FEDERAL COURT OF AUSTRALIA

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

ORDERS

THE COURT ORDERS THAT:

1.    The applicants' application for summary judgment in respect of the orders sought at paragraphs 1 and 2 of the second amended originating application is dismissed.

2.    By 24 January 2020, and save to the extent that a document has been annexed to an affidavit filed in the proceeding before the date of this order, the applicants must provide particular discovery of documents in the following categories, verified by affidavit:

(a)    all documents, including but not limited to bank statements, deposit slips, invoices, cheques, cheque butts, withdrawal forms, transfer instructions and receipts evidencing the source of the funds held in Bank of Queensland account number [redacted] in the name of Hartmut Frigger and in Bank of Queensland account number [redacted] in the name of Mrs Angela Frigger including but not limited to:

(i)    the receipt of the funds or part of them from activities conducted in connection with the real property and shares described in subparagraphs (c) and (d) below; and

(ii)    the transfer of the funds or any part of them from accounts held in the name of any or all of the applicants and the trustees (including the former trustees) of the Frigger Super Fund including the following accounts:

(A)    Bank of Queensland account number [redacted] in the name of Angela Frigger.

(B)    HSBC Day to Day Account number [redacted] in the name of Hartmut Frigger.

(C)    HSBC Serious Saver Account number [redacted] in the name of Hartmut Frigger.

(D)    HSBC Serious Saver Account number [redacted] in the name of Mrs A Frigger.

(E)    St George Bank Maxi Saver account number [redacted] in the name of Mrs Angela Frigger.

(F)    Citibank term deposit in the name of Hartmut Frigger with Product Number [redacted].

(G)    Bankwest Hero Saver account number [redacted] in the name of Mr HH Frigger.

(H)    Bankwest Retirement Advantage Account number [redacted] in the name of Mrs ACT Frigger.

(b)    All documents, including but not limited to all bank statements, application forms, agreements, accounts and correspondence evidencing the person or entities which have or had a legal or beneficial interest in the accounts listed in sub-paragraph (a) above.

(c)    All documents, including those listed in sub-paragraphs (1) to (8) below, evidencing the purchase, sale, transfer or conveyance of, and the identity of the legal and beneficial owner of, [redacted] Perth, [redacted] Hobart, [redacted] Armadale, [redacted] Bayswater, and [redacted] Como:

(i)    contracts or agreements for the transfer, purchase, sale, lease or licence of the property;

(ii)    settlement statements;

(iii)    declarations of trust;

(iv)    insurance policies;

(v)    financial accounts;

(vi)    tax assessments; and

(vii)    any mortgages charges or other security interests granted over the property.

(d)    All documents that evidence the purchase, sale, transfer, subscription or other conveyance of, and the identity of the legal and beneficial owner of, the securities identified in CommSec portfolio account number [redacted] including but not limited to the following to the extent that they evidence those matters:

(i)    buy and sell notes;

(ii)    holding statements (CHESS or issuer sponsored);

(iii)    correspondence;

(iv)    dividend statements;

(v)    invoices;

(vi)    receipts;

(vii)    financial accounts or statements;

(viii)    off-market transfers;

(ix)    security registration documents; and

(x)    tax lodgements and assessments.

3.    The parties have liberty to apply in relation to the time for compliance with paragraph 2 of these orders.

4.    Costs reserved.

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

REASONS FOR JUDGMENT

JACKSON J:

1    The respondents are the trustees of the bankrupt estate of each of the applicants, Angela and Hartmut Frigger.

2    Mrs Frigger commenced these proceedings against the first respondent, Kelly-Anne Trenfield, seeking declarations that two Bank of Queensland accounts (BOQ1 and BOQ2) are assets of a superannuation fund known as the Frigger Super Fund (FSF), and are not divisible among the creditors of the bankrupt estates. She also sought declarations that two parcels of land, one in Como and one in Bayswater, are assets of the FSF, which are not divisible among creditors. Mr and Mrs Frigger claim that the securities in a portfolio that are contained in a trading account with Commonwealth Securities Limited (CommSec) are also assets of the FSF. I dealt with that aspect of the proceeding in my reasons for dismissing the Friggers' application for certain interlocutory orders in relation to the share portfolio: Frigger v Trenfield [2019] FCA 1746 (Frigger v Trenfield (No 1)).

3    The originating application also seeks other orders that are not relevant to the matters with which these reasons deal. After the commencement of the proceedings Mr Frigger was joined as an applicant and the second respondent, Paul Allen, was joined as a respondent. It is possible as I have explained in Frigger v Trenfield (No 1) that the current trustee of the FSF, H & A Frigger Pty Ltd, will also be joined to the proceeding, but it is not necessary to do so in order to deal with the present interlocutory applications.

4    One of those interlocutory applications has been brought by Mr and Mrs Frigger, for summary judgment in respect of the declarations that BOQ1 and BOQ2 are assets of the FSF. The other has been brought by the respondents seeking specific discovery of documents said to be relevant to the source of the funds in the bank accounts, and the capacity in which the properties and securities are owned.

5    In so far as BOQ1 and BOQ2 are concerned, the parties' respective interlocutory applications are two sides of the same coin. The Friggers are saying, in effect, that the evidence is so compelling that the court should be satisfied, for the purposes of s 31A(1)(b) of the Federal Court of Australia Act 1976 (Cth), that the respondents have no reasonable prospect of successfully defending that part of the proceeding. The respondents are saying, to the contrary, that the documentary evidence that the Friggers have presented so far, together with the documents available to the respondents, do not permit any clear conclusion as to whether BOQ1 and BOQ2, the real property, or the securities are assets of the trust. The respondents say that the position is so unclear that they need discovery even before they put on substantive responsive affidavits.

6    I will therefore deal first with the evidence as to the legal and beneficial ownership of the funds in BOQ1 and BOQ2. My conclusions on that will largely determine the disposition of the summary judgment application, and will go a long way to resolving the discovery application. I will then deal with the question of the extent of the documentary record in relation to beneficial ownership of the real properties. As for the CommSec portfolio, I have already considered the documentary evidence on that subject in Frigger v Trenfield (No 1), but it will be necessary to return to it in relation to the respondents' discovery application.

7    Before dealing with the evidence, I will mention some other basic principles, concerning summary judgment, when property will be subject to a trust, and particular discovery.

Principles - summary judgment

8    The principles to be applied in connection with summary judgment under s 31A(1) of the Federal Court Act and r 26.01(1)(e) of the Federal Court Rules 2011 (Cth) are well established. I summarised them in Quach v Commissioner of Taxation [2019] FCA 1729 at [10]-[12] and will not repeat that summary here.

9    It is necessary to add, as relevant to this application, that where it is a case of summary judgment based on evidence, the power to award summary judgment should be exercised with great care and only where it is clear that there is no real question to be tried: Spencer v Commonwealth of Australia [2010] HCA 28; (2010) 241 CLR 118 at [24], quoting from Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87 at 99. Where that requires consideration of apparently complex questions of fact, it is unlikely to be appropriate to resolve those questions at a summary judgment stage by conducting 'a mini-trial' on the documents, without discovery and without oral evidence. That is not the object of the rule. It is designed to deal with cases that are not fit for trial at all: Three Rivers District Council v Bank of England (No 3) [2003] 2 AC 1 at 261 [95], endorsed in Spencer at [26]. On the other hand, an assertion by a party that there is a real question to be decided must be examined with a critical eye: Jefferson Ford Pty Ltd v Ford Motor Company of Australia Ltd [2008] FCAFC 60; (2008) 167 FCR 372 at [23].

10    I also need to say something more about the onus of proof. The applicants submit that the authorities show that once an applicant establishes a prima facie case, the onus shifts to the respondent. They submit that the respondents have not discharged that onus here.

11    I accept that there are cases which may be read as supporting the submission as to the shifting onus. Reeves J surveyed them in Australian Securities and Investments Commission v Cassimatis [2013] FCA 641; (2013) 220 FCR 256 at [51]-[67]. As his Honour's analysis establishes, the source of that statement is usually said to be the judgment of Gordon J in Jefferson Ford at [127]. That statement has been endorsed and relied on in numerous subsequent decisions. However it is important to read it in full (citations removed):

Thirdly, each case must be considered separately. No particular hard and fast rules can be set down, only general principles. One principle is that the moving party bears the onus of persuading the court that the opponent has no reasonable prospect of success. As noted earlier, however, s 31A has lessened the standard that must be met. In that regard, it must be emphasised that once a moving party has established a prima facie case that the opponent has no reasonable prospect of success, the opposing party must respond by pointing to specific factual or evidentiary disputes that make a trial necessary; general or non-particularised denials will be insufficient to defeat the motion. In other words, it is inappropriate in defence of a claim for judgment under s 31A of the Federal Court Act to seek to defend by merely putting a claimant to formal proof. This is not a new concept. It finds earlier reflection in ss 190(4) and 191 of the Evidence Act 1995 (Cth) and O 33, 34 and 34B of the Federal Court Rules.

12    In Cassimatis at [66] Reeves J expressed doubt that this results in a two-stage test with notions of shifting onus. I share that doubt. Gordon J said that the onus of persuading the court that the criterion in s 31A is satisfied is on the applicant. Her Honour did not say that if the applicant establishes a prima facie case for the relief sought, the onus shifts. Rather, what the applicant must establish is a prima facie case that 'the opponent has no reasonable prospect of success'. So an assessment of the strength of the evidence presented by the applicant is required.

13    Ultimately, her Honour's point, as I read it, was that to defend against a prima facie case that a respondent has no reasonable prospect of success, generalised denials or merely putting the applicant to proof will not be enough. So much may be readily accepted. But that is not the same as a shifting onus of proof. If any onus shifts, it is the onus 'to identify specific factual or evidentiary disputes to make a trial necessary': Blakeley v National Australia Bank [2018] FCA 796 at [31] (McKerracher J).

Trusts, trust property and bankruptcy

14    In Frigger v Trenfield (No 1), I set out some basic principles as to when property will be trust property, in the absence of an express declaration of trust, and the significance of that in the present context of bankruptcy. I will not repeat those principles here.

15    As far as BOQ1 and BOQ2 are concerned, to succeed in their application the Friggers have to establish that, at the commencement of their bankruptcy, those accounts either did not belong to or were not vested in them, or if they were, they were held on trust for another person. As will be seen, BOQ1 is in Mr Frigger's name and BOQ2 is in Mrs Frigger's name. So they cannot establish that the accounts simply did not belong to them; what they claim is that they were held on trust for another person because they were held subject to the trusts of the FSF.

16    The FSF was in existence when each of BOQ1 and BOQ2 were opened. So the question is whether the accounts were settled on the terms of the FSF, on the basis that they were to be held subject to the trust. Conceivably, this could be done by transfer of the money from a source not already subject to the trust, or as a result of transactions by which the trustee of the trust exchanged other trust assets for BOQ1 and BOQ2. It is clear from the evidence that the Friggers have presented that they allege the latter is the case. They effectively seek to trace the funds back to other accounts which, they say, were trust assets.

17    But while it may be accepted that if a trustee exchanges one asset for another, an intention that the latter asset is subject to the trusts may be more readily inferred, it nevertheless remains the case that the intention must be objectively manifest in all the circumstances. And if the putative trustee relies on an ultimate source of the funds as being subject to the trust, there must be evidence establishing that at the point when the funds first became subject to the trust, there was an objectively manifested intention to that effect.

Principles - discovery

18    In broad terms, the discovery sought is of documents evidencing the sources of funds in BOQ1, both the immediate source of the funds deposited in it and sources traced back beyond the immediate source. That includes documents evidencing the receipt of funds from certain activities connected with real property and share investments, and the transfer of funds from a number of other bank accounts in the name of one or the other of the applicants. It also includes documents evidencing the persons who have a legal or beneficial interest in each of the bank accounts, and documents evidencing the purchase or sale of, and the legal and beneficial ownership of, the properties in Como and Bayswater, three other properties, and the CommSec portfolio.

19    A party must not apply for an order for discovery unless the making of the order sought will facilitate the just resolution of the proceeding as quickly, inexpensively and efficiently as possible: Federal Court Rules r 20.11. That reflects the overarching purpose referred to in s 37M(1) of the Federal Court Act, namely to facilitate the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible: Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd (No 2) [2011] FCA 1396 at [21].

20    The minute of orders filed by the respondents specifies that the orders are sought under r 20.21 of the Federal Court Rules. That rule is commonly used as the basis of seeking discovery of particular documents where a party has already given discovery and it is said to be deficient. However in Dennis v Chambers Investment Planners [2012] FCA 63; (2012) 201 FCR 321 at [39], Barker J observed:

I see no reason why a party may not apply under r 20.21 following either standard or non-standard discovery, or even (exceptionally) before general discovery, to seek particular discovery of a document or category of documents that is or are said to be relevant. In such a case it will be incumbent on the party seeking particular discovery to satisfy the Court that the document should be discovered in the circumstances of the case. The document or category of documents must be relevant, directly or indirectly. Additionally, the Court would, I think, need to be satisfied that discovery of the document will facilitate the efficient conduct of the proceedings. If, for example, one can see that the documents are likely to be relied on at trial, and if not provided during the pre-trial period would likely later result in an adjournment of the trial, then it may make good sense for the Court to require particular discovery at the pre-trial stage. That said, each application will depend on its own facts and circumstances and will be affected by the underlying policy of the new Rules to limit the scope of discovery and to advance the overarching purpose of civil procedure in the Court as stated by s 37M of the FCA Act.

That is the approach I will take here.

21    The applicants have drawn the court's attention to r 20.13(3) of the Federal Court Rules, which relevantly provides that an application for discovery may not be made until all respondents have filed an affidavit in response to the affidavit that was filed in support of the originating application. The respondents seem to accept that the rule applies to their application, and sought a dispensation from it under r 1.34. However the placement and context of r 20.13(3) in the overall structure of Division 20.2 of the Rules, concerning discovery, suggests that this only applies to the applications that are authorised by r 20.13(1), being the applications for standard or non-standard and more extensive discovery that are contemplated in r 20.14 and r 20.15. Rule 20.21 authorises a party to make an application for particular discovery separately to the authorisation in r 20.13(1). So I doubt that r 20.13(3) governs an application under r 20.21. Even if it does, in the course of resisting Mr and Mrs Frigger's applications for summary judgment and injunctions the respondents have filed affidavits that do, in substance, respond to the affidavit accompanying the originating application. It is true that the gist of the affidavits in response is to say that Ms Trenfield does not know the position, rather than to firmly refute Mrs Frigger's first affidavit, but in the circumstances I will outline I accept that it is not possible for the respondents to go further at this stage. I will proceed on the basis that in the present case r 20.13(3) does not confine the discretion conferred by r 20.21.

Assessment of evidence that BOQ1 and BOQ2 were assets of the FSF

22    I will now turn to the first of the substantive questions I identified at the outset: the extent to which the evidence that the Friggers have adduced establishes that BOQ1 and BOQ2 were assets of the FSF at the time of commencement of the bankruptcy. As I have said, that question will largely determine both the Friggers' summary judgment application, and the respondents' discovery application in respect of those accounts.

23    The following summary of the affidavits is given in order to answer that question for the purposes of the interlocutory applications. It does not include firm findings by me about any of the issues. Unless I determine that the respondents have no reasonable prospect of defending the Friggers' claim that the accounts are assets of the FSF, such findings must await trial.

The FSF

24    I dealt with the history of the FSF in Frigger v Trenfield (No 1). In summary:

(1)    It was established by way of trust deed on 1 July 1997. The original trustee was Serenity Holdings Pty Ltd, which later changed its name to Computer Accounting and Tax Pty Ltd (CAT).

(2)    Mr and Mrs Frigger became the trustees of the FSF on 1 January 2008 and, at least by July 2010, were the sole trustees of the fund.

(3)    Mr and Mrs Frigger became bankrupt on 20 July 2018. By July 2018 their two adult children had also been appointed trustees. In that month, all four individuals were replaced as trustees by the current trustee, H & A Frigger Pty Ltd.

25    The precise date on which the most recent change in trustees occurred is in controversy. Mrs Frigger's first affidavit says that she and her husband ceased to be trustees '[s]ince 21 July 2018' and she says in a written submission that the removal of the Friggers as trustees was 'backdated to 1 July 2018 for practical purposes'. But the deed of amendment is dated 1 July 2018 and there is no mention of 21 July 2018 in it. The Friggers also rely on a notification of change of trustee to the Australian Business Register that they filed on 21 July 2018 (a day after the sequestration order) removing them as individual trustees and replacing them with H & A Frigger Pty Ltd. But that form says that the changes were to take effect from 1 July 2018, so it does not necessarily support their claim that they were trustees of the fund at the time that BOQ1 was opened. Finally, they rely on a minute of meeting of the trustees of the FSF bearing the date 21 July 2018, recording resolutions that the four individual trustees be removed and replaced with H & A Frigger Pty Ltd. I accept that this is potentially probative evidence of the date of the change, although without the benefit of cross examination and all the context provided by a full hearing, I make no finding about when (or whether) the change of trustees occurred.

26    In any event, Mrs Frigger's first affidavit claims that since the commencement of the fund in 1997, she and her husband 'took all steps to ensure that all of our assets would be held in FSF (other than our principal residence)' to obtain various tax benefits and to save for retirement. Over time, she says, various assets were contributed to the fund. That includes real property and the proceeds of sale of a service station. This evidence is all at a high level of generality. For the most part, documentation of these contributions or any specific evidence to establish that they were transferred to the Friggers in their capacity as trustee of the FSF are absent from the affidavits.

27    Mrs Frigger deposes that all income earned by the FSF is paid into a Bankwest Retirement Advantage account in her name. Allocated pensions are paid from that account, and all surplus funds are withdrawn from the account and 'deposited into accounts such as BOQ1 to earn higher interest'.

28    As I have indicated, it appears that the Friggers claim that the money in BOQ1 came from sources that were already assets of the FSF. They do not claim that the money became trust property for the first time when it was deposited into BOQ1. In the survey that now follows, it is convenient to start with BOQ1 and trace backwards to see what the evidence reveals about the source of the funds and the extent to which it shows that the source was trust assets or a transfer of assets into the trust.

BOQ1

29    Ms Trenfield has obtained and produced two bank statements for BOQ1. They show that the account is in Mr Frigger's name. The statements make no reference to the FSF. They show that the account was opened on 2 July 2018 by a deposit of a certain amount. A letter from the Bank of Queensland to the respondents dated 17 October 2018 indicates that this deposit came from BOQ2.

30    BOQ1 is said to contain funds that have been earned by the FSF from rental income from various investment properties, dividends from a share portfolio, and bank interest. However as will be seen, that is not a description of the immediate source of the funds.

31    Mrs Frigger's first affidavit says that Mr Frigger holds BOQ1 as trustee of the FSF. It is not immediately obvious how that could be if Mr Frigger has not been a trustee of the fund from 1 July 2018. But I have already noted the Frigger's submission that the change occurred on 21 July 2018 and was backdated to 1 July 2018.

32    There are a number of internet banking printouts in relation to BOQ1 in evidence. These say 'Frigger Super Fund' under a heading 'Account Name'. But it is not apparent from the evidence who gave it this denotation, when or how. It may be that was a field that a user could amend for him or herself. There is an email from Bank of Queensland dated 19 October 2018 which tends to confirm that. In it, a bank officer suggests that Mr Frigger changed the denotation through internet banking, and that it 'is not the true legal title used to open the account'. In any event, there is no evidence as to when the account was given the FSF designation. In the absence of further evidence, I place no weight on the designation in an internet banking printout.

33    There is an email dated 13 July 2018 from Mr Frigger to Bank of Queensland notifying Bank of Queensland of a tax file number for the account, which appears to be the tax file number of the FSF. I accept that this is capable of pointing to an intention on the part of Mr Frigger that the money in the account is an asset of the FSF. But by itself, it is hardly compelling.

34    On 24 July 2018 the account received a further deposit. In an affidavit sworn 24 July 2019 Mrs Frigger says that was a cheque deposit 'from BankWest'. There is a bank statement for the Bankwest Retirement Advantage account which shows a cheque withdrawal of the same amount on that date.

BOQ2

35    As I have said, the evidence indicates that BOQ1 was opened with a deposit of an amount that had been withdrawn from BOQ2. There is a statement for that account in evidence. It shows that the account was opened on 2 July 2018 with a deposit of an amount that was more than $50. So all but $50 of that deposit was withdrawn and deposited in BOQ1 on the same day.

36    The statement shows that BOQ2 is in Mrs Frigger's name. The statement makes no reference to the FSF.

37    Mrs Frigger's evidence is that she and Mr Frigger engaged in a pattern of opening new accounts and transferring funds so as to earn the highest bank interest available from time to time. That does not explain why there was a deposit of funds and immediate withdrawal of the same funds into and out of BOQ2 on the same day. The funds appear to have been held in a third Bank of Queensland account which I will describe shortly. In an affidavit sworn 25 July 2019, Mrs Frigger says that Bank of Queensland advised her that it was not possible to transfer the funds from that account to (seemingly) BOQ1. There is no documentation verifying this statement. On the face of it, the suggestion that it is not possible to transfer funds directly from one bank account to another account with the same bank is odd.

BOQ3

38    The 17 October 2018 letter from the Bank of Queensland indicates that BOQ2 was opened by a transfer of funds from a third Bank of Queensland account (BOQ3).

39    Ms Trenfield has obtained and produced two bank statements for BOQ3. They show that the account was in Mrs Frigger's name, but make no reference to the FSF. Mrs Frigger has annexed an internet banking printout which says the account name for BOQ3 was 'Frigger Super Fund' but I have already explained why I place no weight on such material at this stage of the proceedings.

40    The statements show that BOQ3 was opened on 1 March 2018 by a cheque deposit. Mrs Frigger has produced a copy of a bank cheque from HSBC for the relevant amount and bearing that date. There was also a deposit into the account on 2 March 2018. Mrs Frigger's evidence is that this comes from the Bankwest account.

41    The total balance of BOQ3 as at 30 June 2018 (before a credit of interest on that day) corresponds with a line item for 'BOQ websavings' shown in a balance sheet of the FSF 'As of June 2018'. But the balance sheet is headed 'H & A Frigger atf Frigger Super Fund', suggesting that it was generated some time after 1 July 2018 when that company became trustee of the FSF. According to the Friggers' case, the heading would mean it was generated after 21 July 2018, and therefore after the sequestration order. There is no evidence as to when it was prepared or by whom, although Mrs Frigger's first affidavit says that she managed all of the accounting records of the FSF, so it may well have been her. In Frigger v Trenfield (No 1) at [46]-[47] I explained the limited use to which this document can be put. It does not establish that the respondents have no reasonable prospect of defending against the allegation that the funds in BOQ1 are held on trust on the terms of the FSF.

HSBC accounts

42    Mrs Frigger's affidavit says that BOQ2 was opened by the deposit of funds previously held in HSBC bank accounts. But the evidence I have described suggests that those accounts were not the immediate source of the funds; BOQ3 was.

43    There are bank statements in evidence indicating that funds in two HSBC accounts in 2017 through to 2018 added up to an amount approximating the amount of the HSBC bank cheque which was deposited into BOQ3. One of the accounts was in Mrs Frigger's name. The other was in Mr Frigger's.

44    None of those bank statements mention the FSF. The Friggers submit that the accounts were in their respective names as 'trustee of the Frigger Super Fund'. But the only documentary evidence pointing to that is one document, apparently an invoice issued on 1 October 2017 for rent for a property in Hobart, which is headed 'Angela and Hartmut Frigger atf Frigger Super Fund' which directs payment to one of the HSBC accounts. I accept that is relevant but, once again, by itself it is hardly conclusive.

Citibank, St George and Bankwest accounts

45    The trail of transfers of funds is asserted to start, at least in part, at the Bankwest Retirement Advantage account. While on the evidence in Mrs Frigger's first affidavit, the trail was indistinct, Ms Trenfield has subsequently obtained and produced statements from Bankwest that provide more clarity. In particular, they show cheque withdrawals in amounts and on dates that correspond to the deposits into the HSBC accounts. They also show, later, a withdrawal by cheque which may correspond to the deposit of 2 March 2018 into BOQ3 I have mentioned above.

46    The Bankwest Retirement Advantage account is in Mrs Frigger's name. The account statements make no reference to the FSF. There is one invoice in evidence, which on its face is issued by H & A Frigger as trustee for the FSF which directs payment to this account. But it is dated 5 February 2019. As it postdates the sequestration order it gives little support to the Friggers' case as to the ownership of BOQ1 and BOQ2 as at the date of that order.

47    Other than that, there are only two pieces of evidence that the Bankwest Retirement Advantage account was an asset of the FSF. One is a statement to that effect in Mrs Frigger's first affidavit. This is an assertion at a high level of generality.

48    The other is a statement in another affidavit of Mrs Frigger's that 'After providing evidence and explanations, the Official Trustee determined the Bankwest Account is superannuation funds not available for distribution to creditors and requested Bankwest to remove the restriction'. The Official Trustee was Mr and Mrs Friggers' first trustee in bankruptcy, with the respondents becoming the trustees in bankruptcy on 31 August 2018. It does not appear that there is any freeze on the Bankwest Retirement Advantage account. But there is no detail of the 'evidence and explanations' and no documentary evidence as to what Mrs Frigger asserts was the Official Trustee's conclusion.

49    Mrs Frigger's first affidavit of 6 March 2019 annexed one audit report which, among other things, expressed the opinion that each trustee of the FSF had complied with the Superannuation Industry (Supervision) Act 1993 (Cth) and regulations for the year ended 30 June 2016. But that annexure did not contain any financial statements or any other information establishing what the assets of the trust were at that time, let alone as at the date of the bankruptcy in 2018.

The respondents' position

50    Ms Trenfield has sworn four substantive affidavits in support of her application for discovery and in opposition to the application for summary judgment.

51    In the first affidavit, sworn on 12 June 2019, she said that she was not in a position to form a concluded view as to the merits of the applicants' contentions in relation to the beneficial ownership of the money in BOQ1 and the Como and Bayswater properties. That is partly because those assets were held in the name of one or the other of Mr and Mrs Frigger, and not in the name of H & A Frigger Pty Ltd, despite records suggesting that that company was the trustee of the FSF from 1 July 2018. It was also partly based on an affidavit affirmed by Ty Maher, an officer of the Australian Financial Security Authority who was acting on behalf of the Official Trustee while that entity was the trustee of Mr and Mrs Frigger's bankrupt estates. On the basis of information provided by Mrs Frigger, Mr Maher initially requested the Bank of Queensland to lift the freeze on BOQ1. But after receiving more information from the bank, and learning of some findings that had been made in litigation involving Mr and Mrs Frigger, he then asked for the freeze to stay in place. He also corresponded with Mrs Frigger asking for more information about assets said to be part of the FSF but had not received that information from her by 31 August 2018, when the respondents replaced the Official Trustee.

52    In a subsequent affidavit, sworn 28 June 2019, Ms Trenfield provided more detail of her investigations. She said she had access to correspondence from the Bank of Queensland as well as bank statements for BOQ1 and BOQ2 covering roughly two months (2 July to 31 August 2018). She said that none of the documents to which she had access supported the statement in Mrs Frigger's first affidavit that the funds in BOQ1 are income and dividends that have accumulated from assets held by the FSF since 2014.

53    Ms Trenfield deposed that based on the documents annexed to Mrs Frigger's affidavits she (Ms Trenfield) was unable to trace the funds held in BOQ1 and BOQ2 back to the Bankwest Retirement Advantage account. She also said that apart from the bank statements from July to August 2018, there was no evidence as to the source of funds in BOQ2. That may have been so if the exercise were confined to the documents that Mrs Frigger had annexed. But at the time of swearing her second affidavit, Ms Trenfield also had access to the correspondence and bank statements from the Bank of Queensland, which did permit the funds to be traced to the Bankwest account in the way I have described above. Why Ms Trenfield did not refer to that additional evidence in her second affidavit is not explained. It may be that she did not at the time of that affidavit have the HSBC cheque which helped to complete the picture. Mrs Frigger's evidence suggests that the Bank of Queensland did not provide a copy of the cheque until after she asked for it by letter dated 10 July 2019.

54    Ms Trenfield says in the second affidavit that she cannot be satisfied that the conclusions expressed by Mrs Frigger about the source of funds in BOQ1 are correct, so she says she needs discovery of all documents evidencing the source of the funds in BOQ1, and all documents evidencing the person or entities which have or had a legal or beneficial interest in BOQ1 and the other bank accounts to which I have referred.

55    Ms Trenfield also says that she considers that a full and proper investigation as to the ownership of the funds in BOQ1 is required. Ms Trenfield's affidavit said that it is necessary for the applicants to provide discovery 'so that I can consider what position I should take in response to the orders sought by the Applicants' [sic] in these proceedings'. She explains that she does not consider that she can fulfil her duty under s 19(1)(b) of the Bankruptcy Act 1966 (Cth) to determine whether the estate includes property that can be realised to pay a dividend to creditors simply by relying on statements by Mrs Frigger in affidavits. She deposes to her belief that the documents sought in the proposed discovery orders are relevant to determining whether the funds are 'owned by the FSF'. She believes that the documents are relevant to the resolution of the proceedings.

56    These various statements of purpose raise concern about why Ms Trenfield is seeking discovery in these proceedings. It is not the function of the court, in an application by the bankrupts as to the beneficial ownership of the funds, to order discovery to facilitate an investigation by the respondents for the purposes of the discharge of their duties and functions at large. The respondents have ample investigative powers, and it would not be appropriate for them to seek discovery for the purpose of performing their general function of investigation, rather than for the purpose of helping to resolve the issues in dispute in the proceedings.

57    If I were to conclude that the former purpose animates their application for discovery, that would be reason enough to dismiss the application, as an abuse of the process of the court.

58    The applicants have submitted that the application for discovery is an abuse of process. They say that the respondents knew by 17 October 2018 that the 'final piece of evidence' was available, being a copy of the HSBC cheque which was deposited to open BOQ3. That appears to refer to a letter from the Bank of Queensland to the respondents of that date informing them of the deposit, among other things. However that letter does not refer to the source of the deposit, including who drew it and what bank (if any) it was drawn on. It only says that the bank is 'unable to supply copy of cheque [sic] due to privacy reasons'. So there is nothing in the letter indicating that the cheque was the 'final piece of evidence'. The bank did not provide a copy of the cheque until after Mrs Frigger's request on 10 July 2019. It follows that I do not accept the applicants' submission that Ms Trenfield 'deliberately and contumeliously failed to inform the applicants of BOQ's position in this regard'.

59    The applicants also submit that when they refused to comply with a request from the respondents for all financial records of the FSF, Ms Trenfield relied on legal advice 'to minimise her work in the bankruptcy, thus giving her an excuse not to complete the investigation and release the funds'. There is no evidence to support the claim that Ms Trenfield had any such motivation. The letter containing the legal advice to the trustee is in evidence, albeit in highly redacted form. It appears from the parts that are unredacted that the advice was to the effect that while Mr and Mrs Frigger were appealing against the sequestration order, the respondents should do minimal work and incur minimal expenses (but still protect assets if required). That provides no basis for the suggestion that the respondents relied on this as an excuse to delay the release of funds.

60    I have nevertheless considered whether Ms Trenfield's own statements in her affidavits support a finding that the application for discovery is an abuse of process, because it is brought for the collateral purpose of furthering the respondents' investigations. A finding to that effect should not lightly be made. On balance I consider that the statements in Ms Trenfield's affidavit about her desire to pursue investigations are more likely to demonstrate confusion of thought, rather than a collateral purpose. Ultimately, what her affidavits indicate is that the respondents are putting the applicants to proof of their claim that the assets are held on trust under the terms of the FSF. But they go further than just formally requiring proof (cf. the quote from Jefferson Ford above). They identify, in detail, numerous uncertainties which they say arise on the state of the evidence. That is an appropriate response in a situation like the present, where the documents that go to establishing the beneficial ownership of the funds are likely to be largely in the possession of Mr and Mrs Frigger. Ms Trenfield says discovery is necessary for the purpose of resolving the issues raised, so as to permit her to take an informed position on the orders the Friggers seek. Plainly, it would be inappropriate for the respondents, as trustees in bankruptcy, to decide not to oppose those orders, unless they are in that informed position. I do not find that they are pursuing discovery for any purpose collateral to the just resolution of the issues in the proceedings.

61    In a third affidavit, sworn on 13 August 2019, Ms Trenfield provides further detail on her efforts to trace the source of funds in BOQ1. With one difference, the outcome of the exercise is similar to the flow of funds I have summarised above. The difference is that Ms Trenfield says that she does not have independent documentation establishing that the funds were deposited into the HSBC accounts from the Bankwest Retirement Advantage account. For reasons I have given, there may in fact be such documentation, namely statements for the latter account which show withdrawals in amounts and on dates that correspond to the deposits into the HSBC accounts. Ms Trenfield acknowledges as much in a subsequent affidavit, sworn on 11 September 2019.

Conclusion on summary judgment

62    The evidence above establishes a prima facie case that the ultimate source of funds in BOQ1 and BOQ2 was the Bankwest Retirement Advantage account. But that is not the same as a prima facie case that the respondents have no reasonable prospect of defending the claim that the funds are held on trust on the terms of the FSF. The Friggers have not yet established the latter.

63    That is for two main reasons. First, the evidence as to whether the Bankwest Retirement Advantage account was held on the terms of the FSF consists of little more than assertions from Mrs Frigger. Documentary evidence supporting that, or even testimony descending to a persuasive level of detail, are absent. Mrs Frigger submitted that it will be practically impossible to trace the origin of every dollar in BOQ1. I accept that may be so. I will not make a ruling at this interlocutory stage as to the level of detail that does need to be achieved. But broad assertion untested by cross examination is not enough.

64    Second, there is an almost complete absence of any objective manifestation of an intention that BOQ1 is held on the terms of the FSF. I say 'almost complete' because I take into account the notification of a tax file number, the rental invoice, and the financial statement (I have said why I place no weight on internet banking printouts).

65    Other matters point objectively in the opposite direction. In particular, BOQ1 was opened in Mr Frigger's name only. The same goes for BOQ2, save that it is in Mrs Frigger's sole name. BOQ3 was also in Mrs Frigger's name alone. The two HSBC accounts which are part of the trail of funds were in Mr Frigger's name and Mrs Frigger's name respectively. The Bankwest Retirement Advantage account is in Mrs Frigger's name. While the Friggers' children may also have been trustees from 2016, they make no appearance in the bank records.

66    This does not establish a pattern of the trustees of the FSF moving funds from one account in their names (as trustees) to another in their names (as trustees), so as to potentially found an inference that, objectively, the intent of the transferors and transferees was that the funds would remain subject to the trust. It is also capable of being characterised as transfers from one individual in her own name to a different individual in his own name, and vice versa.

67    I am conscious of the possibility that, as husband and wife managing their own superannuation fund, Mr and Mrs Frigger saw no need to manifest the necessary intention in any formal way, and no need to ensure that the trust assets were always in the name of all the trustees. But the fact remains that they are now aiming to prove in court, by admissible evidence, that the funds were subject to the trusts of the FSF. At present, the documentary record falls short of that aim.

68    It may turn out at trial, with the benefit of pre-trial processes such as discovery, and after the Friggers' evidence has been tested in cross examination, that the court will feel enough confidence in the evidence to say that it establishes on the balance of probabilities that BOQ1 and BOQ2 are assets of the FSF. It is impossible to feel that level of confidence now. I do not consider that the applicants have established that the respondents have no reasonable prospect of defending the claim that the funds in BOQ1 and BOQ2 are held on trust on the terms of the FSF trust deed.

69    In any event I consider that the interests of justice require that the issue be resolved on full evidence, after pre-trial processes including discovery. There are complex issues of fact and, potentially, law which should not be determined at this stage in the proceedings by a mini-trial on the documents without discovery and without oral evidence.

70    Even though s 31A of the Federal Court Act has lowered the bar for summary judgment, the Friggers' case here does not clear that bar. I will not order summary judgment.

Assessment of evidence about the real properties

71    I deal with this separately to the evidence about BOQ1 and BOQ2 because the Friggers do not seek summary judgment concerning the declarations about the ownership of the Como and Bayswater properties. This evidence is relevant to the respondents' application for discovery.

72    Mrs Frigger's first affidavit annexes documents which appear to be declarations of trust by Mrs Frigger over each of the properties, which were made in 2014 or 2015. Mr and Mrs Frigger are said to be the beneficiaries of each trust so created. As I have said, they were also members of the FSF at that time. While only Mrs Frigger is named as the trustee, the declaration says that the powers of the trustee over the land are contained in the FSF trust deed.

73    Mrs Frigger's affidavit also annexes a property management statement for the Bayswater property, which makes no reference to the FSF. It annexes a lease for the Como property which does say that the owner is Mrs Frigger as trustee for the FSF. But while the lease speaks of a lease term commencing on 11 July 2018, it is undated and unsigned, so little weight can be placed on it.

74    There are three other properties that are the subject of the respondents' discovery application: one in Perth, one in Hobart and one in Armadale.

75    Mrs Frigger's affidavit says that on or about 6 May 2009 she and Mr Frigger made 'in specie contributions' of the Perth and Armadale properties, which they 'had purchased and registered in CAT's name'. There is no documentary evidence of these contributions.

76    There is a lease of the Armadale property dated 1 July 2009 which names CAT as the trustee of the FSF as the lessor and Mr and Mrs Frigger as lessees. The business which they operated as lessees was sold on 11 February 2016. Mrs Frigger's first affidavit says that the proceeds were contributed to the FSF. It is not clear on the evidence whether the land itself was sold at that or any other time.

77    There are invoices for rent and other charges that appear to have been issued to the tenants of the Perth property and of the Hobart property. These have been issued in the name of H & A Frigger Pty Ltd as trustee for the FSF. But they are dated from February and March of 2019, well after the bankruptcy.

78    In summary, there is probative documentary evidence which tends to indicate that the Como and Bayswater properties were held on the terms of the FSF at the time of the bankruptcy. There is also evidence suggesting that the Armadale property was held on the terms of the FSF in 2009, but it is not clear whether it is still owned by the former corporate trustee, CAT, or by the applicants, or has been sold. The other evidence about the beneficial ownership of the real property post-dates the bankruptcy, and so must be treated with caution. That is because the beneficial ownership of the properties may have been in issue between the applicants and the respondents by that time, so the documents, which appear to have been prepared by the applicants, are self-serving.

79    In oral submissions Mrs Frigger took objection to that term, as she understood it to mean that documents with that description were forged or otherwise fraudulent. But that is not what the term 'self-serving' means in this context. It is, rather, a term which is often used in the courts to identify the need to exercise caution in giving evidentiary weight to a document when it has been prepared by someone at a time when they are aware that the contents of the document may help or harm them in any legal proceeding. It will often be sensible to place less weight on a document that has been created in those circumstances than on a document which has not been potentially affected by such awareness.

Conclusions on discovery

80    In summary, the respondents seek discovery of documents falling into three categories. The first is documents evidencing the source of funds in BOQ1 and BOQ2. This includes documents evidencing the flow of funds from other specified accounts, which I have described above, and ultimately from the various investments activities which Mrs Frigger asserts are the source of the funds. It includes documents evidencing the legal and beneficial ownership of the accounts.

81    The evidence as I have summarised it indicates real doubts about the source of the funds in the Bankwest Retirement Advantage account. There is also a lack of any documentary evidence of any objective manifestation of intention that the funds in any of the bank accounts are held on trust on the terms of the FSF trust deed. These are matters which are within the knowledge of the applicants, and any documents which go to them are likely to be in the possession of the applicants rather than the respondents.

82    It may be argued that documentation permitting the tracing of funds between the various accounts does not need to be discovered, since the documents already in evidence permit the prima facie tracing exercise described above. But that is not the same thing as establishing the necessary transfers on the balance of probabilities at trial. And since documentation evidencing an intention that the transferred funds are held on trust on the terms of the FSF is lacking, discovery of documents on that subject will be necessary anyway, and is likely to cover many of the documents that go to the tracing exercise. On balance, I consider it would be artificial and potentially productive of confusion and wasted effort to excise documents going to the tracing exercise from the scope of discovery. I will, however, excise documents that have already been annexed to affidavits – there is no point in requiring the applicants to list those out.

83    The second category of documents of which the respondents seek discovery is documents evidencing the legal and beneficial ownership of the real properties that are said to be, or to have been, among the assets of the FSF. That includes transfer and leasing contracts, settlement statements, declarations of trust and other documents. As I have set out, in relation to the real properties there is some documentation that some of them are or were assets of the FSF, but nothing that could be described as complete or continuous.

84    The third category is documents evidencing the purchase, sale or other acquisition of the shares in the CommSec portfolio and the identity of the legal and beneficial ownership of those shares. I described the uncertainties around this evidence in Frigger v Trenfield (No 1) at [45]. In particular I noted the paucity of direct documentary evidence of the beneficial ownership of the individual shareholdings in the portfolio. Mrs Frigger's evidence was that such documents had been generated, but they were not in evidence.

85    I am satisfied that the categories of documents sought by the respondents are relevant to the central issues in the proceedings, namely whether the funds in BOQ1 and BOQ2, the real properties, and the shares in the CommSec portfolio, are held on trust on the terms of the FSF trust deed. I am also satisfied that discovery of the documents will facilitate the efficient conduct of the proceedings, as they will permit the respondents to respond, in a way informed by the documentary evidence, to the applicants' position on that issue. If documents in those categories are not discovered, on the state of the evidence as I have described it both the respondents and the court may not be satisfied that the funds are trust funds. Given that the onus of proving that matter is on the applicants, the result may be that the application is resolved against them in the absence of any clear proof one way or another as to the beneficial ownership of the funds. It is more likely to lead to a just outcome of the proceedings if the applicants produce all documents in their possession which go to the central issues.

86    There is reason to believe that documents in the various categories may be or may have been in the applicants' control, as contemplated in r 20.21 of the Federal Court Rules. On 13 June 2019, seemingly prompted by the respondents' application for discovery, Mrs Frigger swore an affidavit saying, in effect, that other than the documents attached to her two previous affidavits, Mr and Mrs Frigger and H & A Frigger Pty Ltd did not have in their control any other documents in the categories of which the respondents seek discovery. But there is evidence elsewhere which is inconsistent with that claim.

87    In her first affidavit Mrs Frigger said that she is a qualified accountant who managed all of the accounting records of the FSF including banking of income and capital. More specifically, on 28 August 2018 Mrs Frigger wrote to the Official Trustee attaching a spreadsheet which, she claimed, showed the accumulation of funds in a Bankwest account said to have been operated by the FSF. The spreadsheet refers to several Bankwest account statements, by statement number, none of which the applicants put into evidence. There is also evidence in an affidavit by Ms Trenfield that on 28 August 2018 Mrs Frigger sent Mr Maher copies of a Citibank statement and HSBC statements asserted to be relevant to the accumulation of funds in the FSF. This suggests that there are further potentially relevant documents in the Friggers' control.

88    At a case management hearing on 14 June 2019 Mrs Frigger said that there were 'literally thousands of documents in that superannuation fund'. She said that she is still the accountant for the FSF and 'still in total control of everything'. It is also noteworthy that Mrs Frigger has annexed relevant documents to affidavits that she has sworn after her affidavit of 13 June 2019, in which she said that the applicants did not have any other documents in the respondents' discovery categories.

89    All this suggests that the records available to her might be more extensive than those she has produced. Mrs Frigger's resistance at the hearing to producing the records seemed to be based more on her assessment as to what is and what is not relevant. For the reasons I have given, I consider that the documents the respondents seek are relevant, and that such documents may be or may have been in the applicants' control.

90    The applicants submit that the respondents have no right to demand documents of the FSF or to investigate its financial affairs, because they do not concern assets that vest in the respondents. But that begs the very question which is central to this proceeding. In any event, any such restriction cannot apply to a question of whether the respondents are entitled to discovery, which does not depend on powers to obtain documents that are specific to the respondents' position as trustees in bankruptcy.

91    The applicants have also submitted that discovery should not be ordered where it is possible to obtain evidence by other means. For example, they submit that '[i]nformation relating to the legal and beneficial owner of the Officeworks Hobart property is available to any member of the public for $25.00 from Land Titles Office Tasmania'. But this is not to the point. It is not necessary in order to obtain an order for discovery to establish that there is no other way of obtaining relevant evidence. And I am not persuaded that such evidence as may be publicly available is so conclusive as to militate against exercising the discretion to order discovery.

92    The applicants have also submitted that they do not have many of the documents sought by the respondents. The applicants may have had some of them, such as settlement statements for transactions that occurred many years ago, but they no longer exist. I accept that is a possibility, but the affidavit of discovery can deal with that as appropriate. The applicants did not lead any evidence to the effect that searching records going back to the establishment of the trust in 1997 would be unduly onerous. When I raised with the parties the possibility of limiting the time period covered by the order, Mrs Frigger accepted that it could go back as far as 20 years. Since that would nearly go back to 1997 anyway, I do not propose to insert any such time limit in the orders.

93    I am therefore prepared to make discovery orders in the terms sought by the respondents (save for a reference to documents concerning stamp duty, shire rates, water rates and land tax, which counsel for the respondents accepted was not necessary). The respondents sought discovery within 21 days, however the court understands that the applicants may be overseas until the end of the year. I will therefore order that discovery be provided by 24 January 2020 and I will give the parties liberty to apply in relation to that time frame.

Associate:

Dated:    29 November 2019