FEDERAL COURT OF AUSTRALIA

Filippini v Keystone Asset Management Limited (Receivers and Managers appointed) (in liquidation) [2026] FCAFC 71

ORDERS

THE COURT ORDERS THAT:

1.    The application for leave to appeal be granted.

2.    The appeal be dismissed.

3.    The Applicants/Appellants pay the Respondent’s costs of and incidental to the application for leave to appeal and the appeal.

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

REASONS FOR JUDGMENT

THE COURT:

1    The Applicants seek leave to appeal freezing orders of the primary judge made on 11 September 2025 insofar as those orders extended to certain assets held by trustees. As leave will be granted, we refer to them as the Appellants.

2    Robert Filippini (Mr Filippini), the First Appellant, is the husband of Dimitra Filippini (Mrs Filippini). In her capacity as trustee of the A&M Trust and the R&D Trust, Mrs Filippini is the Second Appellant. FPC Vic Pty Ltd (FPC) is the Third Appellant, in its capacity as trustee of the FPC Vic Trust. The assets in question are:

(a)    real property held by Mrs Filippini as trustee of the A&M Trust (the Chapel Street Property);

(b)    real property held by Mrs Filippini as trustee of the R&D Trust (the Lygon Street Property); and

(c)    four vehicles — three Lamborghinis and a Maserati — held by FPC as trustee of the FPC Vic Trust (the cars).

3    The disputed assets were among a long list of assets — bank accounts, real properties and vehicles — covered by the freezing orders. The assets were frozen to the extent of $158 million, that being the sum of the amounts said by the Respondent (Keystone) to have been misappropriated by Mr Filippini and a company of which Mr Filippini was the sole director, City Built Pty Ltd (City Built). The background to, and nature of, the substantive proceeding was summarised by the primary judge in his Honour’s reasons: Keystone Asset Management Ltd (Receivers and Managers appointed) (in liquidation) v Filippini (No 2) [2025] FCA 1138 (J): J [15]–[27].

4    Mrs Filippini is a Respondent to the substantive proceeding in her personal capacity. FPC is not a party to the substantive proceeding.

5    The appeal concerns the proper construction of r 7.35(5)(a) of the Federal Court Rules 2011 (Cth) (Rules). The Appellants contend that the power of the Court to make a freezing order against a person other than a judgment debtor (or prospective judgment debtor) under r 7.35(5)(a) only arises in respect of “assets (including claims and expectancies) of the judgment debtor or prospective judgment debtor” in the sense that the assets to be frozen can only be the same assets that enliven the power. The Appellants contend that the reference to assets “of” the judgment debtor is to be understood as confined to assets that are beneficially held by the judgment debtor. The Respondent refutes this argument. The Respondent submits that rr 7.35(5)(a)(i) and (ii) are gateway provisions enlivening the power to make freezing orders against third parties, but do not confine the Court’s power so that it may only be exercised in respect of assets beneficially held by the judgment debtor.

6    The Appellants contend that a series of findings about Mr Filippini’s control over the three discretionary trusts — referred to as the “Trust Control Findings” — did not enliven any power to make freezing orders over the two properties and the four cars. The Appellants contend that control of a trust that holds assets does not render the assets of the trust assets “of” the controlling person. Rather, the Appellants submit, where assets are held by a third party, they can only be the subject of a freezing order if there is a good arguable case that those assets may, by compulsion (cf voluntarily) be accessed in enforcement action following judgment. This was referred to as the “enforcement pathway” argument.

7    The Appellants contend that, if the Court were to conclude that the primary judge erred and so proceed to re-exercise the discretion, this Court would refuse to make any freezing order in similar terms — whether in reliance on s 23 of the Federal Court Act 1976 (Cth) (Act) or under the Rules — on the basis that no good arguable case has been established that Keystone would ultimately be able to access those trust assets in any enforcement action it may take following success in the trial of the substantive proceeding.

8    As we will explain, the Appellants’ arguments must be rejected. Those arguments misconstrue r 7.35 of the Rules, and seek unduly to constrain s 23 of the Act.

9    Leave to appeal may be granted where the primary judgment is the subject of sufficient doubt and would, if not disturbed, give rise to serious injustice: Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 at 398-400 (Sheppard, Burchett and Heerey JJ). Leave to appeal may also be granted where the appeal raises questions of general importance, as explained in Federal Commissioner of Taxation v Runcity Pty Ltd [2025] FCAFC 152; (2025) 312 FCR 291 at [7] (O’Bryan, Button and Owens JJ):

Each proceeding before us was advanced by an application for leave to appeal. The usual test for the grant of leave to appeal, set out in Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 at 398-400, is not exhaustive. The authorities recognise that the discretion to grant leave is not constrained by rigid rules and may be granted where, for example, the questions posed for resolution have general importance beyond the concerns of the parties: Australian Securities and Investments Commission v P Dawson Nominees Pty Ltd (2008) 169 FCR 227 at [10] (Heerey, Moore and Tracey JJ); Fair Work Ombudsman v Toyota Material Handling (NSW) Pty Ltd (2012) 209 FCR 428 at [39] (North and Flick JJ); and Deputy Commissioner of Taxation v Miraki [2022] FCAFC 96 at [5] (Perram, Moshinsky and Hespe JJ).

10    Recognising that the proposed appeal raises important questions of wider application concerning the availability of freezing orders in respect of assets held in discretionary trusts, we will grant leave to appeal. However, the appeal will be dismissed. Accordingly, it is not necessary to address the Notice of Contention.

SECTION 23 OF THE ACT AND R 7.35(5) OF THE RULES

11    Section 23 of the Act provides as follows:

The Court has power, in relation to matters in which it has jurisdiction, to make orders of such kinds, including interlocutory orders, and to issue, or direct the issue of, writs of such kinds, as the Court thinks appropriate.

12    Subject to the requirement that the orders in question relate to a “matter” in the Court’s jurisdiction, s 23 confers a broad power to make orders subject to the limitation that the Court thinks the order in question “appropriate”.

13    Section 59(1) of the Act empowers the “Judges of the Court”, or a majority of them, to make Rules of Court that are not inconsistent with the Act, “making provision for or in relation to the practice and procedure to be followed in the Court … and for or in relation to all matters and things incidental to any such practice or procedure, or necessary or convenient to be prescribed for the conduct of any business of the Court”. Other subsections of s 59 concern the rule-making power of the Judges of this Court, but are not presently relevant.

14    Division 7.4 of the Rules contains various rules in relation to freezing orders. Rule 7.31 defines “freezing order” by reference to r 7.32. Rule 7.32 provides as follows (emphasis in original):

Freezing order

(1)     The Court may make an order (a freezing order), with or without notice to a respondent, for the purpose of preventing the frustration or inhibition of the Court's process by seeking to meet a danger that a judgment or prospective judgment of the Court will be wholly or partly unsatisfied.

(2)     A freezing order may be an order restraining a respondent from removing any assets located in or outside Australia or from disposing of, dealing with, or diminishing the value of, those assets.

15    By reference to the definition of “respondent” in r 7.31, references in r 7.32 to a “respondent” are to be understood as referring to the “person against whom a freezing order or an ancillary order is sought or made”. Rule 7.34 provides that the Court may make a freezing order against a person “even if the person is not a party in a proceeding in which substantive relief is sought against the respondent”. In other words, a freezing order may be made against a non-party.

16    Rule 7.35(4) concerns freezing orders and ancillary orders made against judgment debtors or prospective judgment debtors, whereas r 7.35(5) concerns freezing and ancillary orders made against persons other than a judgment debtor or prospective judgment debtor (ie third parties). Those rules are in the following terms:

(4)     The Court may make a freezing order or an ancillary order or both against a judgment debtor or prospective judgment debtor if the Court is satisfied, having regard to all the circumstances, that there is a danger that a judgment or prospective judgment will be wholly or partly unsatisfied because any of the following might occur:

(a)     the judgment debtor, prospective judgment debtor or another person absconds;

(b)     the assets of the judgment debtor, prospective judgment debtor or another person are:

(i)     removed from Australia or from a place inside or outside Australia; or

(ii)     disposed of, dealt with or diminished in value.

(5)     The Court may make a freezing order or an ancillary order or both against a person other than a judgment debtor or prospective judgment debtor (a third party) if the Court is satisfied, having regard to all the circumstances, that:

(a)     there is a danger that a judgment or prospective judgment will be wholly or partly unsatisfied because:

(i)     the third party holds or is using, or has exercised or is exercising, a power of disposition over assets (including claims and expectancies) of the judgment debtor or prospective judgment debtor; or

(ii)     the third party is in possession of, or in a position of control or influence concerning, assets (including claims and expectancies) of the judgment debtor or prospective judgment debtor; or

(b)     a process in the Court is or may ultimately be available to the applicant as a result of a judgment or prospective judgment, under which process the third party may be obliged to disgorge assets or contribute toward satisfying the judgment or prospective judgment.

17    Rule 7.35(6) is also significant. It provides that “[n]othing in this rule affects the power of the Court to make a freezing order or ancillary order if the Court considers it is in the interests of justice to do so”. Rule 7.35(6) avoids any prospect that other specific rules narrow the full amplitude of the Court’s power under s 23 of the Act.

THE SUBSTANTIVE PROCEEDINGS

18    The primary judge’s reasoning in respect of the freezing orders needs to be understood in the context of the substantive proceeding. The primary judge summarised the parties to, and allegations advanced in, the substantive proceeding in his Honour’s reasons: J [15]–[27]. The salient allegations, for the purposes of the appeal, are as follows:

(1)    Keystone is and was the responsible entity of a registered managed investment scheme, the Shield Master Fund (SMF) and was the trustee of the Australian Diversified Property Fund (ADPF), an unregistered property fund.

(2)    Mr Filippini was at all material times the sole director of the Second and Third Respondents (to the substantive proceeding), City Built and Force 1 Security Pty Ltd. Mr Filippini was also, from 15 December 2023, director of the Fourth Respondent (to the substantive proceeding), Force 1 Constructions Queensland Pty Ltd.

(3)    In the period 6 April 2022 to 31 May 2024, Keystone (as responsible entity for the SMF) made payments of about $305 million to Keystone, as trustee of the ADPF, for the purchase of units in the ADPF. In the period 11 April 2022 to 3 September 2024, Keystone, as trustee of the ADPF made payments of approximately $305 million to the Ninth Respondent (of the substantive proceeding), Chiodo Corporation Pty Ltd (Chiodo Corporation), a company of which Paul Anthony Chiodo was a director.

(4)    From 11 April 2022, payments totalling at least $158 million were paid by Chiodo Corporation and by Keystone to accounts held by City Built and Mr Filippini, in circumstances where there were no written contracts and City Built was not required to and did not in fact submit any tenders or quotations for any of the work it undertook for Chiodo Corporation on the ADPF developments or any other development.

(5)    From 17 January 2022 to 28 May 2024, City Built issued invoices to Chiodo Corporation totalling $142 million, thereby representing that works had been undertaken.

(6)    City Built and Mr Filippini received payments for which the purported works or expenses were not in fact performed or incurred by City Built or Mr Filippini. These sums were dishonestly appropriated by City Built and Mr Filippini in pursuance of a fraudulent design with Mr Chiodo and Chiodo Corporation.

(7)    Claims are made against City Built and Mr Filippini on the basis of (inter alia) the first limb of Barnes v Addy, and against other Filippini Respondents on the basis that they received some of the misappropriated funds.

19    Having regard to the issues arising in the appeal, it is relevant to note that:

(a)    there is no allegation that funds were misappropriated prior to April 2022; and

(b)    Mrs Filippini is a party to the substantive proceeding in her personal capacity; she is not a party in her capacity as trustee of the R&D Trust or in her capacity as trustee of the A&M Trust; and

(c)    FPC, being the trustee of the FPC Vic Trust, is not a party to the substantive proceeding.

THE TRUSTS: ASSETS, CONTROL AND OTHER FACTS

20    The Lygon Street and Chapel Street properties are held by the R&D Trust and the A&M Trust respectively. Both are discretionary trusts, of which Mrs Filippini is the trustee and Mr Filippini is the appointor.

21    The cars are held by FPC as trustee for the FPC Vic Trust. Mr Filippini is the sole shareholder of FPC. The sole director of FPC is an accountant, Mr Traficante of Bellmonts Accountants and Advisors Pty Ltd. Mr Filippini is the appointor of the FPC Vic Trust.

22    There was no suggestion that the two properties and four cars were acquired with misappropriated funds. Those assets were acquired before the commencement of the alleged misappropriations.

23    The terms of the A&M Trust Deed are the same as the terms of the FPC Vic Trust Deed.

24    In the course of discussion with the bench during the hearing, the Appellants accepted the following propositions in relation to the A&M Trust:

(1)    Mr Filippini is one of the principal beneficiaries.

(2)    As appointor, Mr Filippini has power to remove and appoint the trustee of the trust.

(3)    Mr Filippini could appoint himself trustee of the trust.

(4)    Mr Filippini could then distribute all income of the trust to himself.

(5)    Mr Filippini could accelerate the vesting day.

(6)    Mr Filippini could direct all the capital of the trust to himself.

25    As the terms of the FPC Vic Trust are the same, the same necessarily follows in respect of that trust. The only difference between the terms of the trust deeds for those two trusts, and the deed for the R&D Trust, which was brought to our attention by the parties, is that the latter does not include a clause expressly permitting the trustee to act in its own interest (cf the deeds for the A&M Trust and the FPC Vic Trust, which do include such a clause).

26    The primary judge made a number of relevant findings, which are not challenged on the appeal:

(1)    Mr Filippini made a “series of transfers of large sums of money from an account in the name of [Mrs Filippini] (as trustee for the Filippini Investment Trust) to ‘AF’”, which the primary judge inferred to refer to Antonio Filippini, and a “series of transfers of large sums of money from an account in the name of [Mrs Filippini] to Matilda [Filippini]”: J [43].

(2)    Mr Filippini made these transfers — including transfers from the Filippini Investment Trust whose trustee was Mrs Filippini — without consulting Mrs Filippini (or Antonio or Matilda Filippini), thereby supporting an inference that the affairs of the R&D Trust and the A&M Trust may be conducted in a similar manner, that is, by Mr Filippini without consulting Mrs Filippini: J [57].

(3)    “The evidence suggests that there has been intermingling of assets as between the Filippini Respondents to such an extent that it would not be safe to proceed on the basis that each respondent is entitled only to the assets in his or her name to the exclusion of the other respondents. The picture that emerges from the affidavit evidence is that the Filippini Respondents’ assets were mixed together without any clear delineation between them.”: J [45]; see also J [42].

(4)    A good arguable case had been established that “the assets of the R&D Trust and the A&M Trust may be applied in accordance with [Mr Filippini’s] directions as if they were his own assets”: J [56].

(5)    A document signing log in respect of two Business Activity Statements (BASs) lodged by the R&D Trust suggested that the documents were executed by Mr Filippini. While an explanation had been offered, the explanation raised other concerns, including that the accountant, Mr Traficante, communicated with Mrs Filippini through an email account used jointly by Mr and Mrs Filippini, making it difficult for Mr Traficante to know who was providing instructions in relation to the affairs of the R&D Trust and, the primary judge inferred, the A&M Trust: J [59]. The primary judge concluded that there was “some doubt” whether Mrs Filippini in fact signed the two BASs lodged by the R&D Trust: J [59].

(6)    The evidence “supports an inference that [Mr Filippini] may be able to direct the application of the assets of the two trusts”: J [60].

(7)    The inferences available in respect of the R&D Trust and the A&M Trust are also available in respect of the FPC Vic Trust: J [68].

THE PRIMARY JUDGE’S REASONING

27    On 11 September 2025, the primary judge made freezing orders which were stated, by their terms, to have been made pursuant to r 7.32 of the Rules and s 23 of the Act. Nevertheless, it was common ground between the parties that the freezing orders were made by the primary judge pursuant to r 7.35(5)(a), albeit it was not clear whether subr (i) or (ii) was invoked.

28    Having addressed the facts, the primary judge set out the following aspects of the parties’ submissions (J [48]–[55]):

(1)    Keystone relied heavily on Gordon J’s judgment in Deputy Commissioner of Taxation v Vasiliades [2014] FCA 1250; (2014) 323 ALR 59 (Vasiliades) at [60] where her Honour applied Australian Securities and Investments Commission v Carey (No 6) [2006] FCA 814; (2006) 153 FCR 509 (Carey (No 6)) in stating that “[a] beneficiary who effectively controls a trustee’s power of selection because he or she is the trustee or one of them and / or has the power to appoint a new trustee may have something approaching a general power and the ownership of the trust property”.

(2)    Keystone also relied on Carey (No 6) at [19], [37]–[39] (French J), Rafferty v Time 2000 West Pty Ltd (No 2) [2008] FCA 1931 at [25]–[26] (Besanko J), and Cardile v LED Builders Pty Ltd [1999] HCA 18; (1999) 198 CLR 380 (Cardile) at [47], [119].

(3)    Keystone submitted that there was a good arguable case that Mr Filippini is a beneficiary who effectively controls the trustee of each trust, that his control approaches a general power and thus a proprietary interest in the income and corpus of each trust and that it is “as good as certain” that Mr Filippini would receive the benefits and distributions of income or capital from the trusts.

(4)    The Filippini Respondents emphasised that the real properties were acquired by Mrs Filippini as trustee, were unencumbered before the commencement of any impugned dealings and remained unencumbered. Keystone did not assert any proprietary interest.

(5)    The Filippini Respondents contended that Vasiliades did not assist Keystone because: it was distinguishable on the facts; it was decided in reliance on Carey (No 6), but that decision concerned the definition of property in s 9 of the Corporations Act 2001 (Cth) (Corporations Act); and attempts to expand the applicability of French J’s comments have been doubted in other cases. Enjoining Mr Filippini’s power of appointment would be sufficient to ensure he does not exercise that power so as to place assets beyond the legitimate interest of creditors, as was the approach taken in Deputy Commissioner of Taxation v Ekelmans [2013] VSC 346; (2013) 94 ATR 800 (Ekelmans).

(6)    The Filippini Respondents submitted that Cardile, and its reference to “deliberate blurring” of assets, can be distinguished.

29    The primary judge concluded that “the affidavit evidence establishes a good arguable case that the assets of the R&D Trust and the A&M Trust may be applied in accordance with [Mr Filippini’s] directions as if they were his own assets”: J [56]. This finding of control was not challenged on the appeal. His Honour then set out other factual findings concerning the prospect that Mr Filippini signed the BASs and matters concerning the communication between the accountant and Mr and Mrs Filippini (see paragraph 26(5) above): J [58]–[59].

30    Having regard to those factual matters, the primary judge concluded that “the present case is not materially different from Vasiliades”: at J [60]. The primary judge observed that, although Mr Vasiliades was the sole director and sole shareholder of the trustee company as well as being a beneficiary, “the evidence referred to above supports an inference that [Mr Filippini] may be able to direct the application of the assets of the two trusts”: J [60].

31    The primary judge noted the Filippini Respondents’ submission that Vasiliades has been doubted in other cases, but his Honour said he was “not persuaded that I should not follow Vasiliades”: J [60]. The primary judge observed that an order restraining Mr Filippini was insufficient, in light of the foregoing analysis: J [61].

32    The primary judge concluded that the assets of the R&D Trust and the A&M Trust should be included in the freezing orders and did not accept that the Lygon Street Property or the Chapel Street Property should be excluded from the freezing orders: J [62].

33    In respect of the cars held by the FPC Vic Trust, the primary judge considered that the same inferences were available, that there was a “reasonably close overlap between the facts and circumstances relating to [the FPC Vic Trust] and those relating to the R&D Trust and the A&M Trust”, such that the reasoning set out above in relation to those two trusts applied also to the cars held in the FPC Vic Trust: J [68]. The primary judge concluded that the freezing orders should apply to the four cars held by the FPC Vic Trust.

34    The key integers of the primary judge’s reasoning were:

(1)    Mr Filippini controlled the trusts and was able to direct the application of trust income and assets.

(2)    The case was not materially different from Vasiliades.

(3)    The primary judge was not persuaded he should not follow Vasiliades.

35    The Appellants contend that the findings made by the primary judge about Mr Filippini’s control of the trusts did not provide a sufficient foundation for freezing orders over the two properties and the cars, that the primary judge should have found that Keystone failed to establish that any of the trustees held a power of disposition over, or were in possession of, assets of Mr Filippini within the meaning of r 7.35(5)(a) of the Rules and, consequently, that the primary judge erred in finding that the freezing orders should include the two properties and the cars.

THE COURT’S POWER TO MAKE A FREEZING ORDER AGAINST THIRD PARTIES

36    As the foregoing account of the primary judge’s reasoning exposes, his Honour focused on and applied Gordon J’s judgment in Vasiliades. Vasiliades needs to be approached in context, and having regard to the relevant case law leading up to Carey (No 6), and the cases — referred to by the primary judge — resisting any expansion of Carey (No 6). Consideration of the Appellants’ submissions also needs to be approached in the context of a proper understanding of the Court’s power to make freezing orders and with attention being paid to what the High Court has said about the purpose of that power and the circumstances in which it may be exercised to preserve claims and expectancies of a judgment debtor or prospective judgment debtor.

37    The starting point must be the power being exercised to make freezing orders.

38    This Court has the power to make freezing orders pursuant to s 23 of the Act, and also as an incident of the general grant of power to it as a superior court of law and equity: Jackson v Sterling Industries Ltd [1987] HCA 23; (1987) 162 CLR 612 (Jackson) at 617–18 (Wilson and Dawson JJ). Freezing orders are directed to preventing abuse of the processes of the court by its remedies being frustrated by disposition of assets; freezing orders are not made to afford security to any actual or prospective judgment creditor: Jackson at 617, 619 (Wilson and Dawson JJ), 622–23 (Deane J). Where relief is sought against a non-party, the focus must be on the administration of justice: Cardile at [42] (Gaudron, McHugh, Gummow and Callinan JJ).

39    The majority of the High Court held in Jackson that an order requiring a defendant to provide “security” for a prospective judgment involved an error of principle as it was directed at providing security, when the Court’s power to order a freezing order is not properly to be exercised for that purpose. In describing the purpose of a freezing order in positive terms, Deane J (with whom Mason CJ, Wilson and Dawson JJ agreed) said, at 625, that the purpose is “to prevent a defendant from disposing of his actual assets (including claims and expectancies) so as to frustrate the process of the court by depriving the plaintiff of the fruits of any judgment obtained in the action” (emphasis added).

40    It should be noted that, in Jackson, Deane J, with whom Mason CJ, Wilson and Dawson JJ agreed, identified that the actions a person could take that would result in “claims and expectancies” being disposed of was a means by which the Court’s processes could be frustrated by a putative judgment debtor. Their Honours’ conception of the proper ambit of the power to make a freezing order was not limited to actions that may be taken directly dealing with a legal or beneficial interest of a judgment debtor or prospective judgment debtor in identified property.

41    The same potential breadth of the operation of freezing orders is apparent from the judgment of Brennan J. His Honour likewise recognised that the range of actions that may be taken to frustrate the processes of the court is not limited to actions directly dealing with a legal or beneficial interest of a judgment debtor or prospective judgment debtor in identified property. Rather, Brennan J explained, the power to make a freezing order may be exercised “according to the exigencies of the case and, the schemes which a debtor may devise for divesting himself of assets being legion, novelty of form is no objection to the validity of such an order”: at 621; see also Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia [1998] HCA 30; (1998) 195 CLR 1 at [35] where Brennan CJ, McHugh, Gummow, Kirby and Hayne JJ referred to Jackson and said “[t]he moulding of an interlocutory injunction must depend upon the circumstances of each case”, as well as quoting this passage of Brennan J’s judgment in Jackson with approval.

42    The language of r 7.35(5)(a) — “assets (including claims and expectancies)” — finds its genesis in Jackson. The foundational case, Jackson, did not require that the putative judgment debtor have a legal or beneficial interest in the asset in order for the preservation of such assets to constitute a proper exercise of the court’s power.

43    A mere expectancy is not a chose in action. An expectancy is not an item of property in and of itself that can be “owned” by someone. Expectancies do not exist at large, such that they can directly be the subject of a freezing order. One might ask how an order would conceivably be framed to freeze an expectancy. Rather, an expectancy exists in relation to something else. For example, beneficiaries of discretionary trusts are, in the ordinary course, said not to have any interest in assets of the trust, but to have a mere expectancy that they may, in time, receive a distribution of income or capital from the trust. Another difficulty is that even if the expectancy could be the subject of the freezing order, preventing a person from dealing with an expectancy would not ensure that the expectancy retains value. For example, in the discretionary trust context, the value of the expectancy is responsive to the assets and income of the trust that may be distributed, but preventing someone from dealing with the expectancy itself would not prevent dealings that denude the expectancy of any value.

44    The impracticality — if not impossibility — of freezing the expectancy itself informs the construction of r 7.35(5)(a). In particular, once that difficulty is realised, it is apparent that r 7.35(5)(a) is not limited to the making of a freezing order that fixes on and freezes the “expectancy” that is the asset of the judgment debtor or prospective judgment debtor. Rather, it is where a third party has some kind of power of disposition over the expectancy of the judgment debtor or prospective judgment debtor that the power to make a freezing order against that third party arises. In this respect, it is important to recall that freezing orders take effect in personam, and so are distinct from tracing and other remedies protecting proprietary rights: Mercedes Benz AG v Leiduck [1996] AC 284 at 300 (Lord Mustill); the in personam character of freezing orders was confirmed in Cardile at [50] and [55] (Gaudron, McHugh, Gummow and Callinan JJ); and Deputy Commissioner of Taxation v Huang [2021] HCA 43; (2021) 273 CLR 429 at [25] (Gageler, Keane, Gordon and Gleeson JJ).

45    In Cardile, the plurality observed that “[t]he effective exercise of the jurisdiction in such litigation may call for asset preservation orders against third parties who may hold or otherwise be interested in (in the sense we explain further in these reasons) assets of the judgment debtor or potential judgment debtor or who may be obliged to contribute to the property of such a judgment debtor to help satisfy the judgment” (at [44]). In expanding on the circumstances in which a freezing order may be made against a third party, the plurality in Cardile referred to the third party being “amenable in some way ultimately to some coercive process requiring it to disgorge, or in some other way to participate in the satisfaction of, a judgment against a party”: at [48]. The plurality rejected as too narrow the suggestion that a freezing order can only be made against a third party where the third party holds or is about to hold or dissipate or further dissipate “property beneficially owned” by the prospective judgment debtor, albeit indicating that it would be rare for a freezing order to be made where those circumstances do not exist: at [54].

46    Bringing those matters together, the plurality in Cardile set out the principles to be applied in determining whether a freezing order may be made against third parties as follows (at [57], emphasis added):

In our opinion such an order may, and we emphasise the word "may'', be appropriate, assuming the existence of other relevant criteria and discretionary factors, in circumstances in which: (i) the third party holds, is using, or has exercised or is exercising a power of disposition over, or is otherwise in possession of, assets, including "claims and expectancies", of the judgment debtor or potential judgment debtor; or (ii) some process, ultimately enforceable by the courts, is or may be available to the judgment creditor as a consequence of a judgment against that actual or potential judgment debtor, pursuant to which, whether by appointment of a liquidator, trustee in bankruptcy receiver or otherwise, the third party may be obliged to disgorge property or otherwise contribute to the funds or property of the judgment debtor to help satisfy the judgment against the judgment debtor.

47    It is this formulation, including the reference from Jackson to “claims and expectancies”, and the disjunctive “or”, that finds its embodiment in r 7.35(5)(a) of the Rules. Both in Cardile and in r 7.35(5)(a), the disjunctive “or” precedes identification of an enforcement process as an independent basis upon which a freezing order may be made against a third party. Further, and as Beach J observed in Forever Winner International Development Australia Pty Ltd v Shenzhen Xinhe Hongshi Investment and Consultancy Co Ltd [2026] FCA 167, although Cardile “sets out where freezing orders against third parties may be appropriate, it did not expressly set out the exhaustive circumstances”: at [117].

48    Freezing orders operate in personam, by stopping the person against whom the order is made from doing specified things. Those things need to be specified with particularity. Particularity and clarity are important in all orders of a court, but are particularly vital when contravention of the order constitutes a contempt of court (and noting that freezing orders are typically endorsed with a penal notice). As noted, an expectancy is not something that can itself be readily specified in freezing orders, but it is necessary for the freezing order to be framed and to operate so that the expectancy is preserved. This will, in some cases, require freezing orders to be framed so that they are: directed to the third party; and prevent the third party from dealing with the items of property and / or rights that render that expectancy something worth preserving. In the case of a discretionary trust in respect of which the judgment debtor or prospective judgment debtor is merely a beneficiary, it is doubtful that the circumstances would warrant a freezing order being made. But where the beneficiary also controls what the trust does with its income and assets, the expectancy may well be worth preserving. That is so whether or not one goes further and characterises a beneficiary in such a position as having something approaching “ownership of trust property” (being the formulation of French J in Carey (No 6), which was adopted and applied by Gordon J in Vasiliades).

49    We pause, at this point, to note that recognising that a freezing order may be made to prevent an expectancy being compromised does not involve trammelling on orthodox trust and property law. Contrary to the Appellants’ submissions, it does not necessarily involve conflating control with ownership, or treating control as somehow converting the mere expectancy of the beneficiary of a discretionary trust into a beneficial interest in assets.

50    Once the genesis of the terminology and structure of r 7.35(5)(a) are understood, it is apparent that Carey (No 6) and Vasiliades do not do violence to those orthodoxies. Rather, they recognise and give effect to the broader canvas of this Court’s power to prevent prejudice to its processes.

51    Carey (No 6) and Vasiliades are central to the disposition of this appeal. They are decisions of a former Chief Justice of the High Court, and a sitting judge of the High Court.

52    Carey (No 6) concerned an application by ASIC to expand receivership orders made under s 1323 of the Corporations Act, to include property held by a third party as trustee for any trust in which the defendant was a beneficiary. Orders were made on the basis that, because the trustee was “effectively the alter ego of the relevant beneficiary or otherwise subject to his or its effective control, the beneficiary has at least a contingent interest within the meaning of that term as used in the definition of ‘property’ in s 9 of the [Corporations] Act”: at [5]. Section 1323(1)(h) only permitted the appointment of a receiver to the property or part of the property of the relevant person; it did not permit the appointment of a receiver to the property of third persons: at [16]. The statutory definition of property included legal or equitable estates or interests, whether present or future and whether vested or contingent.

53    Justice French quoted a passage of Gummow J’s judgment in Commissioner of Taxation (Cth) v Vegners (1989) 20 ATR 1645 at 1649, in which Gummow J said, of the power of a trustee of a discretionary trust, that where the trustee has a power exercisable in favour of any person including the donee of the power, that power “would be a general power and thus would be tantamount to ownership of the property concerned”: at [19]. Relying on that passage, French J considered that “[a]t least by analogy it may be observed that a beneficiary who effectively controls the trustee of a discretionary trust may have what approaches a general power and thus a proprietary interest in the income and corpus of the trust” at [19].

54    According to orthodox trust law, a beneficiary of a discretionary trust does not have a proprietary interest in any particular asset of the trust fund or in the trust fund as a whole. However, such a beneficiary has an “expectancy”: R & I Bank of Western Australia Ltd v Anchorage Investments Pty Ltd (1993) 10 WAR 59 (Anchorage) at 79 (Owen J). Applying such orthodox principles, in Carey (No 6) French J considered that a mere beneficiary of a discretionary trust does not have any interest that would fall within the definition of “property” in s 9 of the Corporations Act: at [29]. However, where the beneficiary “effectively controls the trustee’s power of selection”, “there is something which is akin to a proprietary interest in the beneficiary”: at [29].

55    In addressing ASIC’s contention that the beneficiary of a discretionary trust has a “contingent interest” within s 9 of the Corporations Act, French J considered that a beneficiary “at arms length from the trustee” does not have a contingent interest, but has an expectancy (being the mere possibility of a distribution): at [36]. However, where a discretionary trust is controlled by a trustee “who is in truth the alter ego of a beneficiary” then “at the very least a contingent interest may be identified”: at [36]. Moreover, “the beneficiary who effectively controls the trustee’s power of selection because he or she is the trustee or one of them and/or has the power to appoint a new trustee has something approaching a general power and the ownership of the trust property”: at [37].

56    Two final matters ought to be noted regarding Carey (No 6):

(1)    French J invited proposed orders under s 1323(1)(h) “in relation to trusts of which the relevant defendant is the effective controller, thereby enjoying at least a contingent interest, if not effective ownership, of the trust property”: at [46].

(2)    French J did not consider that recourse could be had to s 23 of the Act to extend the power to make the receiver orders in a way for which the primary power (s 1323) did not provide: at [47].

57    Carey (No 6) was decided some years after Anchorage, which was one of the decisions considered by French J in Carey (No 6). Anchorage is instructive as it exposes how the position of a beneficiary of a discretionary trust who has no additional powers or control is not to be equated with the position of a beneficiary who has such additional powers; this is the same point made by French J in Carey (No 6) in distinguishing the “ordinary case” from the case of a beneficiary who effectively controls the trustee’s power of selection.

58    The ordinary beneficiary of a discretionary trust only has the right to the due and proper administration of the trust by the trustee; that is an orthodoxy of trust law. In Anchorage, it was said by Owen J (Rowland and Ipp JJ agreeing), at 80, that the mere expectation a beneficiary with no other offices, functions or powers has, that the trustee might appoint some income or capital of the trust fund in his or her favour, lacks the requisite aspect of “value” for it to be regarded as an “asset”. Justice Owen considered, however, that where the beneficiary also has a range of powers and authorities that allow the beneficiary effectively to control the actions of the trust for his or her own purposes, the position may be otherwise: at 81 (Ipp J agreeing).

59    Justice Owen described as “clearly arguable” the position that: the powers were things of value that may be caught by s 116(1)(b) of the Bankruptcy Act 1966 (Cth) (Bankruptcy Act); and equity may intervene to advance the position of creditors over a volunteer in respect of the purported exercise of a power of appointment: at 82–83 (Ipp J agreeing). As to the latter point, Owen J noted that “it seems the common law regards a general power as something tantamount to or equivalent to property” and further observed that “[t]he combination of powers may amount to a general power of appointment and, as such, or in their own right, they may be a form of property or (perhaps a little less likely) they may constitute some form of property interest in the underlying ‘assets’ of the trust fund”: at 83 (Ipp J agreeing).

60    What should be observed from Anchorage is that the Court there recognised that a simple beneficiary of a discretionary trust (for want of a better term) is not in the same position as a beneficiary who also has powers of effective control over a trust, its assets and income. The second thing to note is that, as Owen J discussed in more detail, there are some complex arguments and uncertainties regarding the extent to which a trustee in bankruptcy may obtain the capacity to control or exercise these valuable powers, and the extent to which equity might be called on to intervene in respect of the exercise of powers of appointment, such that neither subject could be expected to be considered and addressed in depth in such applications.

61    In this appeal, the Appellants sought to emphasise cases they considered expressed doubt about Carey (No 6), or at least sought to confine that judgment. Australian Securities and Investments Commission v Burnard [2007] NSWSC 1217; (2007) 64 ACSR 360 (Burnard) is one such case, as Carey (No 6) was distinguished by Barrett J. In Burnard, ASIC’s application was advanced under s 1323 of the Corporations Act. ASIC sought freezing orders restraining (relevantly) Mr Burnard in respect of his assets (referred to as “Order 1”), and restraining BDI Pty Ltd (BDI) in respect of its assets whether or not owned on behalf of any trust, including named trusts (referred to as “Order 3”). In approaching the question of whether Order 3 could be supported by s 1323(1)(h) of the Corporations Act, as ASIC alleged, Barrett J observed that the order was framed on the basis that all of the property held by BDI was property “of” Mr Burnard, which proposition would only hold if no interests subsisted in the whole of the assets of BDI, other than the interests of Mr Burnard: at [67]–[68].

62    It is important to note that, in Burnard, Barrett J proceeded on the basis that it was necessary, in order for s 1323(1)(h) to support Order 3, that the whole of the assets of BDI, “as distinct from some interest in them”, could properly be regarded as the “property” of Mr Burnard: at [68]. That question was distinct from that considered by French J in Carey (No 6) which concerned whether the positions occupied, rights enjoyed and powers exercisable by certain persons in relation to trust property were such as to give rise to interests of those persons in that property so that those interests could themselves be considered the “property of” those individuals. That was a different question from that before Barrett J, which was whether the whole of the property of BDI was “‘property of’ … Mr Burnard”: at [71].

63    On the basis that BDI, as trustee, enjoyed rights of indemnity in respect of expenses (rates, outgoings, repairs, maintenance etc), Barrett J concluded that the “whole” of the assets of BDI had not been shown to be “property of” Mr Burnard: at [78]. It is important to note that Barrett J nonetheless considered that “[i]t may be that [Mr Burnard] has an equitable interest of a proprietary kind in the assets of each trust, according to one or more of the approaches explored by French J in Carey (No 6)”, but his Honour was not called upon to decide whether that was the case, the issue before him being whether the “whole” of the interests in the assets of BDI was property of Mr Burnard: at [78]. We do not consider that Burnard casts any doubt on Carey (No 6).

64    Carey (No 6) was also distinguished by Judd J in Ekelmans. Mr Ekelmans was one of three directors of a trustee company. He was also the appointor and one of the beneficiaries of the trust. Mr Ekelmans was the ultimate “controlling hand” over family entities. Justice Judd noted that effective control over a trust does not, of itself, “convert [the trust’s] assets into assets of the controlling person”: at [44].

65    Justice Judd observed that the remedial regime being applied by French J in Carey (No 6) was different in character and purpose from the general law and rule-based regime authorising the making of freezing orders: at [46]. The purpose of freezing orders is to “protect against the risk of dissipation of assets that might frustrate or inhibit the court’s process”: at [46]. Freezing orders do not of themselves invest in a successful applicant any entitlement to the assets enjoined, rather their purpose is to “protect the processes of the court”: at [46]. Justice Judd considered that it was unnecessary to decide whether the power under the court’s rules extended to the assets of the trust because of Mr Ekelmans’ powers under the trust deed, on the basis that his exercise of such powers may be enjoined to ensure that Mr Ekelmans did not place assets beyond the legitimate reach of a trustee in bankruptcy: at [47].

66    Accordingly, it may be seen that Judd J did not decide that there was no power to freeze assets of the trust under the court’s rules. (While we note that his Honour referred at [47] to r 37A.05(4) of the Supreme Court (General Civil Procedures) Rules 2005 (Vic), that reference was likely intended to be a reference to r 37A.05(5) as r 37A.05(4) concerns freezing orders in respect of judgment debtors or prospective judgment debtors, whereas r 37A.05(5) is the rule in respect of third parties, and is relevantly in the same terms as r 7.35(5) of the Rules.) Rather, Judd J determined that enjoining Mr Ekelmans exercising his powers under the trust deed would sufficiently prevent the court’s processes being hampered by assets being put beyond the reach of a trustee in bankruptcy. However, as discussed below in connection with Vasiliades, this is not a solution that is available in the present case.

67    Carey (No 6) was also considered in Fordyce v Ryan [2016] QSC 307; [2017] 2 Qd R 240 (Fordyce). Fordyce concerned an application by a trustee in bankruptcy to have a receiver appointed to “wind up” three trusts, including a discretionary trust of which the bankrupt was a general beneficiary and who previously controlled the now-deregistered corporate trustee. In that case, Jackson J said at [37] that it was:

[D]ifficult to accept as a principle of reasoning that a beneficiary’s legal or de facto control of the trustee of a discretionary trust alters the character of the interest of the beneficiary so that it will constitute property of the bankrupt if the beneficiary becomes a bankrupt. To the extent that [Carey (No 6)] might be thought to support such a principle, it has not been followed or applied subsequently and it has been criticised academically.

68    Carey (No 6) did not suggest that there was a principle of the kind rejected — albeit conditionally by the words “to the extent that…” — by Jackson J in Fordyce.

69    As noted, Gordon J applied Carey (No 6) in Vasiliades. In that case, the Deputy Commissioner of Taxation sought freezing orders against a company, Falconbridge, which was the trustee of the Vasiliades Family Trust. Mr Vasiliades was, with his wife, one of the specified beneficiaries of the trust. He was also the appointor and was the sole director and sole shareholder of Falconbridge. Falconbridge was the registered owner of real estate. At [60], Gordon J said:

A beneficiary who effectively controls a trustee’s power of selection because he or she is the trustee or one of them and / or has the power to appoint a new trustee may have something approaching a general power and the ownership of the trust property: Australian Securities and Investments Commission v Carey (No 6) (2006) 153 FCR 509; 233 ALR 475; [2006] FCA 814 at [37] (Carey (No 6)).

70    Justice Gordon then asked (at [61]) whether it could be said that:

(a)    Mr Vasiliades, as a beneficiary and person effectively controlling Falconbridge, would have a level of control approaching a “general power and thus a proprietary interest in the income and corpus of the Trust” (referring to Carey (No 6) at [19]); or

(b)    the Trust is controlled by Falconbridge, but the company is Mr Vasiliades’s alter ego, so that it can be said a contingent interest may be identified (referring to Carey (No 6) at [36]) on the basis that it is as good as certain that Mr Vasiliades would receive the benefits of distributions of income or capital or both.

71    Her Honour found it unnecessary finally to resolve the question on the basis that “the Commissioner has a good arguable case that it can be said that Mr Vasiliades does have a contingent interest of the kind identified by French J” in Carey (No 6): at [61]. Her Honour considered, however, that it was not appropriate to continue the freezing order on the basis that it was appropriate to order that Mr Vasiliades not exercise any power of distribution in respect of the Trust including any power as director of any trustee of the trust (referring here to Ekelmans): at [71].

72    While Gordon J, in Vasiliades, ultimately settled on a less intrusive form of order — namely an order restraining Mr Vasiliades from taking any action that would result in any trust income or capital being distributed — it is clear that Gordon J accepted that Mr Vasiliades had a “contingent interest”, following Carey (No 6). It is also apparent that her Honour considered that the Court’s powers should be exercised in a way that avoided any possibility that the trust would be administered by its corporate trustee in a way that would see its assets and income dissipated. There was no suggestion that an “enforcement pathway” had to be identified by which any final judgment against Mr Vasiliades could be satisfied by assets held in the trust.

73    The next case considering Carey (No 6) is Pleash v Tucker [2018] FCAFC 144; (2018) 264 FCR 374 (Pleash). That case concerned whether financial documents of a trust ought to be produced on a liquidator’s examination summons where the examinee had no proprietary interest in the trust assets, but the liquidator contended that they may be available to satisfy a prospective judgment debt: at [1] (McKerracher, Farrell and Banks-Smith JJ).

74    Noting that the liquidators, at whose behest the examination summons had been issued, relied on Carey (No 6), the Full Court (McKerracher, Farrell and Banks-Smith JJ) referred to the consideration, in Fordyce, of the application of the reasoning in Carey (No 6) to individual property rights of a trustee in bankruptcy to gain access to the income and capital of a discretionary trust: at [43]. The Full Court agreed with Jackson J’s analysis and conclusion that a beneficiary’s de facto or legal control of the trustee of a discretionary trust does not “[alter] the character of the interest of the beneficiary such that it will constitute property of the bankrupt if the beneficiary becomes bankrupt”, a conclusion the Full Court also considered to be consistent with Swishette Pty Ltd v Australian Competition and Consumer Commission [2017] FCAFC 45; (2017) 249 FCR 483 (Swishette): at [45]–[46]. But, as we have noted, Jackson J’s rejection of Carey (No 6) in Fordyce was a rejection of a general principle that was not advanced by French J in that case.

75    In Swishette, the Full Court (Middleton, Foster and Davies JJ) determined that an order requiring the trustee of a discretionary trust to apply proceeds of the sale of a trust asset to affected consumers was not authorised by s 239 of Sch 2 to the Competition and Consumer Act 2010 (Cth), the Australian Consumer Law. Carey (No 6) was distinguished on the basis that it turned on the term “property”, as it was defined by s 9 of the Corporations Act, whereas s 239 of the Australian Consumer Law does not refer to “property”: at [21]. The order of the primary judge was found to be beyond power because it required the trustee to deal with the proceeds, entirely disregarding its duties as trustee with respect to the application of trust funds.

76    In Swishette, their Honours confirmed orthodox trust law, namely that the objects of a discretionary trust have no beneficial interest in the property of the trust, and their only interest is characterised as a mere expectancy coupled with a right to due administration of the trust: at [26]. The Full Court further stated that the fact that a person may control a trust — there both as appointor and director of the trustee company, “does not give him an interest in the trust property amounting to ownership”: at [26], citing DKLR Holding Co (No 2) Pty Ltd v Commissioner of Stamp Duties (NSW) [1980] 1 NSWLR 510; Gartside v Inland Revenue Commissioners [1968] AC 553 at 617–618. But, as we have emphasised, by its terms, and having regard to the genesis of those terms in Jackson and Cardile, r 7.35(5)(a) does not require that “ownership” be demonstrated. Nor does it require that assets of a discretionary trust can be characterised as property of a beneficiary in a way that was doubted in Pleash.

77    The Appellants referred to Lord Leggatt JSC’s statements (with whom Lords Briggs, Sales and Hamblen JJSC agreed), in Convoy Collateral Ltd v Broad Idea International [2021] UKPC 24; [2022] 2 WLR 703 at [88], that the “ordinary prerequisite” is that the “third party is in possession or control of an asset against which a judgment could be executed” and (citing Cardile among other cases) that “the key question is whether the assets are or would be available to satisfy a judgment through some process of enforcement”. Whatever the qualification “ordinary” might present, it may be accepted that where there is no conceivable prospect that the assets, dealings with which are to be restrained, could be available in satisfaction of a judgment, a freezing order would not serve the requisite purpose. But that is not to embrace any suggestion that a freezing order will never be made unless a clear and strong enforcement pathway is laid out at the stage of applying for the freezing order.

78    More recently, in Vines, in the matter of the Bankrupt Estate of Mitchell (No 2) [2024] FCA 1378 (Vines), Feutrill J surveyed the authorities (including Carey (No 6), Fordyce and Pleash) in addressing an amendment application. Having noted the similarity between the definition of “property” considered by French J in Carey (No 6) and the definition of that term in the Bankruptcy Act (which then links to the term “property of the bankrupt” in s 58), his Honour concluded as follows in allowing the disputed amendment (at [45]–[46], emphasis added):

With due respect to those who have expressed different views, I consider the law to be sufficiently unsettled that it is reasonably arguable that such a beneficiary’s interest in the discretionary trust may be regarded as contingent property within the meaning of property in s 5 the Bankruptcy Act.

It follows that, having regard to the terms of the trust deeds, the Bankrupt’s power as Appointor and effective control over the trustees of the trusts, it is reasonably arguable that the Bankrupt has effective control of the power of selection under the trust deeds approaching a general power and something akin to a contingent proprietary interest in the income and corpus of the trusts. ...

79    As already discussed, (see above at paragraph 43ff), where a judgment debtor or prospective judgment debtor enjoys extensive powers in respect of a trust, including a power of appointment, the question of whether assets held in the trust might ultimately be available in satisfaction of a judgment debt involves complexities. Not only that, but as freezing orders are often obtained in urgent circumstances, there are limits to the extent to which such complexities can be explored and determined in the context of an application for freezing orders. It is, again, salutary to remember that the High Court has, more than once, stated that the assets of a prospective or actual judgment debtor include claims and expectancies (Jackson and Cardile).

80    It is unremarkable that the ultimate availability of enforcement processes (including through the exercise of the powers of a trustee in bankruptcy) in respect of such claims and expectancies may not be immediately clear and well-established (ie they may not adopt a tried and tested enforcement pathway). In this regard, we note that the actions that a trustee in bankruptcy may take are not necessarily confined to actions dependent on any conclusion that the assets of the trust are property of the bankrupt. That proposition was doubted in Pleash. Rather, the actions that a trustee in bankruptcy may consider may also concern a bankrupt’s power of appointment and/or any property constituted by a beneficiary’s right to due consideration by the trustee, it being widely recognised as a chose in action (or at least an equitable chose in action): Dwyer v Ross (1992) 34 FCR 463 at 466 (Davies J); Kennon v Spry [2008] HCA 56; (2008) 238 CLR 366 at [75] (French CJ); Public Trustee v Smith [2008] NSWSC 397; (2008) 1 ASTLR 488 at [127] (White J); Anchorage at 79–80 (Owen J, Rowland and Ipp JJ agreeing); Vines at [33] (Feutrill J).

DISPOSITION OF THE APPEAL

81    Mr Filippini was in a position to control what dispositions were made by the three trusts. An inference as to control arose at a practical level, given Mr Filippini’s actions in operating the bank account of a different trust without consulting the trustee, Mrs Filippini; his quite possibly having signed BASs for the trustee of the R&D Trust (when he was not the trustee); and arrangements under which instructions were given to the accountant using an email account that did not make it apparent from whom the instructions were being given. There was no challenge on the appeal to the primary judge’s control findings in respect of the A&M Trust, the R&D Trust, or his Honour’s adoption of the same inferences in respect of the FPC Vic Trust.

82    In addition to such practical control, Mr Filippini had the capacity to replace the trustee of each of the three trusts by the exercise of his power of appointment and could appoint himself trustee. He could also accelerate the vesting date of each trust.

83    Of course, Mr Filippini was also a beneficiary of each trust. As a beneficiary of a discretionary trust, Mr Filippini had — at least — an expectancy. But his expectancy is not of the same character as the expectancy enjoyed by a person within the class of beneficiaries in a discretionary trust. Mr Filippini’s capacity to control each trust, and the disposition of its income and capital, makes his expectancy one with significant value. Mr Filippini’s level of control, coupled with his status as a beneficiary, means that he has “something approaching a general power and the ownership of trust property”, as French J put it in Carey (No 6), which expression was adopted and applied by Gordon J in Vasiliades, and by the primary judge in applying Vasiliades. The word “approaching” should not be overlooked. To say that Mr Filippini has something “approaching” ownership of trust property is not to say that he is the owner of trust assets.

84    The flaw in the Appellants’ argument is that it treats Carey (No 6) and Vasiliades as departing from trust law orthodoxies; they do not. Insofar as Carey (No 6) bears on the making of freezing orders — recognising that French J was considering the appointment of receivers pursuant to s 1323 and the statutory definition of “property” in s 9 of the Corporations Act — its relevance lies in the recognition that mere beneficiaries of discretionary trusts entitled only to the proper administration of the trust, are not in the same position as beneficiaries who enjoy wide powers.

85    In identifying the assets of the judgment debtor or prospective judgment debtor that fall within r 7.35(5)(a) and so enliven the power under the Rules, we are inclined to think that it is not necessary, and will usually not be helpful, to apply labels such as the “contingent interest” referred to by French J in Carey (No 6) in the context of freezing orders against third parties in respect of trust property. Justice French’s reference to an interest being “contingent” in that way was a characterisation that was useful in the context of applying a statutory definition of property that included interests in property that were contingent.

86    In determining whether r 7.35(5)(a) is enlivened, it is not necessary to adopt that approach (and characterise a beneficiary as having a contingent interest, or something approaching ownership) because the rule applies, by its terms, to expectancies. We note, however, that the “contingent interest” analysis may have more of a role to play in considering the utility of freezing orders (see paragraph 91 below). The terms of r 7.35(5)(a) reflect, as we have explained, the holdings in Jackson and Cardile concerning the availability of freezing orders to avoid dealings with claims and expectancies that would undermine the Court’s processes.

87    It is important also to remember that the terms of the Rules concerning freezing orders do not purport to exhaust or limit the s 23 (of the Act) power of this Court: r 7.35(6); r 7.36. However, as Mr Filippini clearly has an expectancy, and the trustees are in a position of control or influence concerning that asset, the enlivening criteria of r 7.35(5)(a)(ii) are satisfied and it is not necessary to have recourse to s 23 outside its expression in the Rules.

88    It will be clear from our earlier discussion of the Court’s power to make a freezing order, that we do not accept the Appellants’ argument that the object of a freezing order — that which must not be dealt with by the person against whom the order is made — must be the same as the asset that enlivens the power as it is expressed in r 7.35(5)(a). An “expectancy” is not an existing chose in action (Ansett Australia Ltd v Travel Software Solutions Pty Ltd [2007] VSC 326; (2007) 214 FLR 203 at [51] (Hargrave J)); an “expectancy” is not something that can readily be frozen in a clear and effective order of the Court. To give effect to the purpose of a freezing order, it will be necessary for a freezing order to be formulated so that it is effective to prevent the taking of actions that diminish or eradicate the value of the expectancy (see further paragraphs 43–44 and 48 above). In the present case, that supports the primary judge’s making of orders against the trustees specifying the cars and the properties as the objects of the orders.

89    It was suggested by the Appellants that no freezing order can, or should, in exercise of discretion, be made unless the party applying for the order can identify a clear “enforcement pathway” by which the assets that are the object of a freezing order can ultimately be made available to satisfy the judgment debt. While the Appellants contended that no such pathway was identified by Keystone in the present case, that is not an independent ground of appeal, and the parties were at odds regarding whether the point had even been advanced before the primary judge.

90    In any event, in the present case, we consider that Mr Filippini’s expectancy was one worth preserving to avert the prospect of a prospective judgment going unsatisfied because there is enough to suggest that the relevant assets may ultimately be available. As was raised with counsel appearing for the Appellants, by Beach J in the course of the hearing, what a trustee in bankruptcy may be able to do in respect of the trusts, and Mr Filippini’s rights as appointor in particular, is a complex question with no clear answer. That is supported by the analysis of the Full Court of Western Australia in Anchorage to which we have referred and the analysis of Feutrill J of this Court in Vines (see above at paragraphs 57–60 and 78). As we have also explained above at paragraph 79, the actions a trustee in bankruptcy may take are not necessarily limited to such actions as may be available if trust assets were property of the bankruptcy.

91    As we have mentioned above, while we consider the “contingent interest” analysis to be of limited utility in the application of r 7.35(5)(a) of the Rules to determine whether the power expressed in that rule is enlivened, it may have a greater role to play when considering the utility of freezing orders in light of potential enforcement pathways. This is illustrated by the submission of Keystone, relying on the “contingent proprietary interest” analysis of Feutrill J in Vines at [46], to support its argument that it is reasonably arguable that the interest held by Mr Filippini comprises property as defined in s 5 of the Bankruptcy Act, which could vest in his trustee in bankruptcy under s 58.

92    What will be required of an applicant for a freezing order will depend on the circumstances. The Appellants abandoned their initial position that a positive finding, on the balance of probabilities, that assets the subject of a freezing order would be available to satisfy a judgment is required, but maintained that a “good arguable case” is required. They relied on the characterisation of that standard in Nicols as trustee of the bankrupt estate of Manietta v Manietta, in the matter of Manietta [2022] FCA 39 where Cheeseman J considered the authorities in describing a good arguable case as one that is more than barely capable of serious argument, but not necessarily one the judge considers would have more than a fifty percent chance of success: at [49]. Albeit in respect of various integers of an application for freezing orders, the expression “clearly arguable” was used in Anchorage, “good arguable case” in Vasiliades, and “reasonably arguable” in Vines.

93    It may be accepted that an applicant for a freezing order will be required to satisfy the Court that there is a sufficient prospect that the freezing order will have utility to warrant the making of a freezing order, which is acknowledged to be a drastic and intrusive order. What will be required of an applicant will vary depending on factors that include the urgency with which the application is brought on and the factual and legal uncertainties that ultimately bear on whether assets that are referred to in a freezing order may be available in satisfaction of a judgment. For example, a case involving a potential avenue to enforcement that follows a well-understood legal path, but is subject to uncertainties regarding the facts, may not be treated in the same way as a case involving potential pathways to enforcement that involve greater legal uncertainty.

94    While the pathway by which enforcement action may ultimately occur — if Mr Filippini is subject to a judgment debt, and elects to become bankrupt rather than to use his powers to access assets in the trusts — is not well-trodden, on the facts of this case, it is sufficient that there are potential avenues by which those assets may ultimately be available to contribute to the satisfaction of the prospective judgment debt.

95    In our view, the structure of rr 7.35(5)(a) and (b) reinforces that the clear identification of an enforcement pathway cannot be a matter that must be established by the applicant for a freezing order under r 7.35(5)(a), whatever language is attached to the expression of the standard to which that must be established.

96    Rule 7.35(5)(a) refers to there being a “danger that a judgment or prospective judgment will be wholly or partly unsatisfied” because of either of the matters specified in (i) or (ii) being established (the third party holding or using etc a power of disposition over assets of the potential debtor, or being in possession or control or influence concerning such assets). Rule 7.35(5)(b) applies where “a process in the Court is or may ultimately be available to the applicant as a result of a judgment or prospective judgment, under which process the third party may be obliged to disgorge assets or contribute toward satisfying the judgment or prospective judgment”. If a clear enforcement pathway has to be identified and established by the applicant for a freezing order against a third party in every case, satisfaction of r 7.35(5)(b) would be rendered a precondition to enlivening r 7.35(5)(a). But those two subrules are disjunctive, consistent with the disjunctive expression in Cardile; subrule (b) is preceded by the word “or” and constitutes an independent basis upon which a freezing order may be made against a third party.

97    Bringing these matters together, we consider that r 7.35(5)(a) was enlivened on the basis that Mr Filippini has an expectancy in relation to each trust, and the trustees of the three trusts were in a position of control or influence concerning the assets of Mr Filippini, being those expectancies. The extensive control of Mr Filippini shows those expectancies to have real value; cf the position of the beneficiary of a discretionary trust who has no powers. There is utility in preserving those expectancies, for the reasons explained. In order to preserve the value of the expectancies, and prevent prejudice to the Court’s processes by their being denuded of value by dealings with trust income and assets, freezing orders need to be framed to prevent dealings with identifiable assets of the trusts.

98    While the course of our reasoning departs from that of the primary judge — who, it appears, adopted the “contingent interest” approach in Vasiliades (J [49], [60]) — we do not consider that the primary judge erred in making freezing orders that captured the two properties and the cars. Accordingly, the appeal will be dismissed.

99    We should address some other points raised by the Appellants.

100    The Appellants contended that it ought not be accepted that Mr Filippini had a contingent interest because it could not be said that it was “as good as certain” that he would exercise his powers to direct income and assets of the trusts his way. Rather, they contended, it was obvious that he would not exercise his powers in that way, as such assets and income would fall into the hands of his putative creditors. The expression “as good as certain” was used by Nourse J in Inland Revenue Commissioners v Trustees of Sir John Aird’s Settlement (No 1) [1982] 2 All ER 929 at 940; [1982] 1 WLR 270 at 276–277 in connection with contingencies, and adopted and referred to by French J in Carey (No 6) in the context of his Honour’s discussion of contingent interests. Given that the freezing orders do not need to be supported by any “contingent interest” analysis, it is not necessary to address the Appellants’ arguments about what it is likely that Mr Filippini might, or might not, do if faced with a judgment debt in the future.

101    The Appellants offered, as they did before the primary judge, that Mr Filippini’s right of appointment be restrained. It was suggested that, consistent with Vasiliades and Ekelmans, such a restraint ought to be regarded as sufficient. No undertaking was offered on the part of Mrs Filippini, the trustee of two of the trusts. In Vasiliades, Mr Vasiliades was the sole director and shareholder of the corporate trustee: at [3]. A restraint was ordered by Gordon J that extended to his acting as director of the trustee. In Ekelmans, Mr Ekelmans was one of three directors of the corporate trustee (with two family members), as well as having powers under the trust deed: at [42]. As any restraint on Mr Filippini would not restrain Mrs Filippini, or FPC (the trustee of the FPC Vic Trust), the course taken in those cases is not available as a less drastic alternative to a freezing order on the facts of this case.

102    Finally, and as noted above, although the terms of the trust deed for the R&D Trust were not identical to the terms of the trust deed for the other trusts (see paragraph 25 above), no submissions were made that the difference bore on the appeal.

CONCLUSION

103    The application for leave to appeal will be allowed. The appeal will be dismissed with costs.

Associate:

Dated: 22 May 2026