Federal Court of Australia

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

ORDERS

THE COURT ORDERS THAT:

1.    The applicants have leave to amend their interlocutory application dated 1 October 2020 in terms of the amended interlocutory application dated 15 November 2020.

2.    Service of the amended interlocutory application is dispensed with.

3.    The applicants' amended interlocutory application, which for the avoidance of doubt includes the application to reopen for purposes advanced at the hearing on 27 November 2020, is dismissed.

4.    The costs of the amended interlocutory application will be the first respondent's in any event.

5.    The first respondent has liberty to apply within seven days of the date of this order, by way of written submissions of no more than three pages in length, in relation to the costs of the amended interlocutory application.

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

REASONS FOR JUDGMENT

JACKSON J:

1    These reasons concern an application in this proceeding which the applicants, Mrs and Mr Frigger, filed on 1 October 2020. It was filed after the trial of the proceeding had ended and judgment was reserved. The main order sought was an order to 're-open the trial hearing'. I will refer to the application as the Reopening Application to distinguish it from the originating application in the proceeding and other applications brought in it.

2    The purpose of the Reopening Application appears from a list of orders included in it which the applicants would have sought if leave to reopen had been granted. The orders stem from a submission by the applicants that the court should exclude a large part of the affidavit evidence of the first respondent, Mrs Kelly-Anne Trenfield. Mrs Trenfield is the applicants' trustee in bankruptcy. The affidavit evidence was admitted in the trial but the applicants said it should have subsequently been excluded under s 138 of the Evidence Act 1995 (Cth) because it was obtained improperly or unlawfully, including by abuse of Mrs Trenfield's powers.

3    If given leave to reopen, the applicants would have sought orders that material said to have been obtained in that improper or unlawful way should be destroyed. They would also have sought an order that Mrs Trenfield write to various share registries retracting letters she sent to them on 24 April 2020 and 29 September 2020. This seems to have been sought on the basis that the letters included falsehoods. The applicants also wished to seek an order that Henry Newton attend court to be cross-examined. Mr Newton is an employee of Mrs Trenfield's firm, FTI Consulting, who on 11 November 2020 swore an affidavit which Mrs Trenfield relied on for the purposes of the Reopening Application. Also, the applicants sought an order that parts of Mr Newton's affidavit be struck out.

4    So, the main thrust of the Reopening Application was that the applicants wanted the opportunity to object to parts of affidavits, and exhibits to those affidavits, which had already been received into evidence. They said further that if the Reopening Application were successful, so that they could raise the objections in the course of the reopened trial, they would also seek to adduce further evidence on which they would seek to rely to support those objections. That evidence would have been likely to include the evidence on which they relied for the purposes of this Reopening Application.

5    In addition to seeking to reopen for the purpose of objecting to evidence already admitted, the applicants also applied to reopen orally at the hearing for the purpose of adducing into evidence an affidavit which Mr Frigger swore on 27 October 2020 and an affidavit which Mrs Frigger swore on 17 September 2020.

6    At a hearing on 27 November 2020 I dismissed the Reopening Application. These are my reasons for having done so.

The reasons why the applicants sought leave to reopen

7    The Reopening Application was not the applicants' first application for leave to reopen. One of the earlier applications was made on 31 August 2019, in order to adduce evidence about the audit for the 2019 financial year of the Frigger Super Fund (FSF). The FSF is the self-managed superannuation fund at the heart of the dispute in this proceeding. The trial had not finished at the time of the earlier application, and it appeared that the evidence had not existed at the time that the applicants closed their case (on 31 July 2020). Ultimately, Mrs Trenfield did not oppose the earlier application to reopen, and it was granted. But it was granted on the basis, broadly speaking, that Mrs Trenfield could seek to obtain further evidence about the audit of the FSF for 2019, and could cross-examine Mrs Frigger on the new evidence.

8    Mrs Trenfield did obtain further information, from the auditors of the FSF, Just SMSF Audits Pty Ltd. On 15 September 2020, her case not being closed by that time, she tendered two documents she said she had obtained from that source. They were a portfolio statement issued by Commonwealth Securities Pty Ltd (CommSec) for a particular share trading account, and a bank statement for an account with Bankwest. The applicants disputed the provenance of the latter, which potentially affected its relevance, so Mrs Trenfield was given leave to file an affidavit explaining how she had obtained it. Subject to that, the documents were admitted into evidence as Exhibits 44 and 45.

9    Mrs Trenfield filed that affidavit, sworn by her, on 16 September 2020. She annexed to it a letter which she had sent to Just SMSF Audits on 3 September 2020. The letter referred to her appointment as trustee in bankruptcy of the applicants and said:

Pursuant to Section 129(1) and Section 77A of the Bankruptcy Act 1966, I kindly request you forward to me within fourteen (14) days all files in your possession, power or control relating to the affairs of the Bankrupts. This includes all books and records, working papers, trust account statements and other documentation relating to the Bankrupts' affairs and the affairs [sic] Frigger Super Fund.

Please note, pursuant [sic] Section 129(3) of the Bankruptcy Act 1966 provides that a person is not entitled, as against the trustee, to claim a lien on any papers or documents of the bankrupt.

10    On 18 September 2020 Mrs Frigger swore and filed an affidavit by which she asked the court to disregard Mrs Trenfield's affidavit of 16 September 2020 because 'it contains information and evidence Trenfield obtained by abusing her power'. The alleged abuse was that:

Trenfield demanded from JustSMSF Audits all documents relating to the affairs of the applicants and FSF by pretending to JustSMSF Audits she was entitled to them for the purposes of s 77A and s 129(1) Bankruptcy Act, some investigation she was carrying out in the administration of the applicants' estates.

It is clear, however, that she demanded those documents, not for the purposes of s 77A and s 129(1) Bankruptcy Act, but for her defence in this proceeding.

11    Section 129(1) of the Bankruptcy Act 1966 (Cth) requires the trustee in bankruptcy to take possession of 'all the property of the bankrupt capable of manual delivery, including all deeds, books and documents of the bankrupt'. Section 129(3) provides that a 'person is not entitled, as against the trustee, to withhold possession of the books of account or any papers or documents of the bankrupt relating to the accounts or to any of the examinable affairs of the bankrupt or to claim any lien on any such papers or documents'. But it is not clear which documents held by Just SMSF Audits were chattels that were property of the applicants, as distinct from mere documents pertaining to the applicants' affairs (some of which may have existed only digitally).

12    Section 77A is more pertinent. Relevantly, the effect of the section is that where a trustee is conducting an investigation relating to a bankrupt under s 19AA, a person who receives a request from the trustee for 'books of an associated entity of the bankrupt' must (certain other criteria being satisfied) produce the books to the trustee or another specified person. A trust of which the bankrupt is connected in various ways is an associated entity of the bankrupt: s 5E. That includes a trust of which the bankrupt is trustee: s 5E(c). On any view, this would capture the FSF.

13    Section s 19AA(1) provides:

The trustee of the estate of a bankrupt may investigate:

(a)    the bankrupt's conduct and examinable affairs; and

(b)    books, accounts and records kept by the bankrupt;

so far as they relate to the bankruptcy.

14    The applicants allege that the letter of 3 September 2020 was false because Mrs Trenfield did not require the documents from Just SMSF Audits for the purpose of any investigation she was conducting in the bankruptcy. She required them for the purposes of this proceeding.

15    In light of the nature of this allegation, and without having formed any view on its merit, I considered it appropriate to inform the applicants, as unrepresented litigants, of the provisions of s 138 of the Evidence Act. Relevantly, s 138 provides:

(1)    Evidence that was obtained:

(a)    improperly or in contravention of an Australian law; or

(b)    in consequence of an impropriety or of a contravention of an Australian law;

is not to be admitted unless the desirability of admitting the evidence outweighs the undesirability of admitting evidence that has been obtained in the way in which the evidence was obtained.

…

(3)    Without limiting the matters that the court may take into account under subs (1), it is to take into account:

(a)    the probative value of the evidence, and

(b)    the importance of the evidence in the proceeding, and

(c)    the nature of the relevant offence, cause of action or defence and the nature of the subject-matter of the proceeding, and

(d)    the gravity of the impropriety or contravention, and

(e)    whether the impropriety or contravention was deliberate or reckless, and

(f)    whether the impropriety or contravention was contrary to or inconsistent with a right of a person recognised by the International Covenant on Civil and Political Rights, and

(g)    whether any other proceeding (whether or not in a court) has been or is likely to be taken in relation to the impropriety or contravention, and

(h)    the difficulty (if any) of obtaining the evidence without impropriety or contravention of an Australian law.

16    Directions were made for the filing of written submissions on the point so that the objections to Exhibits 44 and 45 could be resolved in the course of preparing reasons for judgment. While the documents had already been admitted, Mrs Trenfield had no objection to the court re-determining their admissibility in light of her affidavit of 16 September 2020.

17    The applicants filed their submissions objecting to Exhibits 44 and 45 on 30 September 2020. The next day, they filed the Reopening Application. In an affidavit in support of the Reopening Application, Mrs Frigger said that after receiving Mrs Trenfield's affidavit of 16 September 2020, Mrs Frigger became aware that she had 'misapprehended the fact that Trenfield had misused the powers under the Bankruptcy Act' by sending certain letters. The letters were: a letter to Just SMSF Audits of 28 August 2019; a letter to CommSec of the same date; letters to various Australian banks on 30 August 2019; and letters to various share registries on 24 April 2020. The affidavit asserted that all the letters falsely state that Trenfield was conducting an investigation in the bankruptcy, and the recipients were required by law to comply with her requests.

18    Setting aside the allegation of falsity, this is not an accurate description of the letters. The earlier letter to Just SMSF Audits did rely on s 129(1) and s 77A in the same terms as the letter of 3 September 2020. The letters of 30 August 2019 to the banks also rely on s 77A, albeit in different terms. But the letters to CommSec and the share registries do not rely on s 77A (or s 129). Instead, they assert that pursuant to s 58 and s 116 of the Bankruptcy Act, relevant shareholdings vested in Mrs Trenfield as trustee in bankruptcy (or 'in the Bankrupt Estate') and are considered assets or property divisible among the bankrupt estate's creditors. And none of the letters said in terms that the recipients were required by law to comply with Mrs Trenfield's requests.

19    In submissions it emerged that the applicants' complaint about the letters asserting that shares had vested in Mrs Trenfield was that the assertion was false. But the dispute about whether the shares are assets divisible among creditors of the bankrupt estate is a key aspect of this proceeding. The applicants are no more entitled to be categorical on the subject than Mrs Trenfield is. The true issue raised by the letters to CommSec and the registries is whether, by omitting to disclose the existence of the dispute, the letters were misleading. Mrs Frigger's affidavit of 1 October 2020 gives accounts of conversations she had with employees of share registries to the effect that had they known of the dispute, they would not have given any information to FTI Consulting. The applicants wished to reopen the trial in order to seek the exclusion from evidence of all materials obtained from the recipients of the letters (unless the materials were the subject of discovery orders made in the proceeding).

Principles regarding reopening of cases

20    The court has an inherent power to reopen a trial after judgment has been reserved and before it has been delivered: see Murray v Figge (1974) 4 ALR 612 at 613. The power is usually exercised in order to permit the admission of further evidence, but I see no reason in principle why the inherent power would not also permit reopening for the purpose of a party objecting to and excluding evidence that has already been admitted.

21    The existence of the power to reopen for that purpose says nothing, however, about whether it should be exercised for that purpose in a particular case. To do so would be extraordinary. An application for leave to object to and exclude evidence that has already been admitted gives rise to obvious objections concerning the efficiency of the trial process, finality in the administration of justice and unfairness to the other party, which I consider below.

22    Nevertheless, as extraordinary as the application is, it must be addressed in accordance with the well-established principles as to applications to reopen. The power is discretionary: Urban Transport Authority of New South Wales v Nweiser (1992) 28 NSWLR 471 at 474; Commonwealth of Australia v Davis Samuel Pty Ltd (No 7) [2013] ACTSC 146; (2013) 282 FLR 1 at [1578]. The ultimate question is where the interests of justice lie: Inspector-General in Bankruptcy v Bradshaw [2006] FCA 22 at [24] (Kenny J); Telstra Corporation Ltd v Australian Competition and Consumer Commission [2008] FCA 1436; (2008) 171 FCR 174 at [208] (Lindgren J); Spotlight Pty Ltd v NCON Australia Ltd [2012] VSCA 232; (2012) 46 VR 1 at [26].

23    Broadly speaking, there are four recognised classes of cases where leave to reopen may be given, although the classes are not closed: (1) fresh evidence; (2) inadvertent error; (3) mistaken apprehension of the facts; and (4) mistaken apprehension of the law: Bradshaw at [24] (Kenny J); Spotlight at [25]-[26].

24    Likely prejudice to the party resisting the application will be relevant: Nweiser at 478. So will the public interest in the timely conclusion of litigation: Australian Securities and Investments Commission v Rich [2006] NSWSC 826; (2006) 235 ALR 587 at [18]. The probability that the additional evidence will affect the result is also relevant: Telstra at [209]. If success in reopening is not likely to make any difference to the outcome of the trial, that would weigh against putting the parties and the court to the delay, trouble and expenditure of resources involved in reopening.

25    Adapting that last consideration to the present situation, I consider that it is relevant to assess the probability that the objections to evidence which the applicants seek to advance will affect the result. That requires an examination, at the threshold, of the probability that the objections will succeed. But it would not be appropriate to conduct a full examination of the merits of the objections, because to do that would be to proceed as if leave to reopen had already been given. The court is instead conducting an assessment of the probability of success as one of several discretionary factors concerning the power to reopen.

Why leave to reopen was not granted

26    The applicants have closed their case. So have the respondents. Both Mrs Frigger and Mrs Trenfield were cross-examined on the basis of the evidence that had been admitted up to that point. Closing submissions have been heard and judgment has been reserved. The importance of efficient disposition of and finality in litigation mean that an applicant seeking to reopen the trial at this stage of the proceeding, after judgment has been reserved, in order to object on new grounds to evidence that has already been admitted, will need a very good reason for doing so.

27    I was not persuaded that the applicants had demonstrated any good reason here. In an attempt to advance one of the four recognised reasons for reopening I have listed above, Mrs Frigger said that she misapprehended the fact that Mrs Trenfield had misused her powers under the Bankruptcy Act. But the applicants have not established that they misapprehended anything. The letters they refer to were all in evidence well before the trial started. The letter of 3 September 2020, obtained during the course of the trial, does not provide any new context for the earlier letters or otherwise change the way in which they should be understood.

28    Let it be assumed for the moment that the dichotomy the applicants assert, between investigating in the course of the bankruptcy and obtaining information for the purposes of litigation, is sound. Even so, the purpose of the first letter to Just SMSF Audits and the letters to the banks was always evident from the terms and timing of the letters. The letter of 3 September 2020 shed no new light on any of that.

29    As for the letters to CommSec and share registries asserting that shares were property divisible among creditors, the applicants have long disputed that, and if it is misleading now to omit to mention the dispute, then it was equally misleading when the letters were first sent and first disclosed in Mrs Trenfield's affidavits. In their written opening submissions filed before trial, the applicants alleged that the letter of 28 August 2019 to CommSec was an 'abuse of power' and advanced it as one ground for the order they seek for the removal of Mrs Trenfield as trustee. The applicants have always been alive to their ability to allege impropriety against Mrs Trenfield on that basis. Nothing in the letter of 3 September 2020 points to any misapprehension about the earlier letters.

30    At its highest, the applicants' argument on this point can only be that they did not know that s 138 of the Evidence Act gave them a basis to object to the evidence that was obtained as a result of the earlier letters. But even if they, as self-represented litigants, did not know of the terms of s 138, they did know enough to claim that the evidence should be excluded because it was obtained by Mrs Trenfield abusing her power. After all, that is what Mrs Frigger did claim in relation to the letter of 3 September 2020, in an affidavit filed on 18 September 2020, only two days after she first saw that letter and before the court drew the applicants' attention to s 138. Simply being unaware of a particular statutory provision or legal principle is not the same thing as the 'mistaken apprehension' of the law to which Bradshaw refers as a recognised ground of reopening. If it were, then applications to reopen would be legion, from self-represented and legally represented litigants alike.

31    It would be inimical to the efficient conduct of litigation to permit litigants, self-represented or not, to reopen a trial after judgment is reserved simply because they have since identified an objection that did not occur to them before or in the course of the trial, or because they were unaware of the precise legal basis available to support the objection. Yet that is what the applicants sought by way of the Reopening Application. The applicants said (from the bar table) that they were overwhelmed by the volume of material they had to digest and by interlocutory applications which Mrs Trenfield brought shortly before the commencement of the trial. But preparing for trial is always demanding and time is usually short. It does not provide a good reason to depart from the usual approach that the parties must present their entire cases before judgment is reserved.

32    The applicants' inability to fit the reason for reopening into one of the four established classes is not necessarily fatal to the application; as I have said the classes are not closed and the ultimate question is where the interests of justice lie. But in the circumstances as I have described them, the considerations in favour of reopening would have to be compelling to overcome the lack of a satisfactory explanation for why the objection was not raised during the trial. Conceivably, if an applicant in an application for reopening presented to the court clear evidence of serious illegality or impropriety by another party, it could be in the interests of justice to permit a trial to be reopened so as to deny that other party the benefit of that illegality or impropriety.

33    Section 138(1), the relevant terms of which are set out at [15] above, imposes on a court a two stage task. Firstly, a party seeking to exclude the evidence bears the burden of satisfying the judge that the impugned evidence was obtained improperly or in contravention of an Australian law. Secondly, the party seeking admission of the impugned evidence must satisfy the court that the desirability of admitting the evidence outweighs the undesirability of admitting the evidence, having regard to the matters referred to in s 138(3): Wu (a pseudonym) v The Queen; Phan (a pseudonym) v The Queen [2020] VSCA 94 at [71]; R v McKeough [2003] NSWCCA 285 at [36] (Dunford J, Spigelman CJ and Hidden J agreeing on this point). This weighing or balancing exercise is discretionary: Em v The Queen [2007] HCA 46; (2007) 232 CLR 67 at [95] (Gummow and Hayne JJ).

34    I do not consider that the letters on which the applicants relied point so clearly to illegality or impropriety that, in the circumstances I have described here, they compel the reopening of the case to prevent injustice, including by considering the application of s 138. In so far as Mrs Trenfield's reliance on s 77A goes, the dichotomy alleged by the applicants between investigating in the course of the bankruptcy and obtaining evidence for use in litigation is not, in fact, sound. It is well established that a trustee in bankruptcy can use her investigative powers to obtain evidence for use in litigation, including litigation that has already been commenced. In Re Hugh J Roberts Pty Ltd (in liq) [1970] 2 NSWR 582 at 585, Street J said:

A liquidator needs information concerning his company just as much in connexion with current or contemplated litigation as in connexion with other aspects of its affairs. In using the statutory machinery of private examination he will in many cases be gathering evidence as an ordinary and legitimate use of this procedure … In my judgment it is immaterial in basic substance whether the private examination is sought to be used by a liquidator to gather information in connexion with proceedings he believes he might be able to bring, proceedings he contemplates bringing, proceedings he has decided to bring, and proceedings he has already brought. There is no presently relevant distinction in substance between gathering information referable to commencing proceedings and gathering information referable to continuing proceedings.

35    This passage has been approved on numerous occasions, including in Hongkong Bank of Australia Ltd v Australian Securities Commission (1992) 40 FCR 402 at 518 (Lockhart, Gummow and O'Connor JJ), in Hamilton v Oades (1989) 166 CLR 486 at 497-498 (Mason CJ), in Re Excel Finance Corporation Ltd (Receiver and Manager Appointed) (1994) 52 FCR 69 at 90 (Gummow, Hill and Cooper JJ) and in Re Southern Equities Corporation Ltd (in liq); Bond & Caboche v England (1997) 25 ACSR 394 at 432 (Cox, Lander and Bleby JJ). While all these cases concern the use of compulsory examination powers by company liquidators and receivers, there is no relevant distinction between that situation and the use by a trustee in bankruptcy of her investigative powers under s 77A of the Bankruptcy Act: see Fiore v Roufeil [2019] FCA 1774 at [26] and Roufeil v Fiore, in the matter of the Bankrupt Estate of Peter Andrew Fiore (No 4) [2020] FCA 1458 at [16].

36    The applicants sought to distinguish Fiore v Roufeil on the basis that there, the litigation had been commenced by the trustee, whereas here it was commenced by the bankrupt. But in Australia, at least, that distinction is of no moment in determining whether the trustee is abusing her powers: see Excel Finance at 90. They also sought to distinguish the compulsory examination powers of liquidators and receivers from the power under s 77A because the former takes place in a court and is subject to curial supervision. But I do not consider that difference is relevant here. The relevant questions are: for what purpose has the Bankruptcy Act conferred the power on the trustee; and did she use it for a reason outside that purpose? The purpose of both the compulsory examination powers and the investigative power under s 77A is the same: to obtain information which can be used in the administration of the bankrupt estate, including in litigation necessary in that administration.

37    What the trustee must not do is use her powers to obtain an improper forensic advantage in litigation to which she is a party. In Excel Finance at 91 the court gave examples, by reference to Hugh J Roberts, of what that means:

… Street J counselled liquidators not to be diffident in using a private examination for the ordinary and legitimate purpose of gathering in information. His Honour warned, of course, that the process should not be abused, giving, as an illustration, an attempt, where litigation was either contemplated or commenced, to summon the prospective or existing defendant's probable witnesses and examine them simply for the purpose of destroying their credit. So to do would involve using the examination process to obtain a forensic advantage in litigation, whether or not that litigation was yet commenced. Another, albeit related, case of abuse would be the conduct of an examination to enable a 'dress rehearsal of the cross-examination' to be instituted of a trial impending or contemplated. Other examples may be the use of an examination summons to obtain de facto discovery where a discovery order had been refused in proceedings already on foot. It is neither possible nor desirable to catalogue all the circumstances where use of an examination summons might constitute an abuse of process.

38    While this is not an exhaustive list, it shows that to use the trustee's compulsory powers to obtain documents relevant to litigation is not necessarily to gain an improper forensic advantage. The parties spent much time debating whether Mrs Trenfield had obtained documents that she could have obtained through discovery, or that were outside the scope of discovery orders that were made. But neither of those matters, without more, are grounds for saying that she gained an improper forensic advantage. If the documents were ordered to be discovered, and the applicants did not discover them, they can hardly complain that the trustee felt it necessary to obtain them in another way. To the extent that the documents were not ordered to be discovered, in this case it cannot be said that this was the result of Mrs Trenfield having applied to obtain discovery of them, and that having being dismissed. Either way, she has not gained any improper forensic advantage.

39    So, once it is appreciated that there is no relevant distinction, per se, between investigating under s 19AA of the Bankruptcy Act and obtaining information for use in litigation which has been commenced, it becomes apparent that the sending of the letter requesting material under s 77A is capable of constituting the necessary investigation. Mrs Trenfield gave no direct evidence that she was conducting an investigation but it may be that she did not need to. Asking questions in a letter in order to obtain information is an investigation. Section 19AA is broadly expressed. It appears in Part II Division 1 of the Act, which contains a miscellany of provisions about the general administration of the Act. The power to investigate which s 19AA confers relates to the broad subject matter of the bankrupt's conduct and examinable affairs and books, accounts and records kept by the bankrupt, and is confined only by the requirement that those matters relate to the bankruptcy. No formal requirement which must be fulfilled in order to constitute an investigation is prescribed. Further, the letter to Just SMSF Audits of 28 August 2019, and the letters to the banks of 30 August 2019, ask for a wide range of information which is of the kind that one would expect a trustee in bankruptcy conducting an investigation for the purposes of her administration of the bankrupt estate to seek. In light of the apparent breadth of s 19AA, I do not consider that the applicants have demonstrated a clear basis for thinking that the letters relying on s 77A, and therefore relying on the existence of an investigation under s 19AA, were misleading.

40    The applicants also alleged that Mrs Trenfield acted 'in furtherance of the respondent's plan to use Mrs Frigger's cross-examination in this proceeding as a dress rehearsal for a future public examination'. That is the reverse of the issue to which Excel Finance refers, which is using the examination power to conduct a dress rehearsal of curial litigation. But in any event, the applicants advanced no plausible basis for thinking that this was Mrs Trenfield's purpose in cross-examining Mrs Frigger at trial. All they pointed to was an email from a solicitor acting for the liquidator of the former trustee of the FSF, Computer Accounting and Tax Pty Ltd, which raised the possibility of an examination being conducted in the future in relation to matters which do not appear to be connected to the present proceeding. But as far as the present proceeding goes, the applicants brought it to establish that certain assets are not part of the bankrupt estate, Mrs Trenfield disputes that claim, and there is no reason to think that the cross-examination of Mrs Frigger was for any purpose outside that dispute.

41    I therefore do not consider that either the strength of the applicants' arguments that Mrs Trenfield abused her powers under s 77A or engaged in misleading conduct in relation to those powers, or the seriousness of such conduct if it were established, would be sufficient to warrant taking the extraordinary step of permitting the trial to be reopened to agitate new objections to evidence after judgment has been reserved. For the same reasons, I do not consider that the grounds for excluding the evidence under s 138 are sufficiently strong to mean that it is in the interests of justice to reopen.

42    As for the letters asserting that the shares were property divisible among creditors, whether that is so, and whether Mrs Trenfield abused her powers in sending the letter to CommSec are substantive issues in the proceeding which must be determined as a result of the trial. It would not be appropriate for me to express any firm views on those issues in the course of determining the Reopening Application. Given the similarity of the letters to the share registries, it would not be appropriate to make a firm finding about any of the letters in that regard. It is enough to say that, whether the assertion proves to be correct or not, I do not consider that the sending of the letter to CommSec points so clearly to an intention to mislead, or to any other improper purpose, as to justify taking the extraordinary step of granting leave to reopen to agitate the objections when there is no good explanation as to why they were not agitated during the trial. While Mrs Frigger's affidavit of 1 October 2020 contains hearsay evidence suggesting that the share registries were misled, Mr Newton's affidavit contains hearsay evidence suggesting the contrary, and it is not possible or appropriate to resolve that conflict in evidence in the course of the Reopening Application. Once again, for the same reasons I do not consider that the objections the applicants wish to raise under s 138 are so strong as to justify reopening the trial.

43    The applicants seemed to place a great deal of reliance on s 58(2) of the Bankruptcy Act, which provides:

Where a law of the Commonwealth or of a State or Territory of the Commonwealth requires the transmission of property to be registered and enables the trustee of the estate of a bankrupt to be registered as the owner of any such property that is part of the property of the bankrupt, that property, notwithstanding that it vests in equity in the trustee by virtue of this section, does not so vest at law until the requirements of that law have been complied with.

This, the applicants say, means that Mrs Trenfield did not have power to deal with the shares because they were not registered in her name, so that her letters of 24 April 2020 (and a subsequent letter of 29 September 2020) were 'a gross abuse of power'. But s 58(2) confirms that even where the transmission of shares is not registered, the shares still vest in equity. The letters of 24 April 2020 and 29 September 2020 did not say that the shares vested in law, nor have the applicants demonstrated that the requests put to the share registries would have been dealt with any differently if the letters had spelled out the effect of s 58(2).

44    The applicants submitted that the only right that Mrs Trenfield had over the disputed shares was to apply to a court to have the shares transferred to her. I do not accept that is so. Section 58 of the Bankruptcy Act vests property of the bankrupt (whether at law or in equity) automatically, without any need for curial intervention. There is no reason to suppose that a trustee seeking to preserve and get in assets which he or she believes are divisible among creditors cannot simply rely on s 58 in communications with third parties, but must always invoke the aid of the court. It will be a matter for the third parties whether they comply with the trustee's requests, and if they do not it will be a matter for the trustee whether he or she goes to court.

45    The applicants also sought leave to reopen to object to the evidence sought to be excluded on the basis that it was adduced solely to impugn Mrs Frigger's credibility. It is said to be inadmissible under s 102 of the Evidence Act. There is no reason given for why this was not raised during the trial. In any event, and without embarking on a full determination of the merits of the objection on this basis, it appears to me that it would be unlikely to succeed. The material in question mostly, if not entirely, went to the substantive issues in the proceeding, one of which, broadly speaking, was whether the applicants had objectively manifested an intention to hold various assets on trust for the FSF. If they did manifest such an intention, it would not matter that the material also damages Mrs Frigger's credibility, if that is what it does. It would be neither material relevant only because it affected the assessment of her credibility, nor material relevant for that purpose and for another purpose which does not make it admissible. Hence the definition of credibility evidence in s 101A of the Evidence Act is unlikely to apply to it, and the exclusionary rule in s 102 will also not apply.

46    For example, one of the documents the applicants seek to exclude is a 'financial year summary', that is a portfolio holding statement, issued by CommSec as at 30 June 2018, which was annexed to Mrs Trenfield's affidavit of 11 September 2019. Mrs Trenfield says she obtained it from Just SMSF Audits. In Mrs Frigger's affidavit sworn in support of the originating application, she annexed a version of the same document on which the notation 'FRIGGER SUPER FUND' appeared. That could have been relied on to support a submission by the applicants that the necessary intention to hold the shares in that fund has been manifested. That the version annexed to Mrs Trenfield's affidavit lacked that notation speaks against that submission. So it is relevant to determine an issue in the proceeding. Accepting it as negativing the applicants' submission may also damage Mrs Frigger's credibility. But that is not its sole relevance. If an objection under s 102 were permitted to be made, I doubt it would be upheld.

47    Another reason against reopening the trial to permit further objections stems from the fact that if they are upheld, a large volume of documentary evidence will be excluded. There may also be a significant quantity of oral evidence gained through cross-examination on such documents that will need to be excluded. The significant implications of excluding it show why objections of that kind need to be made and determined during the trial rather than after it. In oral submissions, Mrs Frigger acknowledged that if the trial was reopened, and the evidence was excluded, then Mrs Trenfield would seek to subpoena the material that had been excluded. Mrs Frigger said that the applicants would be happy for that to occur. But the court would not be happy with it. It would result in an effective retrial of a substantial part of the issues in the proceeding, including a repetition of cross-examination, with significant additional cost and delay. In addition, if leave is given to the applicants to adduce additional evidence as they propose, it will be necessary to permit cross-examination on that evidence. Even if further evidence is not adduced, the process of working out what cross-examination was conducted on the basis of material subsequently excluded, and therefore what oral evidence can and should be excluded, would be fraught with difficulty and productive of disputation. That these are possible outcomes of giving leave to reopen is a strong reason not to do so.

48    There would also be prejudice to Mrs Trenfield which would be difficult to remedy. Resolving objections to the evidence notified before trial took the better part of the first two days of trial. That included much of the evidence now sought to be excluded. Mrs Trenfield conducted the case, including cross-examination and closing submissions, on the basis that the evidence was in. Given how extensive the evidence sought to be excluded is, it would be difficult to know precisely how and to what extent the case would have been conducted differently if it had been excluded from the outset. There is a very real prospect that if the evidence was excluded, justice would require the trial effectively to be started again.

49    While the Reopening Application is mostly an application to exclude evidence rather than add to it, the following observations of Harper and Tate JJA and Beach AJA in Spotlight at [17]-[18] (footnote removed) are apposite:

There are good reasons why the circumstances must be exceptional before a court may allow a case, having been closed and judgment reserved, to be re-opened. The need for finality in litigation is one. It is no answer to this point to say that the further evidence sought to be adduced by the respondent in this case is confined to the quantum of damages. Were applications to re-open to be allowed almost as of course, such applications would be regularly made. That would add enormously to inefficiencies in the administration of justice, even if the re-opened hearing was strictly confined. The discipline which ought to attend the conduct of litigation by highly competent litigators would also inevitably decline.

The very strict rule that, subject to any applicable process of appeal or review, the presentation of their cases by parties to litigation must conclude with the end of the trial, has another important justification. It is that, very often, the boundaries of the re-opened issues would be hard to define and as difficult to protect. The re-opened hearing would then be bedevilled by arguments about whether one party or the other was seeking to take advantage of the re-opening to polish parts of its case which were more or less within the scope of the re-opened proceeding but not clearly on one side or the other of the prescribed limits.

Why leave to reopen to adduce new evidence was not granted

50    Apart from objecting to the evidence already put in, the applicants also sought to reopen for the purpose of putting Mr Frigger's new affidavit of 27 October 2020 into evidence. The affidavit attaches an email dated 28 September 2020 from one of the share registries, Link Market Services. The applicants argued that the email was important new evidence but I am not persuaded that it is. It answered questions (which are not disclosed in the affidavit) about the recording of tax file numbers (TFNs) against share holdings. That is a potentially significant issue in the proceeding, as the applicants rely on what they say is the notification of the TFN for the FSF to share registries as evidence that the shares were held by them in their capacity as trustees for the FSF. The timing of the notification of the TFN, if it is indeed the TFN for the FSF, is potentially relevant because Mrs Trenfield claims that it was notified, or at least changed, after the dispute between her and the applicants arose, so the weight to be put on it should be limited. But Link's email of 28 September 2020 does not say anything of significance about these issues. At most it says that the dates on which an unspecified TFN was entered on Link's system varies across the different holdings. This general statement is unlikely to assist the court to determine what TFN was entered, and when, in relation to any specific holding, let alone whether and when the notified TFN was changed.

51    Apart from that, Mr Frigger's affidavit contains evidence about notification of TFNs, and other tax-related questions, which responds to evidence and submissions that Mrs Trenfield put at trial. It concerns matters that were clearly in issue at the trial. It is evidence which the applicants could have adduced then. There is no good reason to let them adduce it after the trial has finished.

52    The applicants also applied orally at the hearing on 27 November 2020 to reopen their case to put into evidence an affidavit which Mrs Frigger swore on 17 September 2020 annexing a printout of transactions involving the FSF obtained from the Australian Taxation Office (ATO). They applied once before to admit that affidavit and the application was dismissed. They submitted, however, that the document was sought to be admitted for a different purpose then, and now they seek to admit it for the purpose of showing that dividends declared to the ATO correspond to the shares that are said to be held for the FSF. But different purpose or not, this is evidence which could have been adduced as part of the trial. No good explanation was given as to why it was not. For that reason I dismissed the renewed application to reopen to adduce this evidence.

Conclusion on application to reopen

53    In my view reopening the trial on the basis sought by the applicants would both throw the present proceeding into disarray, and encourage other litigants to press objections after their opponents' cases have closed, for no better reason than that the objections did not occur to them beforehand, or it did not occur to them to lead certain evidence before judgment was reserved. It would be contrary to the public interest in the timely conclusion of litigation. It is not in the interests of justice to reopen the trial, whether conceived in terms of the justice of this case, or in terms of the administration of justice generally.

54    The applicants also applied in the Reopening Application for certain parts of Mr Newton's affidavit of 11 November 2020 to be struck out. The basis of the application was that the material was already in evidence and that the duplication was contrary to the overarching purpose of efficiency enshrined in s 37M of the Federal Court of Australia Act 1976 (Cth). Whether that is good reason to exclude it or not, it was clear in Mrs Frigger's oral submissions that it was only sought for the reason that the affidavit may be adduced into evidence in any reopened trial. Since that reason falls away, this component of the Reopening Application does too.

55    For those reasons, the application to reopen was dismissed.

Costs

56    Mrs Trenfield sought an order that the costs of the application to reopen are hers in any event. The applicants submitted that the order should be costs in the cause, as the application had been dealt with as a possible continuation of the trial. But while that was the procedure adopted, in substance the application to reopen was made and argued separately to the course of the main trial and after the trial ended. The costs that it has occasioned for Mrs Trenfield will be identifiable discretely from the costs of the main trial. There was no reason to depart from the usual rule that the costs should follow the outcome of the application to reopen.

Associate:

Dated:    3 December 2020