of the SIAct providethat each trustee of a superannuation entity must ensure that the prescribed standardapplicable to the operation of the entity are complied with at all times. Section 31(1) permitthe SIRegulationto prescribe standardapplicable to the operation of regulated superannuation fundand to trusteeof those funds. Regulation 4.09A(2) containthe following prescribed standard:

A trustee of a regulated superannuation fund that ia self managed superannuation fund must keep the money and other assetof the fund separate from any money and assets, respectively:

(a)    that are held by the trustee personally; or

(b)    that are money or assets, athe case may be, of a standard employer-sponsor, or an associate of a standard employer-sponsor, of the fund.

Thistandard ialso reflected in 52(2)(g) of the SIAct, which effectively implieinto the FSF Deed a covenant to the same effect: see 52(1).

[152]    It may be expected that the trusteeof an SMSF wishing to comply with thirequirement will be careful to ensure that any assetthat are part of the fund are clearly identified asuch. They would take stepto ensure that formal recordof their ownership of fund assetnote the trustee capacity in which they held the assets. They would not hold fund assetin the name of only one of the trusteewhere the trusteeare individualwho are likely also to hold assetin a personal (non-trustee) capacity. And yet, almost without exception, assetsaid to be part of the FSF lack such clear identification, or any identification, atrust assets. Significant assetare held in the name of one or the other of the individual trusteeonly. Those circumstancetend to indicate that they are not FSF assetat all.

[153]    In the same vein, MrFrigger gave evidence that in managing and administering the FSF, she used certain guidepublished by the ATO. One of the guideshe annexed, titled 'Ownership and protection of assets' contained the following passage(ACTF 18 p 131):

You need to manage your fund'investmentseparately from the personal or businesinvestmentof members, including your own. Thiincludeensuring the fund haclear ownership of itinvestment assets.

To protect fund assetin the event of a creditor dispute, and prevent costly legal action to prove who ownthem, assetshould be recorded in a way that:

    distinguishethem from your personal or businesassets

    clearly showlegal ownership by the fund.

Fund asset(other than money) should be held in the name of either:

    the individual trustee'atrusteefor' the fund

    the corporate trustee 'atrustee for' the fund.

The assetcan't be held in the name of a trustee or a member aan individual.

An unavoidable restriction (such astate law) may prevent your SMSF from holding assetusing the fund'name.

If assetcannot be held in the fund'name, ownership by the fund must be clearly established. You can do thiby executing a caveat, or creating an instrument or declaration of trust to enable the fund to assert itownership.

If possible, documentsuch asale agreementshould be executed in the name of the trustee'atrusteefor' the fund.

[154]    As will be seen, thiguide largely describewhat the applicanthave not done in relation to the disputed assets. They have not observed the guidelineabout clearly distinguishing assetfrom personal assetand recording the legal ownership of the fund. There ino evidence of them having recorded ownership in their capacity atrusteeof the FSF at any time before the making of the sequestration order. They have not executed any instrumentthat clearly enable the fund to assert itownership. The only formal instrumentof any kind in relation to disputed assetare the 2014 Declarationover the Residential Propertieand, awill be described, they are ambiguouand their effect icontestable. That the applicantdid not comply with these guidelinesupportan inference that the disputed assetwere not part of the FSF.

[155]    I am consciouthat the necessary manifestation of intention can be inherently difficult to prove, especially when dealinggo back many years. An inability to prove that wordwere spoken doenot necessarily support a firm finding that the wordwere not in fact spoken. But it isignificant that in thicase, apart from the 2014 Declarations, and some internet banking 'nicknames' which I will come to, the applicanthave not pointed to any verbal statementof any kind, written or spoken, formal or informal, expressing an intention that the disputed assetbe part of the FSF at relevant times. Their case ilargely based on assertionin affidavitby MrFrigger of the existence of the necessary intention, and circumstantial evidence from which intention can (they say) be inferred.

[156]    Aan example of that circumstantial evidence, MrFrigger'affidavit ACTF 2 sworn 8 May 2019 (para 5) referto adverse tax consequencewhich would follow if the fundin BOQ1 were not part of the FSF and implicitly pointto the improbability that '[m]y husband and I, both atrusteeof the FSF and in our personal capacitiehave effectively lied in hundredof income tax returnand annual returnsince 1997 in relation to assetand income'. For reasonwhich should be obviouby now, that appeal to the court'belief in the honesty of MrFrigger, at least, inot persuasive.

Dutieand powerof SMSF trustees

349    Although a self-managed superannuation fund iregulated under and affected by the provisionof the SIAct, SIRegulationand the ITAA 1997, it is, nonetheless, a form of trust. The FSF haa trust deed, trustees, trust property and beneficiarie(members). The trustcreated for the purposeof the superannuation legislation are also regulated by the TrusteeAct and the general principleof law applicable to trustto the extent these laware not inconsistent with the superannuation legislation.

350    The FSF Trust Deed created the FSF aa self-managed superannuation fund for the purposeof the superannuation legislation. Serenity HoldingPty Ltd (later Computer Accounting and Taxation Pty Ltd or CAT) waappointed trustee of the FSF. CAT waplaced into liquidation in 2010. The evidence regarding any changeand appointmentof new trusteewanot clear, but, nonetheless, anoted earlier in these reasons, the primary judge made finding(not challenged in thiappeal) (Liability Judgment at [196]) to the effect that Mr and MrFrigger were trusteefrom early 2008 until 21 July 2018. For part of that period, from at least 6 July 2016 until 21 July 2018, Mr Michael Frigger and MrJessica Frigger were also trustees. That is, from at least 6 July 2016 until 21 July 2018 there were four trusteeof the FSF. H & A Frigger Pty Ltd (or HAF) waappointed sole trustee on 21 July 2018 and remained the sole trustee until 15 April 2020. On 15 April 2020, Mr & MrFrigger, Mr Michael Frigger and MJessica Frigger were again appointed co-trusteeand HAF retired.

351    The significance of the primary judge’findingconcerning the individualwho were trusteeof the FSF ithat at all material timeup to 20 July 2018 (the date of the sequestration orders) the trusteeof the FSF were either Mr and MrFrigger, aco-trustees, or Mr and MrFrigger, Mr Michael Frigger and MJessica Frigger, aco-trustees.

352    Decisionof co-trusteemust be unanimous: Luke v South Kensington Hotel Co (1879) LR 11 Ch D 121 at 125. In the case of In the Estate of William Just (deceased) (No 1) (1973) 7 SASR 508 (Estate of Just), where money had been paid into a bank account held in the name of one of two co-trustees, JacobJ said (at 513514):

… In the case of co-trusteeof a private trust, the office ia joint one. Where the administration of the trust ivested in co-trustees, they all form, ait were, but one collective trustee and therefore must execute the dutieof the office in their joint capacity. Sometimes, one of several trusteeispoken of athe active trustee, but the court knowof no such distinction: all who accept the office are in the eyeof the law active trustees. If anyone refuseor iincapable to join, it inot competent for the other to proceed without him, and if for any reason they are unable to appoint a new trustee in hiplace, the administration of the trust must devolve upon the court. Though a trustee joining in a receipt may be safe in permitting hico-trustee to receive in the first instance, yet he will not be justified in allowing the money to remain in hihandlonger than reasonably necessary. The proper course ito pay trust money into a joint bank account in the nameof both or all the trustees. …

353    In general, a trustee must discharge the dutieand exercise the powerof trustee personally. Where there are co-trustees, in the absence of unanimouagreement, actiontaken independently of the other co-trusteelack authority and do not bind all trustees: see, e.g., Lee v Sankey (1872) LR 15 Eq 204 at 211; Astbury v Astbury [1898] 2 Ch 111 at 115116; Pelham v Pelham & Braybrook [1955] SASR 53 at 57. A co-trustee inot and cannot be bound by a decision of the majority and each co-trustee must turn hior her mind to the exercise of the applicable power and decide on the action to be taken: see, e.g., Cock v Smith (1909) 9 CLR 773 at 800; Re Billington [1949] St R 102 at 111, 115.

354    Athe authorof Ford and Lee: The Law of Trust(looseleaf at 13 February 2020, Thomson Reuters) (Ford and Lee) observe (at [9.11090]): “A consequence of the unanimity rule ithat trust businescannot be transacted except at a meeting at which all the trustees, or their delegates, are present; and that where the trusteecannot agree about a course of action the statuquo prevails.” In the case of a regulated superannuation fund, if the superannuation entity haa group of individual trustees, the trusteemust keep, and retain for at least 10 years, minuteof all meetingof the trusteeat which matteraffecting the entity were considered: 103(1) SIAct.

355    It may also be possible for co-trusteeto ratify an action taken by another trustee without prior agreement: Meeseena v Carr (1870) LR 9 Eq 260 at 262–263; Hansard v Hansard [2015] 2 NZLR 158 (Hansard v Hansard) at [47] citing ThomaLewin and others, Lewin on Trust(18th Ed, Sweet & Maxwell 2018) at [29-209]. However, for ratification to be effective, the ratifying co-trustee(s) must know of the essential detail of the act or decision in question. It must be more than passive acquiescence to a decision made by another trustee. The act of ratification must show that the co-trustee(s) considered the exercise of power atrustee and consented to the action taken. Thus, “[s]ubsequent approval of financial statement[by all trustees] may therefore not be sufficient to amount to ratification of actiontaken without the unanimouapproval of trustees”: Hansard v Hansard at [51]. Something more than mere approval of financial statementwould be necessary to demonstrate the required ‘act of ratification’.

356    Property of the trust must be held jointly and it ia breach of the trustees’ dutienot to ‘get in’ the trust property and hold the legal (or where applicable equitable) title to that property jointly or otherwise hold the property under joint control: Lewiv Nobbs (1878) 8 Ch D 591 (Lewis v Nobbs) at 594; Guazzi v Pateson (1918) 18 SR (NSW) 275 at 282. AHall VC explained in Lewiv Nobbs, the rationale for the duty ito ensure that trust property inot dealt with improperly by one of the co-trusteeor without the agreement of all co-trustees.

357    Clause 140 of the FSF Trust Deed required the trusteeof the FSF to ensure that money received by the fund was, amongst other things, deposited to the credit of the fund in an account kept with a bank chosen by the trustees. That is, chosen by the co-trusteeby unanimouagreement.

358    While there may be circumstancein which property iconveyed to, or acquired, by one of a number of co-trusteeatrust property with the consent of the other trustees, it remainthe duty of all trusteeto ensure that title to the property iultimately convey to and held by all co-trusteejointly within a reasonable time thereafter: Estate of Just at 513–514. Any inconvenience that might result from the changing composition of the co-trusteefrom time to time doenot absolve the trusteeof that duty: see, e.g., Trusteeof the Kean Memorial Trust Fund v Attorney-General (SA) [2003] SASC 227; 86 SASR 449 at [94].

359    Further, in the absence of an expresprovision permitting mixing, it ialso a duty of a trustee to keep personal and trust property separated: Associated Alloyat 605 [34]. A trustee haa positive duty “to distinguish the piece of property he … acquirefrom other similar thingwhich he may obtain for himself or in which he may be interested”: Van Rassel v Kroon (1953) 87 CLR 298 at 302–303 (Dixon CJ); Heydon and Leeming, Jacob’Law of Trustin Australia (8th ed, LexisNexis, 2016) at [17-02]. It ialso trite that a trustee cannot unilaterally repudiate the trust and appropriate the trust property: Ford and Lee (looseleaf aat 14 May 2021) at [17.4530].

360    A co-trustee iobliged, apart of the duty to get in trust property, to bring proprietary claimagainst another trustee who, in breach of trust, hamisappropriated or mixed trust property with hior her own property. Likewise, a trustee who haparticipated in such a breach of trust haan obligation, notwithstanding hior her own wrongdoing, to make good the trust property and, if necessary, to institute proceedingagainst other trusteewho participated in the wrongdoing to make good the loss: Young v Murphy [1996] 1 VR 279 at 282284, (per Brooking J), 300 (per PhillipJ), 319 (per Batt J).

361    The above principlehave significance in thiappeal because the evidence before the primary judge wato the effect that MrFrigger alone held the legal title to the fundin the BW1 and BOQ2 accounts, Mr Frigger alone held the legal title to the fundin the BOQ1 account and Mr and MrFrigger jointly held the legal title to the securitiein the Main Portfolio. Also, MrFrigger held the legal title to the Como and Bayswater properties. Therefore, the legal title to the disputed assetwanot held by the co-trusteeof the FSF jointly immediately before the sequestration orderwere made or by the sole trustee of the FSF (H & A Frigger) immediately after the sequestration orderwere made. There wano evidence before the primary judge that any of the individual co-trusteehad taken any stepat any time to ‘get in’ the trust property and have fundheld in a bank account in the joint nameof the four individual trustee(or HAF), to transfer the securitiein the Main Account into a CHESholding account held in the joint nameof the four individual trustee(or HAF), or to transfer the Como and Bayswater propertieinto the joint nameof the four individual trustee(or HAF).

362    Likewise, with the exception of a purported minute of meeting of the four individual trusteesaid to have been held on 1 July 2014, which the primary judge rejected aa fabrication, there wano evidence of any meetingof the individual co-trusteeat which unanimoudecisionwere made to take stepto authorise the use of bank accountin the nameof individual trustees, to hold fundof the FSF or the use of the CommSec account in the joint nameof Mr and MrFrigger to hold securitieof the FSF. Nor wathere any evidence of any meetingat which a unanimoudecision wamade to the effect that rent from the Armadale, Hobart, Edward Street, Como and Bayswater propertiewato be paid into the BW1 account held in MrFrigger’individual name. Similarly, there wano evidence of any meetingat which a unanimoudecision wamade to the effect that dividendand the proceedfrom saleof securitieheld in the Main Portfolio were permitted to be paid into the BW1 account and the purchase price of securitieacquired for the Main Portfolio withdrawn from the BW1 account. There wano evidence of any meetingat which a unanimoudecision wamade by all trusteeto approve the financial statementand tax returnof the FSF. Thus, there wano evidence of any act of ratification of any actiontaken by MrFrigger or Mr Frigger in respect of the operation of the BW1, BOQ1 and BOQ2 accountor CommSec account by all co-trustees.

363    Insofar aH & A Frigger iconcerned, there wano evidence of any meetingof directorof that company. By cl 4 of the FSF Trust Deed, HAF waobliged to make decisionunder the FSF Trust Deed by resolution of the directorof that company. HAF waobliged to keep and retain for at least 10 years, minuteof all meetingof the directorat which matteraffecting the FSF were considered: 103(2)(a) SIAct.

364    Further, while it may be possible for a trustee to delegate the performance of actionor functionto an agent and cl 126 of the FSF Trust Deed containan exprespower of the trustee to delegate “any power or duty on any termthe trustee thinkfit”, where the trustee ia group of individuals, the power of delegation must be exercised by the unanimouagreement of all co-trustees. There wano evidence that the power of delegation had been exercised unanimously or at all to confer any powerof management or control on Mr Frigger or MrFrigger in respect of the BW1, BOQ1 and BOQ2 accounts, the CommSec account or the Residential properties.

365    It followfrom the above that there wano evidence of decisionor actof the trusteeof the FSF that one would expect to exist if the trusteehad performed their dutieand the disputed assetwere genuinely assetof the FSF. There waa complete absence of evidence of any unanimoudecisionof the trusteeto enter into the transactionthat are summarised in the financial statementthat were in evidence or to permit the disputed assetto be held by individual trustees. In short, there wano evidence of any ‘act in the world’ performed by any person for or on behalf of the trusteebefore the sequestration orderwere made that iconsistent with the appellants’ case. The appellantmade no attempt to bridge that gap in the evidence upon their unsuccessful applications to re-open before the primary judge or in the extensive application for the Court to receive further evidence in thiappeal.

Tracing

366    In thiappeal, in effect, the appellantseek to side-step the absence of evidence of compliance with trustee dutieby contending that the co-trusteewere not under any obligation to hold assetjointly, that the fundin the BOQ1 and BOQ2 accountand securitiein the Main Portfolio could be ‘traced’ to income derived from assetof the FSF and that income waaccumulated in the exercise of the power in cl 19 of the FSF Trust Deed.

367    The contention that the trusteeof the FSF were not obliged to hold trust assetjointly iwrong for the reasonwe have already given. Leaving to one side that problem, the substance of the appellants’ submission ithat the Court should ignore any failureto comply with the dutieof a trustee of a regulated SMSF and focuon whether specific property now held in the nameof Mr Frigger, or MrFrigger, or both Mr and MrFrigger iproperty in which the memberof the FSF have an equitable proprietary interest. The effect of the appellants’ submission ithat the disputed assetare ultimately held in trust for the benefit of the memberof the FSF and, implicitly that, Mr and MrFrigger have obligations, atrustees, to convey the legal title to that property to all co-trusteeof the FSF.

368    The primary judge made the observation that the appellanthad not relied on 116(2)(a) of the Bankruptcy Act which providethat ‘property held by the bankrupt in trust for another person’ inot divisible amongst the bankrupt’creditor(Liability Judgment at [23], [120]). That observation appearto have informed, in part, the primary judge’approach to the ‘tracing’ exercise the appellantadvanced at the time.

369    The primary judge observed (Liability Judgment at [213], [317]), ‘tracing’ imeanof identifying property of a claimant. It ineither a right nor a remedy, but a procesby which a claimant demonstratewhat hahappened to the claimant’property. It ia preliminary to a personal or proprietary claim in respect of the property identified: Foskett v McKeown [2001] 1 AC 102 (Foskett v McKeown) at 128; Evanv European Bank Ltd [2004] NSWCA 82; 61 NSWLR 75 at [132]–[139]; Heperu Pty Ltd v Belle [2009] NSWCA 252; 76 NSWLR 230 at [89]. The primary judge considered the appellants reliance on these principleto be misconceived because they apply in circumstanceof misappropriation or other wrongdoing and, in thicase, no claim or remedy for wrongdoing wasought in the proceedings. Nonetheless, the primary judge applied the concept of tracing to the evidence in a ‘non-technical’ sense and accepted that that tracing principle may provide useful guidance for assessing the appellants’ factual contention(Liability Judgment at [214]).

370    In Frigger (No 6) an application by the respondent to join Mr and MrFrigger and Mr Michael Frigger and MJessica Frigger arespondentto the proceedingin their capacitieatrusteeof the FSF wadismissed, but, insofar aMr and MrFrigger were concerned, the originating application wato be amended such that they sued both in their personal capacities, abankrupts, and in their representative capacities, atrusteeof the FSF. H & A Frigger waalso joined aa respondent, atrustee of the FSF.

371    The appellantsought declarationto the effect that disputed assetwere held in the FSF on trust for the beneficiarie(members) of that fund. Therefore, those declarationmay be considered to have been sought, in part, atrustees, in substance, against themselveaindividuals. In that context and in circumstancein which the trusteewere duty-bound to ‘get in’ trust property, we are not so sure that the absence of a formal claim against Mr and MrFrigger for some form of restitution of ‘trust property’ renderthe formal tracing rulereferred to in Foskett v McKeown inapplicable.

372    If it were possible to identify specific property in which the memberof the FSF have a beneficial interest that waheld by Mr Frigger, MrFrigger or both Mr and MrFrigger, aat the date of their bankruptcy or the sequestration orders, in breach of their dutieatrusteeof the FSF to hold those assetjointly with all co-trustees, we would not have much hesitation in concluding that the property in question formed part of the property of the regulated superannuation fund in which the appellanthave an interest. Mr and MrFrigger would remain duty bound to restore that property to the current co-trusteeof the FSF. It ia proprietary claim not a personal claim that would support declarationand orderof the kind requested in the amended originating application.

373    However, ‘tracing’ ia factual enquiry whether or not undertaken in support of a proprietary claim. It requireevidence. It involvedemonstrating causal or transactional linkfrom the original property to the property now said to be a substitute for the original property. It doenot necessarily require that one asset i‘substituted’ directly for another. In the procesof demonstrating causal or transaction linkcommon sense and reasonable inference play their part”: Toksoz v Westpac Banking Corporation [2012] NSWCA 199; 289 ALR 577 at [7]–[10]. See, also, J Edelman, ‘Understanding Tracing Rules’ (2016) 16 QUT Law Review 1 at 7–11; GolduPty Ltd (Subject to a Deed of Company Arrangement) v Cummin(No 4) [2021] FCA 1095; 157 ACSR 118 at [265][283].

374    The procesof tracing fund(property) through bank accountinvolving numeroutransactionover many yearcan be complex and costly. It iusually undertaken with the assistance of a forensic accountant and evidence igiven about the transactionunderlying the entriein the bank statementand the linkbetween those entries, such that the linkbetween the claimant’original property and the putative substitute property are proven. Sometimeit inot possible to identify the linkand the property cannot be traced into and out of a bank account. Whatever the case may be, it necessary for there to be evidence to establish the transactional or causal links.

375    In thicase, whatever view itaken about the applicability of the ruleof tracing referred to in Foskett v McKeown, the primary judge approached the evidence to ascertain whether, aa matter of fact, the fundin the BOQ1 account and the securitiein the Main Portfolio could be ‘traced’ by evidence and causative linkbetween the varioutransactionrecorded in the account statements. The primary judge wanot satisfied, on the evidence, that it wapossible to undertake that tracing exercise (Liability Judgment at [282]–[319], [340], [393]–[406]). The appellantcontend in the appeal that the primary judge erred for failing to be so satisfied. The appellants’ contentionin that respect are considered below, however, no error habeen demonstrated in the primary judge’approach to the factual ‘tracing’ enquiry that he undertook.

376    We now turn to consider the nature of the evidence before the primary judge and what, if any, inferencewere available to be drawn from ‘independent’ evidence that were consistent with the appellants’ case and MrFrigger’evidence.

Evidence of FSF financial records

377    MrFrigger gave evidence to the effect that, from inception, the FSF waaudited by independent auditors. A copy of an audit report of Mr Mark Baghdassarian of Just SMSF Auditfor the 2016 financial year, dated 11 January 2019, waan exhibit to her affidavit of 6 March 2019. A balance sheet for the FSF aat 30 June 2018 and a tax return for the 2018 financial year were also exhibitto that affidavit. MrFrigger gave evidence to the effect that these were “the latest balance sheet of FSF and annual return” aof 6 March 2019.

378    A number of other financial documentof the FSF were exhibitto MrFrigger’affidavit of 20 April 2020. These included the following documents:

(1)    Profit and losstatementand balance sheetfor the 2016, 2017 and 2018 financial years. MrFrigger gave evidence to the effect that the FSF earned income from fundin the BOQ1 and BOQ2 accountthat irecorded in these financial recordof the FSF. MrFrigger said these documentwere copieof “audited financial statementof FSF for the period 1 January 2015 until 30 June 2018”.

(2)    An affidavit or MrFrigger sworn 3 August 2018 and filed in Federal Circuit Court of Australia proceedingPEG 409 of 2018 in support of an application the appellantmade in those proceedingfor an interim injunction against the Official Trustee. The exhibitto that affidavit included a tax return of the FSF for the 2017 financial year. In that affidavit MrFrigger deposed that the document “ia copy of the SMSF annual return for 30 June 2017”.

(3)    PPSR registration certificatedated 10 October 2017 concerning the BW1 account and dated 10 April 2014 concerning the Main Portfolio. MrFrigger described these PPSR registrationafor secured interest, being trust receipts, in favour of FSF”.

(4)    Correspondence with Computershare, Linkmarket and Advanced Share share registrieconcerning the Main Portfolio.

379    An affidavit of Mr Ty Maher, an officer of the Official Trustee, affirmed 19 September 2018 and filed in PEG 409 of 2018, waan exhibit to MTrenfield’affidavit of 12 June 2019. The exhibitto Mr Maher’affidavit included:

(1)    An email from MrFrigger to the Official Trustee dated 27 July 2018 attaching a copy of the tax return of the FSF for the 2017 financial year.

(2)    An email from MrFrigger to the Official Trustee dated 22 August 2018 attaching a copy of a tax return of the FSF for the 2016 financial year and a draft copy of the FSF tax return for the 2018 financial year.

380    MTrenfield gave evidence to the effect that she wrote to Just SMSF Auditrequesting that all filein itpossession relating to the affairof Mr and MrFrigger and the FSF pursuant to s77A and 129 of the Bankruptcy Act. Just SMSF Auditresponded and certain of the documentMTrenfield received from Just SMSF Auditwere tendered aexhibitto her affidavit of 22 May 2020. These documentwere afollows:

(1)    Audit reportsigned by Mr Mark Baghdassarian of Just SMSF Auditfor the 2016 financial year, dated 11 January 2019, and for the 2017 financial year, dated 16 March 2019.

(2)    Annual returnfor the FSF for the 2016 financial year, and 2018 financial year, both of which are undated.

(3)    Balance sheetand profit and losstatementfor the FSF aat 30 June 2016 and 30 June 2017.

(4)    Financial statementand reportfor the period 1 July 2016 to 30 June 2017.

(5)    Trustee declarationof the market value of variouassets.

(6)    Member statementfor the 2016, 2017 and 2018 financial yearfor each of Mr Frigger, MrFrigger, MJessica Frigger (the appellants’ daughter) and Mr Michael Frigger (the appellants’ son).

(7)    Minuteof meetingof the trusteeof the FSF for the financial yearended 30 June 2016 and 30 June 2017 both dated 7 January 2019.

(8)    Audit management letterfrom Just SMSF Auditto the trusteeof the FSF dated 11 January 2019 and 16 March 2019.

381    Further financial documentof the FSF were exhibitto MrFrigger’affidavit of 17 June 2020. These included:

(1)    Profit and losstatement and balance sheet for the 2018 financial year.

(2)    An audit report of MBastin of Just SMSF Auditfor the 2018 financial year dated 17 June 2019.

MrFrigger gave evidence to the effect that these documentwere included in the correspondence MTrenfield received from Just SMSF Audits.

382    Pursuant to the leave to reopen that the primary judge granted the appellanton 7 and 9 September 2020, the appellantwere permitted to tender into evidence afurther exhibits:

(1)    An audit report of MKylie Wee for the FSF dated 18 August 2020 for the financial year ended 30 June 2019.

(2)    A balance sheet for the FSF aat 30 June 2019 signed by Mr and MrFrigger.

(3)    A tax return for the FSF for the 2019 financial year.

383    These were also exhibitto the affidavit of MrFrigger of 2 September 2020. Otherwise, the primary judge refused the appellantleave to reopen to adduce the proposed evidence of MrFrigger in that affidavit.

384    In the course of the appellants’ written and oral submissionthey also sought to rely, for the purposeof grounds 2, 3, 4 and 5, on a number of the documentthat were the subject of their application for the Court to receive further evidence in the appeal. For the sake of clarity, the following documentupon which the appellantrelied in their submissionwere not received in the appeal afurther evidence on ground2, 3, 4 and 5.

(1)    MrFrigger’affidavit of 2 September 2020. Thiwanot pressed. However, exhibitAF1 and AF4 of that affidavit were tendered in evidence.

(2)    Just SMSF Auditaudit management letter to the trusteeof the FSF dated 18 August 2020 which waExhibit AF2 of MrFrigger’affidavit of 2 September 2020. Thiwanot pressed.

(3)    A profit and losstatement for the FSF for the financial year ended 30 June 2019 which waExhibit AF3 of MrFrigger’affidavit of 2 September 2020. Thiwanot pressed.

(4)    Declaration of Trust dated 1 July 2018 which waExhibit AF5 of MrFrigger’affidavit of 2 September 2020. Thiwanot pressed.

(5)    MrFrigger’affidavit of 17 September 2020. Thiwanot received for any purpose other than ground 9.

(6)    A document entitled ‘Account transactionby Tax Office procesdate’ for the FSF for the period 22 September 2014 to 14 August 2020 which waExhibit AF1 of MrFrigger’affidavit of 17 September 2020 (ATO accounttransaction report). Thiwanot received for any purpose other than ground 9.

(7)    A copy of a tax return for the FSF for the 2017 financial year which waExhibit AF2 of MrFrigger’affidavit of 17 September 2020. Thiwanot received for any purpose other than ground 9.

(8)    A letter from MrFrigger to Computershare dated 20 December 2021 which waExhibit AF1 of MrFrigger’affidavit of 18 March 2022.

(9)    A letter from Computershare to MrFrigger dated 7 January 2022 which waExhibit AF2 of MrFrigger’affidavit of 18 March 2022.

(10)    An email from MDemi Mudi of Boardroom Pty Ltd to MrFrigger dated 31 December 2021 which waExhibit AF3 of MrFrigger’affidavit of 18 March 2022.

385    The following documentwere received provisionally:

(1)    A letter from MrFrigger to Computershare dated 20 December 2021 which waExhibit AF1 of MrFrigger’affidavit of 18 March 2022.

(2)    A letter from Computershare to MrFrigger dated 7 January 2022 which waExhibit AF2 of MrFrigger’affidavit of 18 March 2022.

(3)    An email from MDemi Mudi of Boardroom Pty Ltd to MrFrigger dated 31 December 2021 which waExhibit AF3 of MrFrigger’affidavit of 18 March 2022.

Awe have already explained, none of these documentiof any assistance to the appellants’ case in the appeal.

386    Separately, a copy of an audit report of MWee of Just SMSF Auditfor the FSF dated 17 January 2022 for the financial year ended 30 June 2021 wareceived in the appeal afurther evidence without objection by the respondent. Again, awe have already explained, thidocument inot of any assistance to the appellants’ case in the appeal.

Documentcontaining hearsay

387    The appellants’ case in the appeal on the asserted errorof fact in ground2, 3, 4 and 5 of the re-amended notice of appeal largely turnon what inferencearise from statementof fact contained in the FSF financial recordreferred to above and certain other documents.

388    Documentmay provide direct or inferential evidence of certain facts. For example, that a letter or email wasent or received on or around a date of the document may be inferred, aa fact, from the date and nature of the document. That depositand withdrawalof sumof money were made into and out of an account for the purposedescribed in a bank statement may be inferred from the nature of the document. That a PPSR registration wamade on the date recorded in the document may be inferred from the nature of the document.

389    Documentmay also contain direct or indirect statementof fact made by the author(s) of the document. These are unsworn statementmade out of court that are hearsay or, in the language of 59 of the Evidence Act, comprise a ‘previourepresentation’. Asuch, these statementare not admissible in civil proceedingunlesthey fall within one or more of the exceptionset out in s60–64, 66A–75, 81–84, 87 and 88 of the Evidence Act. Even if admissible under an exception, the Court retaina discretion to exclude or limit the use of it under s135 and 136 of the Evidence Act if, for example, a document containhearsay that iconsidered highly unreliable.

390    Under s69(1) and 69(2) of the Evidence Act the hearsay rule doenot apply to a document (businesrecord) that:

(1)    is or formpart of the recordbelonging to or kept by a person, body or organisation in the course of or for the purposeof a business, or at any time formed part of such a record;

(2)    contains a previourepresentation made or recorded in the document in the course of, or for the purposeof the busines(businesrecords); and

(3)    the previourepresentation wamade by a person who had or might reasonably be supposed to have had personal knowledge of the asserted fact, or on the basiof information directly or indirectly supplied by a person who had or might reasonably be supposed to have had personal knowledge of the asserted fact.

391    However, under 69(3) of the Evidence Act, the exception to the hearsay rule doenot apply to a businesrecord if the previourepresentation waprepared or obtained for the purposeof conducting or for or in contemplation of or in connection with, an Australian or overseaproceeding. Put another way, businesrecordcontaining ‘self-serving’ statementare not admissible under s59 and 69 of the Evidence Act: see, e.g., Vitali v Stachnik [2001] NSWSC 303 at [12].

392    The expression ‘self-serving’ when used in relation to evidence generally referto an out of court statement of a witnesmade after proceedinghave commenced or are contemplated that iconsistent with the case of the party calling the witness. Under the common law ruleof evidence ‘self-serving’ statementare not admissible. There are exceptionsuch awhere an out of court statement itendered aan admission against interest and the statement also containself-serving components. Self-serving statementmay also be excluded or their use limited under s135 or 136 of the Evidence Act.

393    A document containing a previourepresentation may be admitted into evidence notwithstanding that it inot otherwise admissible under an exception to the hearsay rule by agreement between the partieor it may be tendered and admitted without objection from the other party. In these circumstances, the previourepresentation iin evidence and may be given such probative weight athe trial judge may consider appropriate on all relevant issues: see, e.g., Jonev Sutherland Shire Council [1979] 2 NSWLR 206 at 214, 219220; McLennan v Taylor (1967) 85 WN (PT1) (NSW) 525 at 528529, 537538, 540.

394    While a businesrecord containing self-serving statementinot admissible, such a document may be tendered by one or other of the partiewithout objection and, thereby, a previourepresentation in the document may be admitted into evidence. However, even though a previourepresentation iadmitted into evidence, that saynothing of the probative weight of the representation and the trial judge may give that statement such weight aiconsidered appropriate in the circumstances. That may include taking into account the atmosphere or context in which the documentwere prepared that might make them ‘self-serving’ or any other matter that affects the weight of the previourepresentation: see, e.g., Australian Securitieand InvestmentCommission v Big Star Energy Ltd (No 3) [2020] FCA; 389 ALR 17 at [41]–[43].

The documentupon which the appellantrely

395    Broadly, the appellantcontended in the appeal that the primary judge wawrong not to draw the ultimate inferencein their favour from statementin FSF financial recordand certain other documentary evidence.

Audit reportand balance sheets

396    The appellantcontend that the trustee(s) of the FSF complied with 35E of the SIAct, on time and lodged annual returnon time. The appellantcontended that audited tax returnfor the financial yearended 30 June 2015, 2016 and 2017 were lodged before the sequestration orderwere made and for the financial year ended 30 June 2018, were lodged on 7 September 2018.

397    In support of that contention they rely on a document entitled ‘Account transactionby Tax Office procesdate’ extracted from the ATO BusinesPortal. The document waexhibit AF1 to the affidavit of MrFrigger of 17 September 2020. That is, the appellantrely on a document that wathe subject of their failed second application to re-open. For the reasongiven earlier, that document inot received in the appeal afurther evidence for the purpose of ground2, 3, 4 and 5 of the re-amended notice of appeal.

398    Otherwise, audit reportfor the 2016, 2017 and 2018 financial yearwere in evidence. Each of these waprepared during 2019. The balance sheetthe subject of those auditwere also apparently in evidence. The audit report for the 2019 financial year and a signed balance sheet for that audit were also in evidence. The significance of the audited balance sheetithat these documentrecord the BW1, BOQ1 and BOQ2 accounts, the CommSec account (Main Portfolio) and the Residential Propertie(i.e., all the disputed assets) aassetof the FSF aof 30 June 2016, 30 June 2017, 30 June 2018 and 30 June 2019.

399    Financial recordof the FSF were tendered in evidence without objection by the appellantand by the respondent. Accordingly, the primary judge received any previourepresentationin those documentand waentitled to give them such probative weight ahe considered appropriate in the circumstances. The primary judge characterised previourepresentationcontained in businesrecordand other documentprepared after 20 July 2018 where the person who had or might reasonably be supposed to have had personal knowledge of the asserted fact waone of the appellanta“self-serving” (Liability Judgment at [226], [231][232], [244], [255]). Where the date of preparation of such documentwanot known, the primary judge characterised the previourepresentationapotentially “self-serving” (Liability Judgment at [248]). The primary judge afforded little or no weight to the documenthe characterised aeither “self-serving” or “potentially self-serving” (Liability Judgment at [244]).

400    The primary judge considered the balance sheet aof 30 June 2019 to have been a document prepared by MrFrigger after the commencement of the proceedingand “likely to be self-serving”. Ato what the primary judge meant by self-serving hiHonour said (at [227]):

I interpolate here that, anoted in Frigger (No 2) at [79], MrFrigger took objection to the description of documentaself-serving, ashe understood it to mean that they were forged or otherwise fraudulent. But it doenot necessarily mean that. Describing a document aself-serving isimply an application of the common sense principlewhich Banks-Smith J summarised in Australian Securitieand InvestmentCommission v Big Star Energy Ltd (No 3) [2020] FCA 1442; (2020) 389 ALR 17 at [43]:

A court iplainly able to evaluate the weight or cogency of the material contained in documentand draw relevant inferences. For example, it iopen to take into account the absence of any cross-examination or testing of the evidence. It iopen to take into account the atmosphere or context in which a document iprepared that might cause it to be self-serving: Vitali v Stachnik [2001] NSWSC 303 at [12] (Barrett J). Also relevant ithe nature of the document and whether it ia 'canonical businesrecord' to which 69 of the Evidence Act idirected or something created with, for example the purpose of persuasion: Australian Competition and Consumer Commission v Air New Zealand (No 7) (2013) 209 FCR 361; 301 ALR 392; [2013] FCA 83 at [23] (Perram J). …

401    Therefore, the focuof the primary judge’reason for characterising documenta‘self-serving’ wathat at the time the documentwere prepared the proceedingwere contemplated or it waotherwise then in the appellants’ interestfor the disputed assetto be recorded aassetof the FSF. The primary judge indicated that he wanot using the expression ashort-hand for documentthat would not be admissible under 69(3) of the Evidence Act or under common law principles. Rather, he wadescribing ‘common-sense’ principlefor attributing little or no weight to hearsay in a document based on the atmosphere or context in which it waprepared or the nature of the document in question.

402    Regardlesof the purpose for which the FSF balance sheetwere prepared, any financial recordcoming into existence after the sequestration orderwere made purporting to record the disputed assetaassetof the FSF were likely to be ‘self-serving’ in accordance with the common-sense principleto which the primary judge referred. After the sequestration orderwere made, and particularly after the dispute between the partieas to what assetwere personal assetof the appellantcrystallised, any person in the position of the appellanthad an incentive to create financial recordthat were consistent with their case below and that identified the disputed assetaassetof the FSF. It wanot necessary for litigation to be on foot or contemplated for that incentive to be present. The incentive arose asoon athe appellantwere made bankrupt. Therefore, in accordance with the common-sense principleto which the primary judge referred he waentitled to afford little weight to previoustatementin documentprepared after 20 July 2018 irrespective of the notional purpose for which the document came into existence. He waalso entitled to afford previoustatementin documentof an unknown date little or no weight for the same reason.

403    It ialso important to appreciate that the weight of previourepresentationin documentwhere MrFrigger might reasonably be supposed to have been the source of the asserted fact waalso affected by the primary judge’conclusion that MrFrigger wanot a witnesof truth. Thus, in the case of documentof that type, the common-sense self-serving approach to weight the primary judge took waall the more justified because the source of the asserted fact waa witneswho the primary judge had found wanot credible.

404    Leaving to one side the question of weight, there ia further question of what inferenceor findingof secondary factmay be made aa result of an assertion of fact contained in a balance sheet of the FSF or other document to the effect that particular identified property ian asset of the FSF. The mere fact that an asset irecorded in a balance sheet doenot, in the absence of other evidence, lead to an inference that all actin the world necessary to render that property an asset held on trust for the benefit of the memberof the FSF have been taken.

405    A balance sheet ia summary of transactionthat are considered by the trusteeof the FSF to have been transactionrelating to the FSF during or prior to the financial year to which the balance sheet relates. It may be inferred from a balance sheet that the bookand recordof the FSF contain documentor statementof a person with personal knowledge of the factthat record the individual transactionthat comprise the property identified in the balance sheet aassets. It may also be inferred that the trusteeof the FSF have, at some time before the preparation of the balance sheet, made a decision and determined that the individual and collective transactionare to be treated atransactionof the FSF. However, without more, an inference doenot arise that all necessary stephave been taken to render the treatment or allocation of the asset in the financial statementof the FSF legally effective. Thus, without more, the mere allocation of an asset in a balance sheet aan asset of the FSF ino more than bare assertion of that fact.

406    Here, in substance, the appellantcontend that the balance sheetare more than bare assertion because the financial statementof the FSF have been audited and apparently found to be compliant in accordance with the superannuation and taxation legislation. The inference that might be drawn from these matterithat recordof historical transactionconsistent with the allocation of the assetin the balance sheet exist. If so, these documentwere not tendered in evidence.

407    The appellantsubmitted that the primary judge’conclusionthat the balance sheetwere “self-serving” were tantamount to findingthat the appellanthad committed “tax fraud” because the appellantatrusteeof the FSF were obliged to prepare financial statementand tax returnand have these audited under the provisionof the SIAct, SIRegulationand ITAA 1997. The appellantalso submitted that only the ATO (athe applicable regulator) hastanding pursuant to 253 of the SIAct to monitor the FSF and itapproved SMSF auditor, to apply to the court for an order and to certify that that the trusteehad failed to comply with the SIAct. The appellantcontended that primary judge’finding that the FSF recordfailed to comply with prescribed standard, in circumstance where the ATO (289(2) SIAct) hanot certified such a failure to thicourt, ia nullity.

408    The premise underlying the appellants’ submissions, that the primary judge had made a finding that the financial statementand tax returnof the FSF were non-compliant with the SIAct, iincorrect. The primary judge made no such finding. Aexplained earlier in these reasons, the primary judge attributed no weight to financial statementand tax returnprepared after the sequestration orderadopting a common-sense approach to ‘self-serving’ documentin that the appellanthad an incentive to prepare documentconsistent with their case before the primary judge after the sequestration orderwere made.

409    That audit reports, balance sheetand tax returnwere prepared for the purposeof ‘compliance’ with the SIAct, SIRegulationand ITAA 1997 doenot affect the primary judge’viewabout the weight of previourepresentationin those documents. After the sequestration orderwere made, the appellanthad the same incentive to persuade the auditor and regulatorthat assetwere assetof the FSF athe appellanthad to persuade the respondent and the Court of those matters. Affording little or no weight to these documentdoenot equate to a finding of ‘fraud’ or that the documentwere falsely prepared or inaccurate. It isimply a common-sense reason for discounting the weight of previourepresentationin the documents.

410    The second aspect of the appellants’ submissions, that the ATO haexclusive authority to determine if there habeen compliance with the SIAct, ialso incorrect. Section253 and 289 of the SIAct fall within Part 25 of that Act which dealwith monitoring and investigation. Section 253 setout the objectof Part 25 which include to ensure that the Regulator (ASIC, APRA or ATO, aapplicable) hasufficient power to monitor and investigate superannuation entities, approved SMSF auditorand auditof self-managed superannuation funds.

411    Section 289 sitin Part 25 Division 7 which dealwith offences. The provision confera discretion on the Regulator to certify that a person hafailed to comply with a requirement of the SIAct. The discretion ienlivened “if the Regulator isatisfied that a person has, without reasonable excuse, failed to comply with a requirement made under [the SIAct]”. If the Regulator doeso, the Court may inquire into the case and may order the person to comply with the requirement aspecified in the order.

412    Section 289 ia provision that the Regulator may utilise to obtain compliance with the requirementof the SIAct. The Regulator inot obliged to utilise the provision and it certainly doenot place any limit on the power of thiCourt to inquire into questionof fact for the purpose of determining if a declaration should be made under 30 of the Bankruptcy Act or 21 of the FCA Act.

413    Athe power of the Regulator to certify a failure to comply idiscretionary, the absence of a certificate doenot infer that the Regulator haor hanot been satisfied of a non-compliance with the requirementof the SIAct. The Regulator may be satisfied that there habeen non-compliance, but there ireasonable excuse. The Regulator may be satisfied that there habeen non-compliance without reasonable excuse, but hadecided not to exercise the power under 289(2). Further, the absence of a certificate provideno evidence of what, if any, monitoring or investigationthe Regulator haperformed in respect of the FSF.

414    For all the above reasons, that the appellantmay have succeeded in persuading the auditor and Regulator that the FSF financial statementand tax returnfor certain financial yearwere compliant with the SIAct provideno groundfor attributing greater weight to these documentor considering that in some way the absence of regulatory action demonstratethe veracity or truth of the factasserted in them.

415    Ato the audit report for the 2019 financial year, the primary judge said (at [228]–[229]):

[228]    There ialso an unqualified auditors' opinion on the 2019 balance sheet in evidence (Ex 37, Ex 38). The auditor opinethat the financial report presentfairly the financial position of the fund. But I place little weight on that. The source of the auditor'information must have been MrFrigger, at a time when she waconcerned to establish that all the disputed assetwere FSF assets. Also, I doubt the thoroughnesof the audits. I say that without intending to criticise the auditors. It would appear that the scope of their engagement wavery limited. In a submission (contained in affidavit ACTF 2 sworn 8 May 2019 at para 5) MrFrigger said that the FSF 'irequired to engage an independent auditor to verify all assetand income of the FSF in order for the fund to continue to be complying and obtain tax benefits'. But the evidence ato the modest feecharged by Just SMSF Auditsuggestthat no extensive audit of the basion which assetwere said to be part of the FSF waconducted. For example, the deduction claimed in the 2019 annual return for the FSF for auditors' feewa$440 (Ex 39). In 2016 it waonly $330 (KAT 4 p 389). That makeit unlikely that the auditorconducted any thorough review and verification of the assetof the FSF.

[229]    In light of that, the fact of an unqualified audit report on the 2019 balance sheet cannot, with respect to the auditors, give the court any comfort that the balance sheet icorrect. If the applicantare unable to establish to the court'satisfaction on the basiof all the evidence that the disputed assetare FSF assets, then it idifficult to know how they have convinced the auditorof that (if they did). It inot clear that the auditorhad any evidence that inot before the court and if they did, the court could not rely on their hearsay opinion about it. The question of whether an asset ipart of the FSF ia matter of the application of the law to the evidence and not a matter of accounting, so the audit report can add nothing to the court'own consideration of the issues. That iall the more so since nobody involved in the audit hagiven evidence.

416    There walittle evidence from MrFrigger concerning the context and circumstancein which the audit reportand balance sheetof the FSF were prepared. Ato the audits, neither Mr Baghdassian nor MWee gave evidence at the trial. Therefore, there wano evidence from them to explain the audit performed, the recordreviewed or the factupon which the opinionexpressed in the audit reportwere based.

417    Regarding management of the FSF, the primary judge made the following observation(Liability Judgment at [174]):

MrFrigger'evidence, which I accept ainherently probable, ithat from itinception she and Mr Frigger managed the FSF and made all investment decision(ACTF 1 para 10; ACTF 18 para 23). I also accept her evidence that Mr Frigger hamanaged the Main Portfolio, although whether he did so atrustee of the FSF, or on behalf of the trustee(s), or on behalf of he and MrFrigger in their personal capacities, ia separate question. I also accept that MrFrigger, aa qualified accountant, managed all accounting recordof the FSF, attended to the banking of income and capital, and prepared and sent out invoiceto tenantof investment propertie(whether FSF assetor not). MrFrigger procured the required annual auditof the FSF, although, awill be seen, there ino specific evidence of any audit having been conducted before the sequestration order. She attended to the filing of income tax return(t223 ln 30, 228 ln 10).

418    With the exception of an electronic lodgement declaration for the tax return for the FSF for 2016 financial year, which the primary judge accepted walodged with the ATO some time before 6 April 2017 (Liability Judgment at [257]), the primary judge wanot satisfied that any of the evidence established that any balance sheet or tax return of the FSF that wain evidence waprepared before 20 July 2018 (the date the sequestration order wamade).

419    Anoted above, the audit reporttendered in evidence for the 2016, 2017 and 2018 financial yearwere all prepared in 2019. The primary judge inferred that the auditorprepared the audit reporta short time after receiving the accountto be audited” (Liability Judgment at [231]). The primary judge also found that it wainherently likely that the documentsubmitted to the auditor were produced a short time before they were submitted. Further, that it walikely that the audited balance sheetwere generated after the sequestration order” (Liability Judgment at [231]). The primary judge concluded that all these balance sheetwere likely prepared after 20 July 2018 and, therefore, likely to be self-serving (Liability Judgment at [232], [239], [240], [243]).

420    The primary judge noted other concernwith respect to the reliability of the balance sheetfor the 2016, 2017 and 2018 financial years.

(1)    There were two versionof the 2016 balance sheet that made no mention of BW1 aan asset of the FSF. A further comparison balance sheet, which included BW1 aan asset of the FSF, wanot audited, waof an unknown date and had widely fluctuating BW1 balance(Liability Judgment at [241]–[242]).

(2)    There were two versionof the 2017 balance sheet in evidence. In one version, BW1 iidentified aa FSF asset. In another version there ia reference to ‘Retirement Advantage Account’ in three separate places, but inot clear if that ia reference to BW1. One of the balance sheetwaa ‘working paper’. Regardlesof which balance sheet wa‘correct’, the auditor’report for the 2017 financial year waheavily qualified. These included complaintof unanswered requestfor further information (Liability Judgment at [237]).

(3)    There were two versionof the 2018 balance sheet in evidence. Each balance sheet recorded different assets. The audit report for 2018 waalso qualified by a statement to the effect that there were unanswered requestfor further information (Liability Judgment at [233]–[234]).

421    The primary judge then concluded (Liability Judgment at [241]):

The applicantsought to counter thiby referring to a balance sheet for 2017 which contained comparison figurefor 2016 which do refer to BW1 (KAT 4 p 416). But the purpose and time of preparation of that version of the 2017 balance sheet iuncertain, aiwhether it waaudited. It would appear that it iunlikely that it waaudited, since it appearthat the different balance sheet I have just described waaudited (in 2019). There ino basito prefer the comparison figurebalance sheet to the apparently audited balance sheetjust mentioned.

422    We do not consider the primary judge made any error in according little or no weight to assertionof fact contained in financial documentof the FSF where those documentwere prepared after 20 July 2018 or at an unknown time. In those circumstances, the balance sheetcould not be relied upon aevidence of the fact of historical transactionof the FSF allocated to it or recorded in itfinancial recorded before the balance sheetwere prepared for the audit. No inference arisefrom established factthat a legally effective transaction by which the disputed assetbecame assetof the FSF took place before 20 July 2018. Nor are these documentevidence of an objective act of the trusteeof the FSF consistent with an intention to hold the asseton trust for the FSF performed before 20 July 2018. At most, these documentprovide some evidence of ratification after 20 July 2018 of transactionentered into before 20 July 2018.

Taxation returns

423    The appellantcontend that an objective manifestation of an intention to exercise the trustees’ power to accumulate income of the FSF and utilise that income to acquire the fundin the BOQ1 and BOQ2 accountand securitiein the Main Portfolio waevidenced in the FSF tax returnfor the 2016, 2017 and 2018 financial years. The appellantalso contend that the tax returnfor these financial yearrecord the Residential Propertieaassetof the FSF.

424    Ato the Main Portfolio, the appellantalso contend that the tax returnevidence that the Commissioner of Taxation accepted that the securitiein the Main Portfolio were assetof the FSF because the trusteeof the FSF claimed franking crediton securitieheld in that portfolio and refundof income tax were paid to the trustee(into the BW1 account) for the FSF. The appellantcontend that the evidence demonstrated that refundwere paid to the FSF before the sequestration orderwere made and, therefore, TFN must have been provided to the registriefor the Main Portfolio securitieand the Commissioner of Taxation in respect of securitiein the Main Portfolio before the sequestration orderwere made.

425    In support of these contentions, the appellantcontend that tax returnwere lodged with the ATO before the sequestration orders. In that respect, the appellantrely on an ATO accounttransaction report. As already noted, that document inot received in the appeal afurther evidence.

426    In any event, the primary judge accepted that the tax return for the FSF for the 2016 financial year that wain evidence walodged with the ATO and it walodged some time before 6 April 2017 (Liability Judgment at [257]). However, the primary judge waof the view that the document waof no assistance to the appellantfor the following reason(Liability Judgment at [256]):

It showthe account detailof BW1 athe account for the destination of tax refundfor the FSF (KAT 4 p 387). It listcash and term depositof $3,177,000, listed shareof $931,114, and non-residential real property of $9,268,000 (KAT 4 p 395). It doenot break any of these numberdown so it inot possible to tell what accountmade up the cash balance. Also, the amount for cash and term deposits, curiously, iin a different font to the other amounts, suggesting that it may have been entered at a different time to those other amounts. So thiannual return provideno clear evidence ato what were the assetof the FSF aat 30 June 2016.

427    For reasonthat are given later, we are of the view that it ipossible to identify the assets, other than BW1, referred to in that tax return. However, the document and any balance sheet in evidence that could be the source of the information contained in it, remainunreliable. Therefore, the primary judge wanot in error for concluding that the document provideno clear evidence ato what were the assetof the FSF aat 30 June 2016” (Liability Judgment at [256]).

428    The primary judge placed no weight on the tax return for the 2017 financial year that wain evidence. Regarding that document, the primary judge said (Liability Judgment at [252][254]).

[252]    There ian ATO SMSF annual return for the year 2017 in evidence (KAT 1 p 43; KAT 4 p 153; ACTF 14 p 107). It wasubmitted by MrFrigger to the Official Trustee on 27 July 2018 - that is, seven dayafter the sequestration order. In a covering email to the Official Trustee, MrFrigger said the annual return showed that aat 30 June 2017 the FSF had more than $2 million in cash and term deposits. She acknowledged in cross-examination that she submitted it to the Official Trustee in order to persuade him that BOQ1 should be unfrozen because it waan FSF asset (t258). It showthe account detailof BW1 athe account for the destination of tax refundfor the FSF (KAT 1 p 44). It also showunder the heading 'Assetand liabilities' cash and term depositof $2,085,456, although it doenot break down where these depositare held. That imuch lesthan the total amountshown in bank statementaat that time for St George, Bankwest and Citibank accountappearing in a version of the balance sheet aat 30 June 2017 (KAT 4 p 414). Also, the annual return showa total value of assetof the FSF of $5,980,228, significantly lesthan other valuewhich can be found in the evidence.

[253]    In any event, it inot clear that thiannual return waever submitted to the ATO, or if so, when. MrFrigger pointed to a tax refund received on 31 July 2018 (KAT 4 p 533) but that amount doenot correspond to the refund amount in the return (KAT 4 p 159) which suggestthat thiversion of the return wanever lodged. It waprovided to the Federal Circuit Court, in an affidavit dated 3 August 2018, in proceedingshortly after the sequestration order in support of an application for an injunction against the Official Trustee (t228; ACTF 14 p 107). In cross-examination in thiproceeding, MrFrigger confirmed that thiversion of the annual return watrue and correct aat the time of the affidavit (t229-231). But then she acknowledged that it wanot the only version of the 2017 annual return that had been prepared and that it could have been wrong (t230-232). She sought to explain that she had not provided thicopy of the 2017 annual return to the Federal Circuit Court for the purpose of establishing the balance of assetheld, but solely to persuade it that BOQ1 should be unfrozen (t233, 258). She acknowledged that the 2017 annual return did not include the proceedof the sale of the Armadale land and BP Businesin which the FSF (she said) had an interest, and she said that the figure in the annual return for listed shares, $344,939, wanot a true and accurate reflection of the value of the FSF'share(t237-238; t285; cf. KAT 4 p 941). In closing submissionMrFrigger said that thiversion of the annual return wa'an incomplete copy' (t934), even though she had submitted it to the Official Trustee to persuade it to remove the freeze on the bank accounts.

[254]    Also, the 2017 annual return saythat the audit of the FSF had been completed on 25 August 2017 when, ahaalready been indicated, in fact the audit for that year wacompleted in March 2019 (see [62] above).

429    The appellantsought to rely on another version of the 2017 tax return. That version waan exhibit to MrFrigger’affidavit of 17 September 2020. The primary judge refused the appellantleave to re-open to tender that document in evidence. The appellantapplied to have it received afurther evidence in the appeal. We have already explained that the document inot received in the appeal afurther evidence on ground2, 3, 4 or 5 of the re-amended notice of appeal.

430    In any event, the document doenot assist the appellants’ case, even when read with the ATO accounttransaction report. While the ATO accounttransaction report providean explanation for the amount of the refund received on 31 July 2018 ($3,253.34), the amount recorded for the refund for the 2017 financial year ($18,591.00) inot the same athe amount claimed athe refund in the alternative version of the 2017 tax return ($16,766). Therefore an inference doenot arise that the alternative version of the 2017 tax return wathe tax return that walodged with the ATO on 26 July 2018. Accordingly, while the ATO accounttransaction report may demonstrate that a tax return for the FSF for the 2017 financial year walodged on 26 July 2018, an inference doenot arise that the tax return lodged on that date wathe version that the appellantsought to tender at trial and sought to rely on afurther evidence in the appeal.

431    Additionally, the amountrecorded for unfranked and franked dividendand for franking creditin the alternative version of the 2017 tax return are not the same athe amountrecorded in the CommSec 2017 financial year summary for the Main Portfolio, which were all substantially lesthan the amount claimed in the tax return. Likewise, the amountrecorded for these itemin the 2017 tax return that wain evidence were not the same and substantially lesthan the amountrecorded in the CommSec financial year summary. There wano explanation in the evidence for the difference.

432    Therefore, none of these documentreveal any error in the primary judge’ conclusion that the 2017 tax return that wain evidence wanot the document lodged with the ATO on 26 July 2018. These documents also do not demonstrate that the alternative 2017 tax return, that wanot in evidence, walodged with the ATO on 26 July 2018 and that return waconsistent with the appellants’ case.

433    There were two versionof the tax return for the 2018 financial year in evidence: a handwritten version and digital version. The primary judge placed no weight on either document. The primary judge summarised the evidence and gave hireasonafollow(Liability Judgment at [245]–[251]):

[245]    The applicantrelied on an annual return for the FSF for the year 2018, which appearto have been submitted to the ATO (ACTF 1 p 187). Thiia form with handwritten entriealthough, oddly, there ialso one typewritten entry that appearto have been added to the pdf version of the return that appearin the affidavit (p 189). The document containfigurewhich, for some asset categories, are approximately equivalent in value to the assetin the balance sheet for that year which also appearin ACTF 1, but are otherwise unparticularised (ACTF 1 p 186). The total value of assetshown i$8,758,779 (ACTF 1 p 202). Cash and term depositof $2,900,683 are shown, which ivery approximately similar to the $2,979,708.24 total shown in the balance sheet for BW1, the BOQ account and a St George term deposit of $80,000. Listed shareare valued in thi2018 annual return at $2,521,581, significantly more than the $344,939 in the apparent annual return for the previouyear (see below).

[246]    But apart from those discrepancies, the balance sheet for June 2018 in the same affidavit showtotal assetof $12,493,388. An apparently audited balance sheet in MrFrigger'affidavit ACTF 18 sworn 17 June 2020 showa similar figure of $12,452,614.11. In both cases, the figure shown imore than $3.5 million greater than the figure in the annual return. These wide variationcast doubt on the reliability of the annual return and the balance sheetalike.

[247]    There are other numberfor the value of the assetof the FSF in evidence which vary widely and do not enhance the reliability of the applicants' evidence. In a letter dated 17 August 2018 sent to the Official Trustee the applicantclaimed that the assetof the FSF were worth $25 million (KAT 1 p 90). In cross-examination MrFrigger admitted that thiamount agiven to the Official Trustee wa'obviously wrong' (t279 ln 44). Later, however, she sought to explain it aa 'rule of thumb' calculation which included a figure of between $12 million and $13 million for the Hobart property based on a figure the applicantreceived from the real estate professionalCBRE (not a formal valuation) (t463, 472, 474). And yet, in a trustee declaration of the market value of the Hobart property aat 30 June 2018, which appearto have been given to the auditor in March 2019, the applicantsaid that it waworth $2,725,725 (KAT 4 p 429). Also, one of the alleged balance sheetfor that year valuethe Hobart property at $1,362,537.50 (ACTF 1 p 186).

[248]    The first respondent pointto yet more reasonwhy the annual return for 2018 iunreliable. The handwritten version of that document that I have been discussing namea Maria Olivotto athe auditor (ACTF 1 p 188). In cross-examination, MrFrigger said that in fact that person never conducted an audit of the FSF and had not been engaged to do so (t257). She claimed, without any convincing explanation or rationale, that a different auditor had asked her to put Maria Olivotto'name on the annual return (t257). Also, significantly, there ianother document in evidence purporting to be the annual return for 2018, but thione icomprised of entriein a computerised form, not handwritten entrieon a paper form, and showa different name for the FSF'auditor (KAT 4 p 401). The total value of the assetof the FSF shown in thiannual return i$12,493,386, about $3.7 million more than the amount shown in the handwritten version and closer to the balance sheetI have considered above (KAT 4 p 407). Furthermore, the account detailprovided in thiversion of the annual return are not those of BW1; the account number matchea Citibank account that will be discussed further below in connection with the Edward Street property. But the document itself appearto show that it waprepared on 12 September 2018 (see KAT 4 p 401). That meanthat it walikely to have been prepared at a time after the sequestration order wamade and so any weight to be put on it idiminished by the likelihood that it waself-serving.

[249]    MrFrigger sought to explain the different versionof the 2018 annual return that are in evidence by saying that when she prepared the handwritten version she wanot sure whether to include certain assetbut when she spoke to the auditor she watold she did need to include them (t463). Thiivague and given my findingabout MrFrigger'credibility I give it no weight. If anything, it only confirmthat she wawilling to change recordathe occasion suited and to put potentially unreliable recordbefore the court.

[250]    Also, the date on the handwritten 2018 annual return ishown a18 July 2018, just before the sequestration order. But there ian email from MrFrigger to the Official Trustee dated 27 July 2018 in which she sayshe i'currently working on the 2018 annual return' (KAT 1 p 40). MrFrigger had no good explanation for thiin cross-examination and conceded that thiversion of the 2018 annual return may not have been the one she wagoing to lodge with the ATO (t272-274). That it wanot tendto be confirmed by a submission that MrFrigger made in closing: that the different, typewritten version of the annual return in KAT 4 at p 401 had been submitted to the ATO because a refund in the amount shown on the annual return had been received before 27 September 2018 (which wathe opening date of an ATO statement in evidence, Ex 40). But she waunable to produce evidence of the amount of the refund; while there are some bank statementfor that Citibank account in evidence, none of them show any tax refund. So there ino way of knowing whether it corresponded to thiversion of the annual return. I do not accept MrFrigger'implicit assertion (in submissionand not under oath) that it did (see t930 and Ex 40).

[251]    For these reasons, and in the context of my view that MrFrigger inot a witnesof truth, I place no weight on either the handwritten 2018 annual return, or the digital version.

434    Awith the 2017 tax return, the ATO accounttransaction document doenot assist the appellants. The amount of the refund ($33,625.00) ithe same athe amount claimed for a refund in the digital version of the 2018 tax return. However, while it may be inferred that the digital version of the 2018 tax return walodged with the ATO on 26 September 2018, no inference arisethat the tax return waprepared any earlier than 12 September 2018 (the date of that document). Therefore, the document doenot reveal any error in the primary judge’conclusionabout the date upon which the tax return for the 2018 financial year waprepared.

435    Again, the unfranked dividendand franking creditrecorded in the 2018 tax returnare not the same and are substantially higher than the amountrecorded for unfranked dividendand franking creditin the CommSec financial year summary for 2018 for the Main Portfolio. Again, there wano explanation for the difference in these amountin the evidence. Therefore, there waan unexplained inconsistency between the amountclaimed in the 2018 tax return and the amountrecorded in the CommSec financial year summary for dividendand franking creditconcerning the Main Portfolio.

436    Ato the tax return for the 2019 financial year, the primary judge accepted that it walodged with the ATO on 12 August 2020. However, hiHonour placed no weight on that annual return because he considered it to be self-serving ait waprepared two yearafter the sequestration orderwere made and during the proceedings. HiHonour considered that the ATO’acceptance of the tax return wanot evidence that the ATO had any regard to the list of assetwhen determining whether to pay the income tax refund claimed (and paid) in the return or that the ATO in some way verified the list (Liability Judgment at [244]).

2016 tax return

437    Anoted above, the primary judge accepted that the tax return for the FSF for the 2016 financial year walodged before 6 April 2017 (Liability Judgment at [257]). That is, it ia document that hiHonour found came into existence before 20 July 2018.

438    The 2016 tax return iof significance because the figurerecorded in it for the value of commercial property, securitieand residential property correspond to the valuein some versionof the 2016 balance sheetthat were in evidence. For the reasonwhich follow, if that document ithe correct version of the tax return lodged before 6 April 2017, then that document, taken with other documentin evidence providesome evidence that the trusteeof the FSF treated the Main Portfolio and Residential Propertieaassetof the FSF aof 6 April 2017.

439    However, the respondent submitted during the appeal that the tax return in evidence wanot the tax return lodged with ATO. That is, the primary judge’conclusion (Liability Judgment at [257]) wawrong. In our view, while the primary judge wacorrect to conclude that a tax return had been lodged before 6 April 2017, for reasonthat follow, there igood reason to doubt that it wathe version of the 2016 tax return in evidence. Accordingly, in our view, the primary judge wanot wrong to disregard the document or for considering it to be unreliable because figurefor the assetrecorded in that document are incorrect and do not correspond completely with any balance sheet that wain evidence.

440    There are a number of observationto be made about the contentof the 2016 tax return document.

441    Section H recordassetand liabilities. The figure for item A of the 2016 tax return (listed trust) i$104,542. Athe primary judge observed (Liability Judgment at [256]), item E (cash and term deposits) irecorded a$3,177,000 and “curiously” in a different font to all other amountlisted in the document. The figure for item H (listed shares) i$931,114. The figure for item K (non-residential real property) i$9,268,000. The figure for item L of the 2016 tax return (residential real property) i$625,000. The figure for item U of the 2016 tax return (total Australian and overseaassets) i$14,105,656. The figure for item Z (total liabilities) i$10,928,656.

442    Section F - G recordmember information. The 2016 tax return recordfour memberof the FSF. The closing account balancefor each of the member(liabilities) irecorded as:

Jessica Frigger        $94,179;

Michael Frigger    $67,986;

Angela Frigger    $5,633,399; and

Hartmut Frigger    $5,133,152.

The total of these amounti$10,928,656. That figure correspondwith the total liability figure in Section H. (We also note that the font idifferent for the figurerecording Mr and MrFriggers’ contributionin thisection.)

443    The difference between total assetand total liabilitieis, again curiously, $3,177,000 ($14,105,656 minu$10,928,656). In all other tax returnfor the FSF in evidence, total assetare equal to total liabilities. Further, total liabilitiein all tax returnare comprised of the closing account balancefor the memberof the FSF.

444    There were three versionof the balance sheet for the FSF aof 30 June 2016 in evidence. In one version, figurefor total assetand total liabilitieof the FSF are both recorded a$13,910,583.02. That inot the amount athat recorded in the 2016 tax return. In a second version, the figurefor total assetand total liabilitieare both recorded a$10,928,656. Therefore, the figure for total liabilitiein the second version of the balance sheet correspondto the total liabilitiein the 2016 tax return. However, the balance sheet figure for total assetinot the same athe 2016 tax return figure. It i$3,177,000 lesthan the amount recorded in the 2016 tax return.

445    The second version of the 2016 balance sheet identifiethe Platinum Trust aan asset of the FSF in the amount of $104,542. That amount correspondwith Section H item A (listed trusts) of the 2016 tax return.

446    The second version of the 2016 balance sheet, recordtwo figures, both in the amount of $465,557 for ‘CommSec share portfolio’. The sum of these amounti$931,114 which correspondwith Section H item H (listed shares) of the 2016 tax return. A CommSec financial year summary for the Commsec account 270815 generated on 15 May 2018 identifying the value aof 30 June 2016 wain evidence. That document identified the value of the securitiein that account aof 30 June 2016 a$931,113.01. The CommSec share portfolio ithe Main Portfolio.

447    The second version of the 2016 balance sheet, identifiereal property at Edward Street, Perth ($859,524); Campbell Street, Hobart ($3,925,000); South West Highway, Armadale ($558,476); and another amount for Campbell Street, Hobart ($3,925,000) aassetof the FSF. The total of the sumfor each of those real propertiei$9,268,000. That amount correspondwith Section H item K (non-residential real property) of the 2016 tax return.

448    The second version of the 2016 balance sheet identifietwo other real properties, Union Street, Bayswater ($312,500) and Cale Street, Como ($312,500) aassetof the FSF. The sum of those amounti$625,000 and correspondwith Section H item L (residential real property) of the 2016 tax return. These are the Bayswater and Como propertieand the Residential Properties.

449    The amountrecorded in the second version of the 2016 balance sheet for assetthat could be categorised acash or term depositdo not correspond with the amount recorded in Section H item E (cash and term deposits) of the 2016 tax returns. That is, it inot possible to identify in what way, if at all, the figure in item E of the 2016 tax return icomprised based on the cash and term depositrecorded in the 2016 balance sheet.

450    The second version of the 2016 balance sheet containfigurefor liabilitieto the memberof the FSF that correspond with the member closing account balancerecorded in the 2016 tax return for those members.

451    Anoted above, the second version of the 2016 balance sheet recordthe property at South West Highway, Armadale aan asset of the FSF with a value of $558,476. The trusteeof the FSF sold that property during the 2016 financial year. The balance of the proceedfrom the sale of that property were paid into the BW1 account on 11 February 2016. That is, before 30 June 2016.

452    In the first version of the balance sheet, the Armadale property inot recorded aan asset of the FSF. However, it recordother assetidentified aComputer Accounting and Tax Pty Ltd in the amountof $1,178,403.21 allocated to pension phase for Mr Frigger and $1,543,000 allocated to the accumulation phase assetof the FSF. The sum of these amounti$2,721,403.02. It identifieaassetand recordthe same amountfor the other itemof non-residential real property and for listed trusts, listed shareand residential property airecorded in the 2016 tax return. The amountfor cash and term depositare the same afor the second version of the 2016 balance sheet. Again, it inot possible to identify an amount for cash and term depositthat correspondwith Section H item E of the 2016 annual return in the second version of the 2016 balance sheet.

453    There waa third version of the 2016 balance sheet in evidence. The third version icontained in a comparison between the 30 June 2017 and 30 June 2016 positions. In that document, there ianother and different breakdown of the assetof the FSF. In the third version, total assetand liabilitieare recorded a$14,963,430.69.

454    The third version of the balance sheet recordthe same itemand valuefor the CommSec share portfolio, Edward Street, Perth, Campbell Street, Hobart, Union Street, Bayswater and Cale Street, Como aare contained in the other two versionof the 2016 balance sheet. The difference between the other balance sheetand the third balance sheet ithat variouamountof cash are identified by reference to specific bank accounts. These are:

(1)    St George Bank term deposit $80,000;

(2)    BankWest T/D 0938897 $1,178,403.02;

(3)    BankWest T/D 0938897 $1,204,084;

(4)    BankWest 0914936 $341,275.47; and

(5)    BankWest 4767174 (BW1) $1,779,488.20.

These amounttotal $4,583,250.69. Again, the figurefor cash and term depositdo not correspond with Section H item E of the 2016 tax return.

455    Section B of the 2016 tax return recordincome. The figure for item J (unfranked dividends) i$6,111. The figure for item K (franked dividends) i$59,958. The figure for item M (grostrust distributions) i$8,361. Section D recordthe income tax calculation statement. The figure for item E (refundable tax offsets) i$25,688, the same figure afranking credits. The amount due or refundable, here refundable, i$25,429. These income figurecorrespond with the amountrecorded for unfranked and frank dividends, franking creditand trust distributionrecorded in the FSF balance sheet for the 2016 financial year. However, the figurerecorded in the CommSec financial year summary for 2016 are substantially different. These are: $24,512.37 for franked dividends; $6,110.68 for unfranked dividends; and $10,505.31 for franking credits.

456    The bank statementfor the BW1 account record that the ATO paid a refund into that account in the amount of $26,300.50 on 6 April 2017. Given the small difference ($871.50) between the refund recorded in the 2016 tax return ($25,429.00) and the refund paid ($26,300.50) and that there waevidence that the difference ($871.50) wasettled later, the primary judge waprepared to accept that the 2016 tax return in evidence walodged with the ATO before 6 April 2017 (Liability Judgment at [257]).

457    However, the document recording the settlement of the difference ia copy of an ATO income tax account statement for the FSF. It recordthat a client initiated amended tax return for the 2016 financial year waprocessed on 5 March 2019. Aa consequence, the trusteeof the FSF became indebted to the ATO for $871.50 which wapaid on 27 September 2019. That is, the trusteeof the FSF were required to repay part of the refund received on April 2017 aa result of lodging an amended 2016 tax return. Given that the FSF financial statementwere audited in January 2019, we infer that an amended 2016 tax return walodged after that audit. Further, the figurein the 2016 tax return recorded for franked and unfranked dividendand franking creditare not the same and are substantially lesthan the figurerecorded for dividendand franking creditin the CommSec financial year summary for 2016. In the appeal the appellant wanot able to point to any evidence before the primary judge that explained the differences.

458    In our view, it inot open to infer that the 2016 tax return that wain evidence walodged with the ATO before 6 April 2017. It imore likely that it or a version of it walodged in March 2019 or it inot the version that walodged with the ATO.

459    Our conclusion that the 2016 tax return that wain evidence wanot lodged before 6 April 2017 doenot assist the appellants’ case on appeal. Moreover, it doenot reveal that the primary judge wawrong to reject the 2016 tax return on the ground that it provided no clear evidence ato what were the assetof the FSF aat 30 June 2016 (Liability Judgment at [256]–[257]).

460    Again, the ATO accounttransaction document doenot assist the appellants. The document confirmthe factthat may be inferred from the documentthat were in evidence. A tax return for the 2016 financial year walodged on 31 March 2017. A refund of $26,300.50 wapaid on 6 April 2017. An amended tax return walodged on 5 March 2019. Aa consequence, an amount of $871.50 wadebited to the FSF account. That amount wapaid on 27 September 2019. None of these factgive rise to an inference that the 2016 tax return that wain evidence waprepared and lodged with the ATO before the sequestration order wamade.

461    Further, and in any event, aside from the evidence relating to the lodgement of two tax returnfor the 2016 financial year, there are other good reasonto doubt that the 2016 tax return that wain evidence ian accurate copy of the document alodged in 2017 or that, if so, it iaccurate and correctly reflected the assetand liabilitieof the FSF aat 30 June 2016. The reasonto doubt the accuracy of the assetlisted in the 2016 tax return are:

(1)    the matter of the different font for Section H item E suggesting that the figure at item E wacompleted at a different time to the balance of the document;

(2)    the matter of the total assetnot equalling total liabilitieand the difference being the same athe amount recorded in a different font at item E or cash and term deposits; and

(3)    the matter of the figure recorded for item K (non-residential real property) evidently including aan asset the Armadale property which wanot an asset of the FSF aof 30 June 2016.

462    Further, the only audit report in evidence for the FSF for the 2016 financial year waa report dated 11 January 2019. The balance sheet that corresponded to that audit wathe first, not the second, or third versionof the 2016 balance sheet. There wano direct evidence ato the time at which the first version of the 2016 balance sheet waprepared. The primary judge concluded that it waprepared a short time before 11 January 2019. Aa consequence, there wano reliable evidence of the FSF assetand liabilitieacorrectly recorded in itbookand recordbefore 20 July 2018.

463    In short, the primary judge made no error of law or fact in affording little or no weight to such factaare stated in or may be inferred from the 2016 tax return.

PPSR Registrations

464    The appellantcontend that the PPSR registrationconcerning the BW1 account and Main Portfolio that were in evidence before the primary judge are objective manifestationof an intention to hold the fundin the BW1 account and securitiein the Main Portfolio aassetof the FSF. The PPSR registrationin evidence were apparently made on 10 October 2017. Accordingly, these documentpre-date the sequestration orderand could not be considered ‘self-serving’ in any relevant sense for the purposeof the proceedingbelow.

465    The primary judge observed that the nature of the ‘security interest’ in the property the subject of the BW1 registration inot identified and, if anything, registration of a security interest iadverse to the appellantcase because it suggestthat the asset itself inot an asset of the FSF, but merely property in which the FSF haa ‘security interest’. Nonetheless, the primary judge accepted that it may be inferred from the documentthat, aat 10 October 2017, the appellanthad a wish to record some connection between BW1 and the FSF”. However, hiHonour waof the view that it fell “short of any manifestation of an intention that BW1 be held by the applicantsubject to the trustestablished by the FSF Deed. … Whatever the applicantthought they were going to achieve by lodging the registration, viewed objectively it simply doenot have the meaning they now seek to ascribed to it” (Liability Judgment at [281]). For similar reasons, the primary judge waof the view that the PPSR registration relating to the Main Portfolio waof no assistance to the appellants’ case (Liability Judgment at [373(4)]).

466    There wano error in the primary judge'reasons.

Tax File Number notifications

467    An email from Mr Frigger, apparently sent from MrFrigger’email account, to the Bank of Queensland dated 13 July 2018 wain evidence. The effect of the email wato notify the Bank of Queensland that the tax file number for the BOQ1 account wathat of the FSF.

468    The BOQ1 account waopened on 2 July 2018. A deposit of $2,519,597.42 wamade into that account on the same day. The primary judge did not accept that the notification of the TFN after the account waopened waevidence of an intention to hold the fundin that account on the trustof the FSF formed before the account waopened on 2 July 2018. Ato the question of whether notification of the TFN could be taken to be an objective manifestation of an intention to hold the fundon trust for the FSF after notification of the TFN, the primary judge after considering the applicable provisionof the FSF Trust Deed and legal principles, said (Liability Judgment at [360]–[368]):

[360]    Clause 33 also provides, however, that a contribution to the FSF 'may be made in cash, or by the transfer of assetin accordance with superannuation law'. While the use of the word 'may' suggestpermission, that sentence ipreceded by two sentencesaying how contribution'must' be made (see [163] above), so the provision aa whole ilaying down mandatory requirements. So to contribute the fundin BOQ1, the contribution would need to be made in cash (say, by the transfer of the fundfrom BOQ1 into an existing FSF bank account) or by transfer of the asset, that ithe account, in accordance with superannuation law. The FSF Deed doenot permit a member to make a contribution simply by declaring himself trustee of an asset, even if he ialready a trustee of the FSF.

[361]    It followthat for BOQ1 to be contributed to the FSF, all the trusteeof the FSF must have an ownership interest in it. Otherwise the asset would not be part of the fund of which they are acting atrustees. It would not have been transferred to them acontemplated in cl 33. Any intention to contribute an asset to the fund, viewed objectively in the context of the FSF Deed, must incorporate an intention for that transfer to occur.

[362]    Viewed objectively, there were several wayin which Mr Frigger could have intended to give effect to the requirement that BOQ1 be transferred. He could have declared himself alone atrustee over BOQ1 with immediate effect, with one of the termof the trust being an obligation to assign BOQ1 to himself along with all the other trusteeto be held on the termof the FSF. Or he could have effected the assignment immediately and simultaneously with the declaration of trust. Or he could have intended to make the necessary assignment at some later time.

[363]    Of course, raising that many possibilitieinvolvereading a lot into a simple email which notified a TFN against an account. That ithe problem. While the email may well expresan intention in broad termthat BOQ1 ito be an asset of the FSF, it itoo broad for the objective observer to understand how that wato be achieved, consistently with the FSF Deed and the complex web of lawsurrounding the FSF aa regulated superannuation fund with multiple trustees. That being so, the email doenot manifest with the clarity required by the authoritieany intention which had the immediate effect of contributing BOQ1 to the FSF.

[364]    The uncertainty doenot end there. I have described provisionof the FSF Deed which govern the amount that a member may withdraw on relevant eventsuch aretirement. That dependon the amount standing to the credit of the member'accumulation account: cl 104. That in turn dependon the extent to which contributionhave been made in respect of the member: cl 20.3. It waopen to Mr Frigger to make a contribution of BOQ1 not just in respect of himself, but also in respect of other memberof the FSF, hiwife and children: cl 38. The email of 13 July 2018, of course, saynothing about the memberfor whom the 'contribution' imade. That uncertainty ifundamental. It meanthat even if there waan expressed intention for BOQ1 to become subject to the trustof the FSF Deed, it would be unclear for whose benefit it ito be applied, by way of credit to members' accumulation accounts. That iuncertainty of objects, one of the 'three certainties' required for the creation of any trust. For reasonI have explained, that uncertainty would also be fatal to a contention that there waa contribution to an existing trust.

[365]    Further, in view of the uncertainty about the necessary transfer to the trustees, there would be no transfer, even in equity. BOQ1 ia debt owed by, or a chose in action held against, the Bank of Queensland: see Russell v Scott (1936) 55 CLR 440 at 450-451. If there waan immediate intention to assign BOQ1 to all the trusteeof the FSF, Mr Frigger would have needed to give it effect to it by complying with the requirementfor statutory assignment of such an asset that are found in 199(1) of the Property Law Act 1974 (Qld) or 20(1) of the Property Law Act 1969 (WA) (the proper law of the bank account iunknown, but nothing turnon that because the statutory provisionare in substance the same). Assuming that the bank'termand conditionpermitted such assignment (which ialso unknown), that would require an absolute assignment by writing under the hand of Mr Frigger, of which expresnotice in writing habeen given to the bank. Even if legislation about electronic transactioncan help supply the requirement for signature (see Electronic RentalPty Ltd v Anderson (1971) 124 CLR 27 at 42, but see further Electronic TransactionAct 2011 (WA) 10 and Electronic Transaction(Queensland) Act 2001 (Qld) 14), the ambiguity of the email meanboth that the requirement for an expression of an intention to assign, and the requirement for expresnotice to the debtor (the bank), are missing: see William Brandt'Son& Co v Dunlop Rubber Co Ltd [1905] 2 AC 454 at 462.

[366]    So Mr Frigger had not done everything that wanecessary for him to have done to transfer the legal title to BOQ1: Corin v Patton (1990) 169 CLR 540 at 559, 582. Athe first respondent submitted, if a voluntary transfer iintended to create a trust, the transfer must have occurred for the trust to be constituted. To the extent that any contribution of BOQ1 here waa voluntary gift (that is, for no consideration) it waineffective to pasan interest to the assignees, even in equity: Olsson v Dyson (1969) 120 CLR 365 at 368, 375-376, 380, 386, 394; cf. T Choithram International SA v Pagarani [2001] 1 WLR 1, a case where the necessary intention waexpressed much more clearly than Mr Frigger'email of 13 July 2018, and which in any event in thijurisdiction cannot supplant the authority of the two High Court casejust cited (see Cook v Cook (1986) 162 CLR 376 at 390). Being apparently voluntary, any purported contribution by Mr Frigger warevocable prior to the time when the requirementfor the gift were satisfied: Harding v Harding (1886) 17 QBD 442 at 444. It would have been open to the first respondent to revoke it upon Mr Frigger'legal and equitable interestin BOQ1 vesting in her atrustee in bankruptcy on 20 July 2018. The email of 13 July 2018 waineffective in equity to contribute BOQ1 to the FSF.

[367]    In summary, any case which the applicantmight have sought to articulate based on the email of 13 July 2018 having effect aa contribution of BOQ1 to the fund would have foundered at several points. It waunclear whether the contribution wato be effected by transfer to the trusteeof the FSF apart from Mr Frigger, and if so how that wato occur. Any such transfer would not have taken effect in equity. And, all that aside, the email could not have resulted in the creation of a trust on the termof the FSF in respect of BOQ1, because there wano certainty ato who the beneficiariein respect of that particular property were. So it did not have the result that BOQ1 became part of the conglomeration of property to which those trust obligationwere annexed: see Commercial Nominees. On the principleI have articulated, each of these problemmeant that BOQ1 would not have become part of the FSF.

[368]    As I have indicated, the applicantdid not articulate any submissionin relation to any of these matters. I have considered them for the purpose of seeking to discern the possible legal content of a case that habeen put to the court by non-legally qualified, self-represented litigants. No coherent case can be discerned. The email of 13 July 2018 doenot advance the applicants' position.

469    The appellantobjected to the admissibility of an email chain between MrFrigger and staff of the Bank of Queensland and, aa consequence, that correspondence waonly admitted for the limited purpose of establishing the respondent’state of mind and not to the truth of the matterstated in the emails. Therefore, the primary judge did not consider the extent to which notification of the TFN of the FSF to the Bank of Queensland in respect of BOQ2 wato be considered an objective manifestation of an intention to hold the fundin that account on trust for the FSF (Liability Judgment at [350], [369]).

470    The appellantalso contended that the correspondence with the share registriethat wain evidence before the primary judge demonstrated that the share registriewere informed of the tax file number of the FSF in respect of the securitieheld in the Main Portfolio before the sequestration orderwere made. The appellantcontended that the notification of the TFN ian objective manifestation of an intention to hold the securitieaassetof the FSF. Athe primary judge observed, the respondent made her own enquirieof the share registrieand tendered those communications.

471    Regarding communicationwith Advanced Share Registry, the primary judge concluded that the evidence did not establish when the TFN for the FSF waprovided to the share registry (Liability Judgment at [418]–[422]). Regarding communicationwith Automic Group, the evidence suggested the TFN waprovided on 12 September 2019 for many securitieand for otheron an unknown date (Liability Judgment at [423]–[428]). Regarding communicationwith Boardroom Pty Ltd, the evidence wainconclusive (Liability Judgment at [429]). Regarding communicationwith Computershare Investor ServicePty Ltd, the evidence did not establish when the TFN for the FSF were notified to the registry and otherwise suggested it waafter the sequestration date (Liability Judgment at [430]–[434]). Regarding communicationwith Link Market ServiceLtd, except for four securitiefor which the TFN wanotified on 19 February 2018, the evidence did not establish when the TFN for the FSF waprovided to that share registry (Liability Judgment at [435]–[437]).

472    The primary judge waalso not satisfied that the treatment of franking crediton dividendrecorded in tax returnestablished that the TFN for the FSF had been provided to the share registriebefore the sequestration orders. Athe primary judge had not accepted that the tax returnfor the 2017 and 2018 financial yearhad been lodged with the ATO, the submission based on those tax returncould not succeed. The tax return for the 2019 financial year did not establish that the TFN had been notified to the share registriebefore the sequestration order. While the primary judge accepted that the tax return for the 2016 financial year had been lodged, there wano evidence to establish that the dividendthe subject of that return were for the same securitieathose in the Main Portfolio aof the sequestration date (Liability Judgment at [438]–[445]).

473    We see no error in the primary judge’conclusionin thirespect. Further, awe have noted earlier in these reasons, none of the unfranked and franked dividendand franking creditrecorded in the CommSec financial year summariecorresponded with the amountrecorded for those itemin the tax returnthat were in evidence. Accordingly, that franking creditwere claimed and tax refundwere paid by the ATO, doenot give rise to an inference that the franking creditclaimed and refundpaid were in respect of securitieheld in the Main Portfolio.

474    Ultimately, the primary judge expressed hiconclusionabout the TFN notificationafollow(Liability Judgment at [452]–[454]):

[452]    Where there ino evidence that the FSF TFN for a security waever notified to the registry, the applicanthave failed to discharge their onuof proof in relation to that matter. Where the evidence ithat it wanotified after the making of the sequestration order, the notification provideno support for the contention that the ownership register recorded that the security waheld for the FSF at any time before the date of the sequestration order. Further, it cannot support any case to the effect that there waan objective manifestation of the necessary intention before that date, whether evidenced by some notation in the ownership registry or otherwise. By the time of the sequestration order, the notificationwere plainly self-serving, and not reliable evidence that there had been any manifestation of intention held before the bankruptcy. And aI have explained above, any such manifestation of intention occurring after the sequestration order could have no effect.

[453]    Afor the handful of FSF TFN notificationwhich do appear to have occurred before the date of the sequestration order, there ino evidence ato when the securitieagainst which the TFN wanotified were acquired, so the applicanthave not established that the notificationwere contemporaneouwith the acquisitions. So those notificationdo not support the applicants' case that the necessary intention waexpressed to the share registrieon acquisition. Nor do they show that the share registrierecorded the trustee capacity in which the sharewere allegedly held, at any time. The evidence summarised above indicatethat the share registriedid not know that the TFN given to them wathe TFN for the FSF in particular, or for any superannuation fund. The applicanthave not made out their case that notificationof the FSF TFN establishethat the share registriedid record that the securitiewere held by the applicantin their capacitieatrusteeof the FSF.

[454]    The applicantarticulated no case that notificationof the FSF TFN subsequent to acquisition of the securitie(but before the date of the sequestration orders) were manifestationof intention that were themselveeffective to make the securitiepart of the FSF adeclarationof trust or contributions. After all, their case wathat thihappened on acquisition. Awith BOQ1, the whole tenor of the case wathat the securitiehad been part of the FSF from acquisition. So it would be unfair to the first respondent to resolve the case on any different basis.

475    In thiappeal, the appellantsubmitted that notification of the TFN of the FSF to the Bank of Queensland and share registrieof the securitieheld in the Main Portfolio waevidence of an intention of the appellants, atrustees, to exercise the power to accumulate income in the FSF Trust Deed. For the reasongiven earlier, framing the factual question in that manner doenot affect the essential factual enquiry or the primary judge’conclusionthat the notification of the TFN to the Bank of Queensland wanot persuasive evidence of an objective manifestation of an intention to ‘hold’ the fundin the account or securitiein the Main Portfolio on trust under the termof the FSF Trust Deed. There wano error in the primary judge’approach or conclusionregarding the evidence concerning notificationof TFN to Bank of Queensland and share registries. In particular, we see no error in the primary judge’conclusion concerning the notification of TFN to Link Market Servicehe found were made before the sequestration orderrecorded in para[453]–[454] of the Liability Judgment quoted above. Further, on no view, iit evidence of a unanimoudecision of all co-trusteeto hold fundon securitieon trust for memberof the FSF.

BW1 account reconciliation

476    We have already noted that a key issue before the primary judge concerned identification (tracing) of inflowand outflowof fundfrom the BW1 account. The primary judge accepted that the Armadale property waan asset of the FSF (Liability Judgment at [292]). Further, based on the bank statementfor the BW1 account in evidence and other evidence, the primary judge said (Liability Judgment at [293]):

In summary, on the basiof those statementand the matterI have just described:

(1)    I proceed on the basithat both the Hobart property and the Edward Street property were assetof the FSF.

(2)    Much of the rent for the Edward Street property wapaid into an account with Citibank which may or may not have been an asset of the FSF. But there ino evidence of where the fundwent from there.

(3)    Some rent from the Edward Street property wapaid into BW1.

(4)    Most of the rent from the Hobart property wapaid into BW1.

477    While not the subject of evidence before the primary judge, he accepted certain factconcerning a BP Service Station businesoperated from the Armadale property not to be in dispute in the proceeding. Ato these facts, the primary judge said (at [297]):

From 15 September 2008 until 30 June 2009 the applicantoperated the BP Businesfrom the Armadale property. At that time, they say, the busineswain CAT'name. From 30 June 2009, it wano longer permissible under the SIAct for the superannuation trustee to operate the businesfrom the trust property. So from that time the applicantoperated the businesin their personal capacities, and executed a lease with CAT and (they say) paid rent to CAT atrustee. That wathe position until 11 February 2016, when the sale of the property and businesto a third party wacompleted. The businessale agreement for that transaction, which appearto be genuine, haa recital to the effect that Mr and MrFrigger are the legal and beneficial ownerof the busines(KAT 1 p 114).

478    After discussing the context of the BP Service Station business, the primary judge returned to a consideration of the BW1 account statementand made the following observation(Liability Judgment at [298]–[303]):

[298]    To return to the bank statementfor BW1, the statementfor the period January 2016 to September 2019 are annexed to affidavit KAT 4 (p 492). A summary of the transactionthey reveal follows, including my comment on the significance of the transactionfor the purposeof thiproceeding. The summary inot comprehensive, but it iindicative of the nature of most transactions.

[299]    The following categorieof transactionappear to be related to the BP Business:

(1)    Paymentfrom American Expres- these are likely to be receiptof the BP Business.

(2)    Paymentto E-Pay Australia and variouother merchant fee- I infer that these are expenseof the BP Business.

(3)    Large paymentto and from BP Australia, which are evidently connected with the BP Business.

(4)    Numeroupaymentfrom 'BusinesFuel … Fleet Card', Motorpass, Motorcharge and 'FI Card Merchant Settlement' - I infer that these are receiptof the BP Business.

(5)    Paymentfor 'Wages' - I infer that these are paymentto staff of the BP Businesathere ino suggestion in the evidence that at the relevant time the applicantoperated any other businesemploying staff.

(6)    Paymentmade for consumer itemsuch asoft drinks, ice, milk and newspaperor magazine- the amountinvolved are greater than would be required for household use, so I infer that these were itemsold in the BP Business.

(7)    A payment labelled 'Synergy BP'.

[300]    As one would expect, transactionof the kind summarised above cease at around February 2016, when the sale of the BP Businesapparently settled. Other categorieof transaction not obviously related to the BP Busineswhich can be observed throughout the period January 2016 to September 2019 are afollows:

(1)    Paymentfrom Officeworks, which I infer are rent for the Hobart property.

(2)    Paymentfor land tax and, apparently, rates, on the Hobart property.

(3)    A very large receipt on 29 May 2019 labelled 'Hobart' - I infer that thiithe proceedof sale of the Hobart property.

(4)    Paymentout to Mastercard or labelled 'Mastercard top up' - whether these are of a personal nature dependon the purpose for which the Mastercard waused. It doeappear to have been used to pay land tax on the Hobart property, although ahabeen mentioned, MrFrigger also said in evidence that it wafor personal expenses.

(5)    Rent from the Edward Street property - aI have indicated, I proceed on the basithat these were receiptfrom an asset of the FSF.

(6)    Paymentapparently received for rent from variouindividuals, not otherwise explained.

(7)    Large receiptand paymentthat can be explained apart of the flow of fundwhich ultimately end up in BOQ1 (e.g. 10 October 2017 and 12 October 2017; cf. KAT 4 p 894) - see the exercise depicted in Schedule 2 to these reasons.

(8)    Numeroupaymentto and from CommSec, some of which are very large. Some of these may be share purchaseor the crediting of sale proceedrespectively. But there wano evidence to match them to particular share transactions. The applicantprovided a table which did seek to match them, but MrFrigger conceded that thihad been prepared by Mr Frigger, who did not go into evidence, and that there wano evidence permitting the CommSec withdrawaland paymentto be matched to particular securitie(t184 185, 302 303). I therefore do not take account of that table.

(9)    Payments, apparently to purchase securities, which are not labelled apaymentto CommSec (e.g. $4,540.80 on 9 December 2016 for 'Boral share purchase options').

(10)    Numeroureceiptfor share dividends.

(11)    Paymentand receiptapparently personal in nature, for example:

(a)    $139.00 to Proud ApplianceSubiaco on 1 September 2016;

(b)    $158.26 to Aldi on 19 September 2016;

(c)    $49.00 from Medicare on 19 September 2016;

(d)    $40.00 to the Rhein Donau Club on 18 April 2017, labelled 'Hartmut Frigger'; and (e)    $535.00 to WA Eye Specialiston 22 November 2018.

(12)    Paymentto utilities. Some appear to be for propertiein Western Australia (e.g. paymentto Synergy and Alinta). Some are for internet, and so not apparently related to the role of lessor of any rental property. Others, for example those labelled 'Taswater' or 'Water Como', do appear to be related to the position of MrFrigger, or Mr and MrFrigger, alessors.

(13)    Paymentfor 'Melville rates' - these appear to be of a personal nature.

(14)    Paymentto Michael Frigger and Jessica Frigger. These appear to be of a personal nature, and occasionally they are labelled 'Gift' or 'Loan'. MrFrigger appeared to say in crosexamination that at least some of the paymentto Michael were giftbut she could not remember what all the paymentwere for (t299-300). She said in closing submissionthat paymentto Michael were drawingof her pension (t926) but thiwaa mere assertion, unsupported by evidence. Jessica Frigger appearto have made loan repaymentfrom time to time. There are also unexplained receiptwhich appear to be from Michael Frigger.

(15)    Interest on the fundin BW1.

(16)    Paymentlabelled 'FSF BAS' and 'FSF GST', which would appear to be tax instalmentpaid on behalf of the FSF.

(17)    Receiptfrom the Australian Taxation Office - presumably these are tax refunds. AI have said, the annual returnlist BW1 athe destination account for FSF tax refundand I have referred above to evidence that the amountfor some of these receiptroughly correspond to refund amountshown in some of the annual returns. So I accept that some of these receiptwere FSF tax refunds, although it ineither possible nor necessary to say which ones.

(18)    Legal feeto law firmand barristers.

(19)    A payment of $39,000 on 15 January 2018 labelled 'Security for costs'.

(20)    A payment on 11 June 2018 for transcript in matter WAD 607 of 2015 in thicourt.

(21)    Paymentfrom Angela Frigger.

(22)    A debit for rent for a property at KearnCrescent, Applecros- the purpose of thipayment doenot appear from the evidence.

(23)    A debit of $733.07 on 17 August 2016 labelled 'Frigger Super Fund'. It inot clear where those fundwent.

(24)    Paymentapparently to or from other individuals, whose connection with the applicantdoenot appear from the evidence.

(25)    Unexplained cash and cheque depositand withdrawals.

[301]    The following broad observationcan be made about these categorieof transaction. First, BW1 waplainly the operating account for the BP Businesuntil that busineswasold in February 2016. It icommon ground that the busineswanot an FSF asset. The applicantdid not adduce any evidence of any outward manifestation of an intention to change the character of BW1 aa personal (non-trust) account after the BP Busineswasold, for example a declaration that henceforth it would be held on trust for the FSF. Second, at all timeBW1 waused to receive income of an investment nature, for example share dividendand rent from variouproperties. I have accepted that at least some of those propertiewere FSF assets. Third, BW1 wathe destination and source of substantial paymentwhich appear to have been part of the flow of fundbetween investment bank accounts, including BOQ1, which idepicted in Schedule 2 to these reasons. Fourth, there are some paymentin the nature of tax instalmentwhich, when they were made, were apparently labelled by the person who made them (presumably MrFrigger) abeing for the FSF. And some FSF tax refundwere paid into the account. Fifth, BW1 waalso used for personal expensewhich on their face could not be expenseof the FSF. That use wanot, however, so frequent ato suggest that the account wathe main personal transaction account of MrFrigger or anyone else. The account appearto have been used to pay personal expenseonly on an ad hoc basis. Sixth, there are large paymentto and from CommSec which obviously relate to shareor other financial productbut are otherwise unexplained. Seventh, there are paymentby way of loan or gift to the applicants' children, which are not readily explicable abeing for the purposeof the FSF. Eighth, there are many paymentand receipts, including cash and cheques, the purpose, origin or destination of which are simply unexplained.

[302]    I conclude that BW1 waused aan account for the receipt of income of the FSF and tax refundof the FSF and payment of expenseand other outgoingattributable to the FSF. But it waalso used athe account for numerouother receiptand paymentwhich were not connected to the FSF, or are simply unexplained.

[303]    I do not consider that thimixing of fundand purposeinecessarily fatal to the applicants' claim. While trusteegenerally are obliged not to engage in such mixing, a breach of that obligation by a trustee doenot by itself cause the fund to lose itcharacter aa trust fund. And, aI have said, the transactionof a personal nature are not so frequent ato compel the characterisation of BW1 aa wholly personal and not a FSF trust account. In the end, it ia question of fact arising from the applicants' case ato following the fundinto BOQ1: doethe nature of the transactionin BW1 mean that the account should be characterised aan asset of the FSF, so ato support a conclusion that the fundwhich were paid out of it and which found their way into BOQ1 were FSF funds? Before answering that question, though, it inecessary to consider an exercise purporting to trace FSF rental income which the applicantpresented to the court.

479    Before the primary judge the appellantmade a submission (in the form of four reconciliationof the flowof fundinto and out of the BW1 account) by which they sought to explain and demonstrate that all transactionon the BW1 account were transactionof the FSF. The primary judge rejected the reconciliationand the submission for four principal reason(Liability Judgment at [304]–[319]).

480    First, the primary judge observed that the bank statementcovered 20 monthand contained thousandof transactionthat on the face of them varied greatly in character, source and (or) destination. The reconciliationwere not apparently verified on oath and there wano direct evidence to explain each transaction that wanot self-evidently related to the FSF or one of the accepted or disputed assets. The primary judge concluded that it “iimpossible for the court to go through that many transactionto satisfy itself that the summary provided in the reconciliationiaccurate” (Liability Judgment at [308]). Further, the ‘evidence’ (electronic filedownloaded from BankWest) from which the reconciliationwaactually prepared wanot in evidence. In short, the reconciliations and submission were opaque.

481    Second, the respondent provided calculation(by way of submissions) that sought to demonstrate that the appellants’ reconciliationwere not reliable. The primary judge accepted that the respondent’submissionidentified unexplained aspectof the appellants’ reconciliation(submissions).

482    Third, the primary judge rejected the appellants’ assertion that while the BW1 account waoperated for the BP Service Station business, and that waobviously not an asset of the FSF, the net receiptinto the BW1 account were paymentby way of rent to the trusteeof the FSF and ownerof the Armadale property. MrFrigger gave evidence during her cross-examination to the effect that when she prepared the reconciliationshe set-off the net receiptagainst the rent owed. The primary judge concluded that he had no way of knowing if the set-off wadone and he would not rely on MrFrigger for the veracity of the evidence or set-off.

483    Fourth, the appellantsubmitted that the reconciliationwere based on the ‘last in first out’ rule of thumb. The primary judge observed that ruleof thumb or presumptionof that nature have been criticised in certain Australian authoritieand wainapposite outside undertaking a true ‘tracing’ exercise apart of a claim for a proprietary remedy. A ‘last in first out rule wanot a legal principle. Further, the evidence did not explain how the rule waapplied to the BW1 account.

484    In thiappeal, the appellantsubmitted, in effect, that the primary judge wawrong not to conclude that the reconciliation submission that they made at the trial demonstrated that all fundpassing through the BW1 account were accounted for atransactionof the FSF. In support of that submission the appellantappended three scheduleto their written submissionof 28 June 2022 made pursuant to the Courtorderof 18 May 2022.

(1)    The appellantsubmit that Schedule 1 demonstratethat all paymentinto the BW1 account were income from assetof the FSF.

(2)    The appellantsubmit that Schedule 2 demonstrateall transactionin the period between 31 December 2014 and 30 June 2015 were transactionof or allocated to the FSF. In particular, that certain debtand credit on the BW1 account constituted rent paid by Mr and MrFrigger, in their personal capacitieaproprietorof the BP Service Station business, to Mr and MrFrigger, in their capacitieatrusteeof the FSF.

(3)    The appellantsubmit that Schedule 3 demonstratethat all purchaseof securitiein the Main Portfolio are traceable to fundin the BW1 account.

The entriein the Scheduleare cross-referenced to exhibittendered at the trial that formed part of the appeal book.

485    Schedule 1 containcross-referenceto documentthat were tendered at the trial. The appellantrely on bank statementfor the BW1 account for the opening amount of fundavailable aat 30 June 2015 and to demonstrate variouwithdrawalalleged to comprise $2,900,000 deposited into the BOQ1 account. The appellantrely on FSF member statements, profit and losstatementand tax returnto demonstrate annual income for the 2016, 2017, 2018 and 2019 financial years. None of these documentireliable aeach waprepared after the sequestration orderwere made. The appellantalso rely on the ATO accounttransaction document that we have already indicated inot received afurther evidence in the appeal. It followthat Schedule 1 takethe appellants’ submissionno further than their other submissionto the effect that primary judge wain error for failing to accept that the information contained in financial statements, tax returnand other recordof the FSF waaccurate.

486    Schedule 2 ia table of transactionamountand descriptionon the BW1 account between 31 December 2014 and 30 June 2015. The appellantrely on the BW1 account bank statementtendered at trial athe source of the information produced in that table. At the end of the table the appellantsummarise the transactionrecorded in the table as: Opening Balance; Rent; BP Rent; Interest; Dividends; Share Trading; and FSF expenses. The closing balance ithe same athe opening amount in Schedule 1. Therefore, it ian attempt to identify all transactionin the opening amount of Schedule 1 atransactionof the FSF.

487    It followthat the appellanthave attempted to overcome the problem that the reconciliation upon which they relied in the proceedingbelow wabased on electronic bank recordthat were not in evidence. However, the primary difficulty with the appellants’ reconciliation (whether before the primary judge or in the appeal) remainthat the summarieof the transactionare opaque. Not all transaction descriptiondrawn from the BW1 account bank statement are self-explanatory. Further, evidence from an independent source (i.e., a source other than Mr