Federal Court of Australia

Frigger v Trenfield (Application to Discontinue) [2025] FCA 640

ORDERS

THE COURT NOTES THAT:

A.    The applicants seek leave to discontinue these proceedings.

B.    The respondent contends that leave should only be granted on conditions being (a) the applicants not commence any further proceedings based on the allegations made in these proceedings or asserting the same causes of action; and (b) there be appropriate orders requiring the applicants to bear the costs of the proceedings.

C.    The applicants seek leave to discontinue without any such conditions but if the Court is minded to impose such conditions upon the grant of leave, still seek leave to discontinue.

D.    The proceedings are listed for final hearing for five days commencing on 9 June 2025.

THE COURT ORDERS THAT:

1.    There be leave to the applicants to discontinue these proceedings on the terms of these orders.

2.    Rule 26.14 of the Federal Court Rules 2011 (Cth) shall not apply to the discontinuance.

3.    The applicants shall not commence any further proceedings in any court against the respondent based upon the allegations or asserting the same causes of action as those that were to be heard and determined commencing 9 June 2025, being those the subject of the minute of proposed amended application and the minute of proposed re-amended statement of claim as were ordered on 2 July 2024 to stand as the amended application and re-amended statement of claim respectively (copies of which are appended to these orders).

4.    Save to the extent already ordered, the applicants do pay the respondent's costs of the proceedings including any reserved costs.

5.    The quantum of the costs the subject of order 4 shall be assessed on a lump sum basis by a registrar acting as referee after receiving written submissions and any affidavits from the parties in accordance with a timetable set by the registrar.

6.    The registrar shall provide a copy of the referee report prepared pursuant to order 5 to the parties.

7.    Any application under r 28.67(1) of the Federal Court Rules shall be filed and served within 21 days of the registrar providing a copy of the referee report as provided for by order 6.

8.    Any further question as to whether the indemnity principle has been met in relation to the costs the subject of the referee report shall not be considered by the registrar and shall be determined at the time of considering whether to adopt the referee report.

9.    The respondent is entitled to pay the reasonable legal costs incurred by the respondent in the conduct of the defence of these proceedings from the assets of the bankrupt estates of the applicants.

10.    The filing of a notice of discontinuance is dispensed with.

11.    By operation of these orders, the proceedings are discontinued.

12.    The final hearing dates in these proceedings listed to commence on 9 June 2025 are vacated.

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

REASONS FOR JUDGMENT

COLVIN J:

1    Two years ago Mrs and Mr Frigger commenced proceedings against the trustee administering their bankrupt estates, Ms Kelly-Anne Trenfield. They alleged that by reason of the arrangements between Ms Trenfield and her employer, FTI Consulting (Australia) Pty Ltd, she had surrendered her independence to FTI. The focus of the claim was upon the nature of employment arrangements between Ms Trenfield and FTI and the consequences of those arrangements for the performance by Ms Trenfield of her duties as a trustee in bankruptcy. The relief sought was directed towards the removal of Ms Trenfield and obtaining orders to the effect that Ms Trenfield and FTI were not entitled to be reimbursed the costs of various court proceedings from the bankrupt estates.

2    In November 2023, issues were raised by way of amendment to the statement of claim about certain statements that had been made by Ms Trenfield when renewing her registration as trustee and the nature of insurance arrangements in place to cover the liabilities of Ms Trenfield when acting as a trustee in bankruptcy. However, those matters were advanced to support the case that the arrangements that Ms Trenfield had made with her employer, FTI, meant that she lacked the independence to discharge her office.

3    After that, an issue was raised as to whether FTI needed to be a party in circumstances where the relief sought was directed to both Ms Trenfield and FTI. Mrs and Mr Frigger then filed a proposed amended originating application in which those parts of the relief sought which were directed to FTI were removed. They later confirmed that they did not seek relief against FTI.

4    By March 2024, Mrs and Mr Frigger were seeking to introduce further amendments to their statement of claim in the proceedings. The proposed amendments were opposed by Ms Trenfield to the extent that they sought to introduce new allegations about the way in which the estates had been administered. The general basis for that opposition is evident from the following extract from the written submissions made for Ms Trenfield at the time:

Generally, the respondent's position is that these proceedings should be limited to the question as to whether the respondent's appointment as trustee should be rescinded and the relevant consequences (as set out in the originating application) if that order is found to be appropriate, by reason of matters relating to the respondent's compliance with the relevant requirements for her continuing registration as a trustee. That would include matters such as the respondent's employment status, independence, insurance etc.

Further additional amendments that will require further substantial evidence should be refused. The parties have already given their substantive evidence in these proceedings.

The proceedings should not be the vehicle for a wide ranging enquiry into the respondent's conduct in relation to the estates. That is beyond the scope of the originating application. The respondent's conduct vis-à-vis the estate does not lead to the primary relief sought by the applicants - namely the recission of her appointment.

5    One of the main matters to which the proposed amendments were directed was the way in which a share portfolio (Portfolio) had been administered by Ms Trenfield. As to the Portfolio, there had been substantial proceedings in which Mrs and Mr Frigger alleged, unsuccessfully, that the shares were not part of the assets of the bankrupt estates: Frigger v Trenfield (No 10) [2021] FCA 1500; Frigger v Trenfield (No 3) [2023] FCAFC 49; and Frigger v Trenfield [2023] HCASL 110.

6    On 16 May 2024, certain limited amendments to the statement of claim in the proceedings were allowed, but otherwise the application to amend was dismissed: Frigger v Trenfield (Application to Amend) [2024] FCA 508. My reasons given at that time, included the following:

(1)    'It is not suggested by Mrs and Mr Frigger that the claims that they now seek to add could not be the subject of separate proceedings if properly pleaded' (at [21]);

(2)    the proposed new claims 'focus to a considerable degree upon what has occurred in relation to the Portfolio' (at [21]);

(3)    'Usually, where fairness to other parties can be maintained, the Court will allow amendments to ensure that all of the substantive controversy between the parties is raised in a single proceeding. However, the Court is also concerned to avoid the prejudice that can arise from applications to amend and to facilitate the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible' (at [26]);

(4)    'What is now proposed by Mrs and Mr Frigger is the addition of claims that concern the way in which the estates have been administered, particularly in relation to the Portfolio. If that course is allowed, it will open up a substantial new controversy that is likely to delay significantly the adjudication of the existing issues in the proceedings which issues concern whether, having regard to her remuneration and employment arrangements with FTI, Ms Trenfield should be allowed to continue the administration' (at [29]);

(5)    'the over-arching purpose of resolving disputes quickly, inexpensively and efficiently may mean that doing justice as between the parties requires the present proceedings to be confined to their existing scope' (at [30]);

(6)    'the controversy that has given rise to the current proceedings concerns whether the arrangements between Ms Trenfield and FTI (and the communications with the Inspector General concerning those arrangements when renewing her registration) are reasons why she should be removed as trustee. It will be a means by which that separate issue, which has significance for the ongoing administration of the estates, is resolved promptly' (at [30]); and

(7)    'it may be preferable to require the matters that Mrs and Mr Frigger seek to raise by way of amendment to be the subject of separate proceedings. Such a course may be more efficient than treating the present application which has reached a stage where it is ready for hearing to be substantially delayed to allow Mrs and Mr Frigger to treat it as a form of omnibus proceeding in which they can raise a shopping list of complaints that are only connected to the present proceedings in the sense that they are also directed against Ms Trenfield and concern their bankruptcy' (at [30]).

7    Most of the contentious amendments then proposed by Mrs and Mr Frigger were not allowed because they would open up a substantial new controversy that should be the subject of separate proceedings: at [38], [41], [51].

8    On 25 June 2024, orders were made for the final hearing of all issues in the proceedings other than the quantum of any loss and damage or compensation to be provisionally listed for five days commencing on 10 February 2025.

9    On 2 July 2024, orders were made identifying the documents to stand as the amended application and the re-amended statement of claim in the proceedings.

10    On 23 October 2024, orders as to the filing of submissions for the final hearing of the proceedings were made and the matter was set down for trial of all issues other than the quantum of any loss and damage or compensation for 5 days commencing on 10 February 2025.

11    In early February 2025, Mrs and Mr Frigger sought orders vacating the hearing dates, for the joinder of FTI and for leave to further amend the statement of claim. For reasons that I gave on 12 February 2025, I allowed the adjournment but refused the applications to join FTI and to further amend the statement of claim: Frigger v Trenfield (Application to Adjourn Final Hearing) [2025] FCA 71. In those reasons, I summarised the proposed amendments in the following terms (at [18]):

A proposed further re-amended statement of claim was provided to the Court. It proposed the joinder of FTI as a party to the proceedings and sought to make the following additions to the statement of claim:

(1)    Particulars of an existing allegation (para 12) to the effect that Ms Trenfield and FTI executed an employment agreement when FTI purchased Korda Mentha Qld. The particulars refer to particular aspects of the employment agreement.

(2)    A new plea (as para 12A) to the effect that FTI 'fraudulently took over control from the official trustee of the Applicants' estates'. The plea is said to be based upon earlier pleas to the effect that Ms Trenfield provided a declaration of independence to the creditors of the estate 'that contained false statements' and the particulars to be added concerning aspects of the employment agreement.

(3)    Detailed particulars to proposed new para 12A listing various things allegedly done in the course of the administration, particularly matters in relation to the administration of the share portfolio.

(4)    A plea based upon para 12A to the effect that Ms Trenfield and FTI 'deliberately and fraudulently delayed and/or prevented the resolution and termination of the Applicants' bankruptcy'.

(5)    A plea (para 28A) that in its report to creditors FTI admitted it is a related entity of [Ms] Trenfield.

(6)    An expansion of the relief to include FTI.

12    As to the proposed amendments, I refused the application to amend (and the proposed joinder of FTI) for the following reasons (at [28]-[29]):

The issue is whether the contentions now advanced might support a claim of fraud in the terms now proposed to be added by way of further amendment as a basis for recovery of monies allegedly received by FTI. As I explain below, in my view the materials to which Mrs and Mr  Frigger propose to refer to support the claims of fraud which they wish to allege against FTI are an insufficient foundation for these claims.

The following reasons deal sequentially with each of the proposed amendments as listed above at [18] of these reasons:

(1)    The amendment to introduce the particulars is not necessary. The applicants are entitled to refer to particular provisions in the employment agreement in support of their case. To the extent that the amendments are proposed in order to support a proposed new plea of fraud, I deal with those matters below.

(2)    The proposed pleading is insufficient to provide a basis for a claim of fraud. Material facts must be pleaded to support a serious allegation of that kind. They must expose a basis upon which a conclusion of fraud may be reached. Further, as Mrs and Mr  Frigger act in person the Court must be satisfied that there is some evidentiary basis for the claims made (in circumstances where the Court cannot act on the basis that the duties of counsel are being discharged). The particulars and other matters raised are an insufficient basis for an allegation of fraud. The material to which reference was made in submissions was an insufficient foundation for a case to the effect that FTI has taken over the administration of the bankrupt estates (that is, completely usurped any involvement by Ms Trenfield in the administration) and is purporting to undertake work for Mrs and Mr Frigger as its own clients.

(3)    The proposed addition of claims in relation to the administration of the share portfolio was rejected by detailed reasons given in Frigger v Trenfield (Application to Amend) and no reason has been demonstrated as to why the proceedings should be expanded to include some form of complaint about the way the share portfolio has been administered as part of proceedings which concern whether the circumstances of Ms Trenfield's employment by FTI (or the matters advanced in support of her registration) provide a basis for her removal as trustee.

(4)    The proposed pleading is insufficient to provide a basis for a claim of fraud which requires material facts to be pleaded to support a serious allegation of that kind.

(5)    The matter the subject of proposed new plea 28A is a matter for evidence.

(6)    As has been explained, these proceedings have been conducted on the basis that the relief sought concerns Ms Trenfield and not FTI. Until now, a case against FTI has been expressly disavowed. The controversy in the proceedings is whether Ms Trenfield should be allowed to continue as trustee and whether the estate of Mrs and Mr Frigger should have to bear certain costs, fees and charges. FTI is not a necessary party to proceedings in which relief of the kind presently alleged is sought because that relief is directed to Ms Trenfield's conduct as trustee. The relief sought in the current proceeding extends to the reimbursement of any charges to the estates for work done by Ms Trenfield as well as other employees of FTI. There is also a claim that Ms Trenfield make good any losses to the estates. Ms Trenfield does not seek to involve FTI in the proceedings when it comes to the consequences of relief of that kind were it to be upheld. That is to say, Ms Trenfield does not seek, in the present proceedings, some form of indemnity or to make some other form of claim against FTI that would be contingent upon success by Mrs and Mr Frigger.

13    I note that the proposed allegations against FTI were sought to be justified on the basis that Mrs and Mr Frigger had recently discovered matters which they said supported a claim of fraud against FTI. As to the existing pleading, I noted (at [30]):

… until this point, Mrs and Mr Frigger have disavowed any claim against FTI consequent upon allegations to the effect that FTI have controlled the actions of Ms Trenfield and the administration has been conducted for the benefit of FTI. The proceedings have reached the stage where they are ready for final hearing on the basis that the only relief sought based upon FTI's alleged control of Ms Trenfield is the relief sought against Ms Trenfield.

14    The proceedings were relisted for final hearing for five days commencing on 9 June 2025.

15    On 12 May 2025, Mrs and Mr Frigger sought to adjourn the dates for the final hearing. The basis for the adjournment application was a pending application for leave to appeal my earlier decision refusing to allow both the joinder of FTI and certain amendments to the statement of claim. I refused the adjournment application: Frigger v Trenfield (Application to Adjourn Final Hearing) (No 2) [2025] FCA 580. In doing so, I reasoned as follows (at [26]-[27]):

… As I have noted, the case as presently pleaded has been advanced on the basis that relief is not sought against FTI. Further, as I have explained, the existing application has been on foot for almost two years and seeks to call into question the authority of Ms Trenfield to administer the bankrupt estates. Understandably, since the early stages of these proceedings, Ms Trenfield has been pressing for the prompt resolution of those claims which are framed in terms that seek to challenge the validity of her administration of the bankrupt estates. The evidence on the application was filed a considerable time ago.

Therefore, even if the application for leave to appeal succeeded, it would result in the introduction of a new case of a kind that concerns distinct issues. At best, the prejudice to Mrs and Mr Frigger will be the fact that they would be unable to include these further claims into the existing proceedings rather than pursuing them separately, assuming, of course, that there was a proper basis demonstrated to bring the proposed claims of fraud and the claims about administration of the bankruptcy insofar as it concerns the share portfolio.

16    On 27 May 2025, Mrs Frigger sent an email to the lawyers acting for Ms Trenfield. It was in the following terms:

Please have regard to the attached notice of discontinuance and advise whether Trenfield consents to discontinuance. If we do not hear from you by 9 am 28 May 2025 AWST, we will file an application.

17    A response was sent indicating conditions upon which Ms Trenfield would consent to the proposed discontinuance.

18    On 28 May 2025, Mrs and Mr Frigger filed an application in which they sought leave to discontinue the proceedings against Ms Trenfield on the basis that there be no order as to costs. In their written submissions in support of the application, they also sought a declaration that the discontinuance 'does not affect their right to bring new proceedings in respect of the same or similar subject matter'.

19    The position of Ms Trenfield was that leave to discontinue should only be granted on the following conditions:

(a)    [Mrs and Mr Frigger] not commence any further proceedings in any court against [Ms Trenfield] based on the allegations made in these proceedings or asserting the same causes of action; and

(b)    [Ms Trenfield] be entitled to her costs of the proceedings, on an indemnity basis, to be assessed by a Registrar on a lump sum basis, which costs [Ms Trenfield] is entitled to pay from the assets of the bankrupts' estates, forthwith.

20    At the outset of the hearing of the application for leave to discontinue, Mrs Frigger made clear that the application for leave to discontinue was pressed even if it was the case that the Court was not persuaded that the conditions upon the leave proposed by Mrs and Mr Frigger were ordered. That is to say, whatever the outcome as to the conditions Mrs and Mr Frigger sought to discontinue. Further, Mrs Frigger said that, of course she was going to try and convince the Court that the conditions upon leave to discontinue should not be the conditions sought by Ms Trenfield. Mr Frigger did not demur from that position when he was asked to make any submissions.

21    As will emerge, what Mrs and Mr Frigger sought to do was to commence fresh proceedings based, at least to a significant extent, upon the same material allegations as the proceedings they sought to discontinue. Significantly, they sought to persuade the Court that conditions which restricted the subject matter of the fresh proceedings should not be imposed upon leave to discontinue. The way the application was conducted by them made plain that they understood that the conditions sought by Ms Trenfield, if imposed, would affect the scope of any fresh proceedings that may be able to be commenced by them. They made submissions as to why conditions of that kind should not be imposed.

22    I should note that although Mrs and Mr Frigger conducted the proceedings on their own behalf, they are very experienced litigants. Their application for leave to discontinue was supported by detailed written submissions referring to relevant matters of principle and to authorities. Those submissions disclosed an understanding on their part that there was a real risk that the course they proposed may have consequences for their ability to commence fresh proceedings. It was their recognition of that possibility that explained why they sought a declaration that would allow them to commence fresh proceedings in the manner they proposed.

23    After hearing oral submissions, I reserved my decision. I determined that there should be leave to discontinue on terms and made orders to that effect the following day. At the time, I indicated that I would provide my reasons for making those orders. These are my reasons.

The reasons advanced by Mrs and Mr Frigger for seeking to discontinue

24    The position of Mrs and Mr Frigger was that they proposed to plead a new claim under the Australian Consumer Law relying on substantially the same facts as those pleaded in these proceedings and that the new proceedings would be commenced against both Ms Trenfield and FTI as respondents. They put their position in the following way in their written submissions:

In the present matter, the Applicants do not seek to discontinue pursuant to any settlement agreement, nor is there any deed of release. The purpose of the discontinuance is to enable the Applicants to recommence proceedings with better-formulated claims and a revised evidentiary basis, in circumstances where an interlocutory application to do so was dismissed.

Similarly, the Applicants respectfully submit that the Court should make a declaration that the discontinuance does not affect any rights to bring fresh proceedings, to avoid the risk of any issue estoppel or procedural bar being argued by the Respondent in future.

(emphasis added)

25    Significantly, Mrs and Mr Frigger described the purpose of the application for leave to discontinue as being to enable them to 'recommence proceedings' (that is, start again the same proceedings) in circumstances where they had sought and been refused an interlocutory application to amend the proceedings and add FTI as a respondent.

26    I drew the attention of Mrs and Mr Frigger to the fact that the interlocutory decision I had made did not prevent separate proceedings being brought against FTI in respect of those aspects that had not been included in the existing proceedings. The response given by Mrs Frigger (and adopted by Mr Frigger) was to the effect that she maintained (contrary to the interlocutory decisions that had been made) that it would not be fair for there to be separate proceedings pleading the causes of action alleged to have arisen from events that occurred in November 2024 and February 2025. The submission was to the effect that they should not have to continue with a final hearing where claims that they now wished to bring, being a joint claim against Ms Trenfield and FTI alleging 'what we believe to be very serious misconduct, misleading and deceptive conduct and deceit' would not be included. They maintained that they had a right to discontinue on a basis that preserved the ability to bring new proceedings.

27    The application to discontinue was described by Mrs Frigger as an attempt to pause the current case. Of course, an interlocutory application to adjourn had been refused. Therefore, insofar as the application sought to 'pause' the final hearing of proceedings to commence the following week, it was an attempt to circumvent the consequences of the interlocutory decision to refuse the adjournment application on the basis of the proposed expansion of the claims. That was made plain when, in oral submissions, Mrs Frigger explained that the reason for the application was the refusal of the interlocutory applications to amend the statement of claim in the current proceedings and to expand the causes of action. In Mrs Frigger's own words: '… your Honour did not allow us to do that and so this is the course we are choosing to take'.

Contentions advanced by Mrs and Mr Frigger in support of the application

28    The following contentions were advanced to support the orders sought by Mrs and Mr Frigger:

(1)    discontinuance with a view to repleading a claim was said to be an ordinary forensic step relying on Babscay Ptd Ltd v Pitcher Partners [2020] FCA 1610;

(2)    it was not the function of the Court to engage in a retrospective hypothetical trial to allocate costs where no determination on the merits had occurred;

(3)    it is not appropriate to impose indemnity costs or 'litigation restraint orders' absent misconduct relying upon the decision in Foots v Southern Cross Mine Management Pty Ltd [2007] HCA 56; (2007) 234 CLR 52 for the proposition that such orders are 'exceptional and not presumed';

(4)    no injustice would arise from the discontinuance;

(5)    there was no prejudice to Ms Trenfield because, as an employee of FTI, she bears no personal liability for legal costs which were said to be payable by FTI without any right of recovery from Ms Trenfield, relying upon the terms of an employment agreement (cl 28);

(6)    there would be no forensic disadvantage to Ms Trenfield if there was leave to discontinue on the terms proposed by Mrs and Mr Frigger because the work done on evidence and submissions would be relevant in the proposed new proceedings to be brought by them;

(7)    the submission by Ms Trenfield that the proceedings distract from the administration of the estates should not be accepted because there is nothing in the proceedings that stops the administration from continuing;

(8)    the proposed declaration to the effect that no issue estoppel would arise from the discontinuance was 'appropriate and necessary' and was said to be supported by the decision in Wotton v State of Queensland [2009] FCA 758;

(9)    the application for leave to discontinue was 'a principled attempt to withdraw, regroup and proceed afresh'; and

(10)    the authorities relied upon by Ms Trenfield did not apply to the present circumstances.

Contentions for Ms Trenfield

29    Ms Trenfield submitted that the course proposed by Mrs and Mr Frigger would be an abuse of process because they were attempting to circumvent the interlocutory decisions that had been made and to engage in tactical manoeuvring of a kind that impeded the just, quick and efficient resolution of the litigation.

30    As to alleged prejudice, the written and oral submissions raised the following matters as to why the conditions proposed by Ms Trenfield were required:

(1)    Ms Trenfield had been pressing for some time for the issues raised by the proceedings (which challenged her authority to act as trustee) to be resolved;

(2)    there would be prejudice in denying to Ms Trenfield the imminent timely resolution of what was said to be longstanding allegations which are 'continuing to distract from the administration of the estates';

(3)    whatever forensic advantage might have been obtained by reason of the way the case had been conducted and the issues limited would be lost;

(4)    the commencement of fresh proceedings would increase costs; and

(5)    the course proposed by Mrs and Mr Frigger would distract from the administration of the estates and require FTI to continue to carry external expenses incurred by Ms Trenfield in these proceedings and any fresh proceedings.

31    An order for costs on an indemnity basis was sought relying upon the conduct of Mrs and Mr Frigger in bringing the application for leave to discontinue.

32    Finally, it was the position of Ms Trenfield that if the application to discontinue was not to be allowed on the conditions proposed by Ms Trenfield then the appropriate course was to allow the final hearing to proceed so that there would be a final determination of the issues. Ms Trenfield did not seek to have the matter proceed to final hearing. Rather, she sought to have the conditions that she proposed imposed and for the matter to go to final hearing only if the Court was minded not to impose those conditions.

Issues for determination

33    Having regard to the competing contentions, the issues for determination on the application by Mrs and Mr Frigger for leave to discontinue were as follows:

(1)    What were the principles to be applied when considering the appropriate conditions to be imposed when granting leave to discontinue?

(2)    Would the course proposed by Mrs and Mr Frigger be an abuse of process?

(3)    Was it appropriate for the final hearing to proceed?

(4)    If leave was to be given to discontinue, having regard to the answers to (1) and (2), what conditions should apply to the leave?

(5)    What orders should be made as to costs?

Issue (1): The principles to be applied when considering the appropriate conditions to be imposed when granting leave to discontinue

34    Discontinuance is the act of the party who discontinues. It brings the proceedings to an end without any substantive or procedural adjudication by the Court of the claims being made in the proceedings. A substantive adjudication will occur where the Court has considered the merits of the claims being made and determined the outcome. A procedural adjudication will occur where the Court makes orders by reason of a failure to comply with the orders of the Court or by reason of some abuse of the Court's procedures, but without adjudicating the merits. In the interests of finality, an adjudication, whether substantive or procedural, will have consequences for any future proceedings. The relevant distinctions were explained in Zetta Jet Pte Ltd v The Ship 'Dragon Pearl' (No 2) [2018] FCAFC 132; (2018) 265 FCR 290 at [33]-[34].

35    Even though discontinuance is the act of the party who discontinues, it is common for the rules of civil practice and procedure adopted by courts to limit the circumstances in which a party may discontinue proceedings by imposing a requirement for leave to discontinue. Leave is usually required after 'close of pleadings', being the point early on in the proceedings when the case as alleged has been articulated and the defence to those allegations (and any reply) has been filed.

36    The requirement for leave allows the court to supervise any discontinuance in order to ensure that unfairness does not result. In deciding whether to grant leave to discontinue, the Court will consider whether conditions should be imposed to avoid unfairness. In most instances, prejudice to the other parties can be addressed by imposing a condition as to costs. However, that is not always the case. Discontinuance close to or during trial deprives the other parties of imminent and authoritative adjudication of the controversy between the parties. If there is the prospect of fresh proceedings there is likely prejudice in the form of delay. More fundamentally, having been brought before the Court and required to prepare a defence and be ready for trial, discontinuance will deprive the other parties of their expected final resolution of the dispute. Further, late discontinuance may be no more than an attempt to delay or avoid the inevitability of an adverse decision. Or it may be sought to have time to recast the case or undertake forensic steps that ought to have been taken much earlier. Depending upon the circumstances, in such cases, the Court may impose conditions concerning the prospect of future proceedings. Examples are considered below.

37    Before considering the examples, it is important to distinguish one category of case from the others. In some instances where the proceedings are well-advanced, but the purpose of the proceedings has been overtaken by events not attributable to either party, the Court may give leave to discontinue on the basis that each party bears its own costs. In such instances, the Court does not undertake an inquiry as to the likely outcome simply for the purpose of determining the appropriate costs order. Rather it considers whether the parties have acted reasonably in commencing and defending the proceedings: Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622 at 624-625. If both parties have acted reasonably, in such a case the Court may allow a discontinuance on the basis that there is no order as to costs. However, the present case is not in that category of case.

38    As the submissions for Mrs and Mr Frigger acknowledged, 'conditions are usually applied where there is clear misconduct or tactical misuse of the court's processes'. The parties referred to the following examples of instances where the Court considered the imposition of conditions upon leave to discontinue that were directed to whether the party seeking to discontinue would be free to commence fresh proceedings.

39    Mrs and Mr Frigger relied upon the decision in Babscay. It concerned an application for approval to discontinue representative proceedings under the applicable statutory regime. The application was not opposed by the respondents. The issue in that case was whether the discontinuance was unfair, unreasonable or adverse to the interests of the group members on whose behalf the common issues raised by the proceedings would have been adjudicated. In circumstances where there would be no limitation of action consequences, approval was given pursuant to the relevant statutory provisions. The case is far removed from the present and provides no relevant assistance for present circumstances.

40    Reliance was also placed by Mrs and Mr Frigger upon the reasoning of Rares J in Wotton. It was also a case concerned with an application for leave to discontinue representative proceedings. In Wotton, there was an issue as to whether leave was needed and, if so, whether the applicants should be ordered to pay the respondents' costs. His Honour found that the proceedings were not properly constituted as a representative proceeding and, consequently, the issue was whether there should be leave to discontinue what was characterised as an individual application against the State of Queensland and an application for an extension of time to bring human rights proceedings by the applicants against other respondents. It was agreed that any order permitting discontinuance should be framed so as to not affect the rights of other group members: at [42]. Leave was given to discontinue on specific terms as to costs. The proceedings were at any early stage and no issues of the kind that arise in the present case were required to be considered.

41    The first of the authorities relied upon by Ms Trenfield was Tydeman v Asgard Group Pty Ltd, in the matter of Asgard Group Pty Ltd [2023] FCA 486 at [92]-[94], [98]-[99]. In that case, the plaintiffs acted on their own behalf at the substantive hearing, but were represented by counsel when they subsequently sought to file a notice of discontinuance. At the time that the plaintiffs sought to discontinue, the substantive hearing of their application had concluded, the decision had been reserved and they had been advised that judgment was to be delivered the following day. The reason for the discontinuance was said to be that the plaintiffs did not want reasons for judgment to be published and made public. The plaintiffs controlled the defendant and sought to discontinue the proceedings on the basis of an alleged consent by the defendant to that course. Stewart J found that, in the particular circumstances of the case, the defendant could not consent and leave to discontinue was required: at [87]-[91]. His Honour then summarised the principles to be applied when considering whether to grant leave to discontinue in the following terms (at [92]):

(1)    The discretion whether to grant leave is wide and unfettered.

(2)    It is generally undesirable to compel a party to pursue litigation it no longer wishes to pursue.

(3)    However, consideration should be given to all relevant circumstances.

(4)    Those circumstances include whether discontinuance against one respondent may impose injustice on another respondent by removing an advantage that respondent may otherwise enjoy in the proceedings.

(5)    It is relevant to have regard to whether the discontinuance would make any difference to the burden of litigation undertaken by the applicant and whether the application to discontinue results from a conclusion that the litigation cannot succeed or is inspired by other reasons.

42    In the unusual circumstances of the case, Stewart J refused leave to discontinue, published reasons and made final orders disposing of the proceedings. Tydeman was not a case where the plaintiffs had indicated that they were seeking to discontinue in order to commence fresh proceedings almost immediately in which they intended to raise the same (and other) issues. The prejudice in that case arose from the fact that the underlying issues had been agitated in open court and had been deliberated upon and it was 'important that any future court that might be faced with another manifestation of the plaintiffs' ongoing obsession with the same underlying dispute has available to it a record of the events of this case'. The possibility that discontinuance might mean that further proceedings raising the same issues might be commenced was also considered.

43    Respectfully, I agree with Stewart J's statements of general principle which are supported by the authorities to which his Honour made reference. However, the circumstances of the present case are materially different from than that which faced his Honour. Mrs and Mr Frigger bring an application on the eve of the final hearing for the express purpose of avoiding the consequences of interlocutory decisions that have been made as to the scope of the proceedings. They propose a course which will deprive Ms Trenfield of timely adjudication of those issues. Mrs and Mr Frigger are insistent on maintaining that there should be a discontinuance. They have made plain that they seek to discontinue even if the conditions proposed by Ms Trenfield are imposed. Finally, Ms Trenfield proposes discontinuance on conditions. It would be a very different burden to require the final hearing to proceed in circumstances where Mrs and Mr Frigger have made plain that they do not wish to proceed and Ms Trenfield does not press for the final hearing to proceed if particular conditions are imposed upon leave to discontinue.

44    Ms Trenfield also relied upon Thunder Studios Inc (California) v Kazal (No 11) [2020] FCA 1656. In that case, the trial of a claim and cross-claim had reached the sixth day. The hearing of the cross-claim was about to commence. On the night before, one of the cross-respondents gave notice that he wished to discontinue the cross-claim. The application for leave to discontinue was opposed. Leave to discontinue was refused by Rares J. His Honour recognised that leave to discontinue would usually be given provided there was no injustice to the opponent and that courts are mindful that parties should not be required to litigate against their will: at [13]. His Honour also observed that the Court will rarely grant leave to discontinue once a final hearing has commenced: at [14]. Emphasis was placed upon the disadvantage to the responding parties of being deprived of the fruits of the proceeding and 'that, ordinarily, once the parties have defined their positions, prepared their cases and proceeded to a hearing, it will be unfair to deprive a party who has obtained a forensic advantage of that advantage by allowing the cause of action to remain unresolved': at [16].

45    As with Tydeman, leave was not given to discontinue in circumstances where the final hearing of the cross-claim was imminent and the discontinuance was opposed. As has been noted, here Ms Trenfield proposes leave on the basis of conditions and only seeks to proceed if those conditions are not imposed.

46    Reference was also made by Ms Trenfield to the reasoning of Chesterman J in Wickham v Bells Securities Pty Ltd [2006] QSC 167. In that case, days before a trial was scheduled to commence, an adjournment of the commencement for two days was granted. Then on the day before the re-scheduled date, a further adjournment was granted. Later the plaintiff sought leave to discontinue against the defendants. Leave was given to discontinue as against the second defendant on conditions that included a condition that the plaintiff 'not commence any further proceedings in any court against the second defendants based upon the allegations made in the current proceeding or asserting the same causes of action': at [29]. The condition was imposed on the basis that it was 'only fair that the disadvantage' (of the discontinuance) should fall on the plaintiff: at [28].

47    I now turn to consider some other authorities concerned with discontinuance.

48    In Trade Practices Commission v Manfal Pty Ltd (No 3) (1991) 33 FCR 382, the Commission commenced proceedings against Manfal and five natural persons said to be jointly and severally liable with Manfal to pay the compensation sought. Subsequently, Manfal was ordered to be wound up. The Commission reached settlement terms with Manfal and sought leave to discontinue. In considering matters of general principle, Lee J said at 383-384:

… The court will give consideration to the need to refrain from compelling a party to litigate against its will but will also consider the extent to which the proceedings have developed and whether discontinuance against one respondent may impose injustice on another respondent by removing an advantage that respondent may otherwise enjoy in the proceedings or by imposing a disadvantage. In considering the undesirability of an applicant being forced to continue litigation unwillingly, it is relevant to have regard to whether the discontinuance would make any difference to the burden of litigation undertaken by the applicant and whether the application to discontinue results from a conclusion that the litigation cannot succeed against that respondent or is inspired by other reasons.

The requirement of the Federal Court Rules that, in the absence of consent of all parties, discontinuance of litigation against a party only be permitted by leave of the court contemplates a judicial review of all relevant circumstances and the satisfaction of the court that the grant of leave is proper in all the circumstances. In some cases the court may determine that a grant of leave to discontinue should be attended with conditions and in a rare case the court may determine that the only appropriate order is to refuse the leave sought.

49    Leave to discontinue was refused having regard to the nature of the coordinate statutory liability, the procedural fairness of requiring the Commission to establish its case against all those who were said to be liable and the public interest.

50    In Royal Caribbean Cruises Ltd v Reed (No 4) [2021] FCA 614, there was an application on the eve of a final hearing seeking leave to discontinue. It was a case where there was litigation concerning the same subject matter that was on foot in the United States. In those circumstances, Stewart J reasoned as follows:

(1)    'a plaintiff should not be compelled to litigate against its will and that the court should therefore grant leave to discontinue, if it can, without injustice to the defendant' (at [9]);

(2)    'a court should lean towards giving leave to do so unless that would cause "manifest injustice" to the opponent' quoting Sheppard J in SCI Operations Pty Ltd v Trade Practices Commission (1984) 2 FCR 113 at 182 (at [9]);

(3)    'the respondents are already facing [a case concerning the same subject matter] in Florida, so there in little uncertainty in that regard such that there would be no basis for me to make the leave subject to a condition that the applicants not be able to bring that case anywhere' (at [11]); and

(4)    'The applicants were content to commit to not bringing [that case] in Australia, and for that reason I was prepared to impose a condition to that effect' (at [11]).

51    His Honour also referred to the reasoning of Bergin J in Greaves v CGU Insurance Ltd [2004] NSWSC 912 where it was argued that leave to discontinue should be given on condition that 'the plaintiff be prevented from bringing fresh proceedings or to claim the same relief in fresh proceedings as in these proceedings, and be prevented from bringing further proceedings on the same or substantially the same cause of action as in these proceedings without the leave of the Court': at [3]. In that case, Bergin J reviewed authorities to which reference has already been made (and others) and concluded, in effect, that there was no requirement that a condition of that kind should be imposed. However, it may be noted that the proceedings were still being case managed and were far from being ready for trial. Although it was being managed with other proceedings in which a special question had been determined there had been no order that would make the outcome of the determination of that question binding in the proceedings. In short, it was not an instance where the final hearing was imminent. It is not surprising that a condition of the kind proposed was not accepted as being necessary to avoid prejudice to the responding party in those circumstances as there was no loss of the opportunity for an adjudication at a trial that was about to commence.

52    Finally, it may be accepted that, absent the imposition of conditions concerning fresh proceedings, a discontinuance does not give rise to res judicata or issue estoppel. However, even if conditions are not imposed upon a discontinuance in terms that prevent the commencement of fresh proceedings on the same basis as the discontinued proceedings, the Court may still conclude subsequently that, in all the circumstances, the commencement of subsequent proceedings is an abuse of process that would not be permitted: see the review of authorities by Jessup J in Thirteenth Corp Pty Ltd v State [2006] FCA 979 at [34]-[37]. In my view, it is preferable to avoid uncertainties as to such matters by imposing appropriate conditions, especially where, as here, the point is raised by the responding party at the time of discontinuance.

53    Regard to these authorities caused me to conclude that, in an appropriate case, the Court may condition any leave to discontinue upon terms which limit the proceedings which may be commenced in the future by the party seeking to discontinue against other parties to the proceedings to be discontinued. Further, where, as here, the discontinuance is close to the scheduled dates for a final hearing, leave may be refused where the other parties seek to proceed with the hearing (on the basis that discontinuance at such a late stage would deprive the other parties of the imminent hearing and the finality that it would bring). Although a party will generally not be forced to litigate against its will, such a course may be appropriate in order to avoid injustice to the other parties or the public interest. However, where the position of the responding party is that there should be discontinuance on terms which limit future proceedings then the imposition of such a condition is likely to be appropriate in order to avoid the injustice associated with the loss of the imminent final resolution of the controversy for which that party has prepared.

Issue (2): Abuse of process

54    The course proposed by Mrs and Mr Frigger was an obvious abuse of process. The abuse was threefold. Firstly, there was the explicit acknowledgment by them that the purpose of the discontinuance was to avoid the consequences of the interlocutory decisions (adverse to them) on their applications to further amend their statement of claim, join FTI and to adjourn the final hearing.

55    Secondly, Mrs and Mr Frigger still sought to pursue the very claims that were the subject of the existing proceedings. However, they only sought to do so in fresh proceedings. Having burdened Ms Trenfield with the current proceedings and a considerable number of interlocutory hearings, they sought to start again just at the point when Ms Trenfield was able to expect their imminent final resolution and was ready to proceed with the final hearing.

56    Thirdly, by the time of the application for leave to discontinue, these proceedings had been on foot for two years. They raised issues as to the authority of Ms Trenfield to administer the bankrupt estates. Whilst there was no injunction in place to prevent Ms Trenfield from proceeding with the administration, the position of Mrs and Mr Frigger in the proceedings had been that Ms Trenfield's appointment as trustee ought to be rescinded ab initio and she could make no claim for her fees and disbursements in the conduct of the administration (including very considerable legal costs incurred in successfully defending proceedings brought by Mrs and Mr Frigger concerning the Portfolio).

57    At the same time as conducting the litigation against Ms Trenfield challenging her authority, Mrs and Mr Frigger had been pressing for the administration of the estates to be concluded. The Court had also asked for reports as to the progress of the administration. Understandably, throughout the litigation, Ms Trenfield had pressed for the prompt resolution of the challenge to her authority. There was obvious significant prejudice if this uncertain position created was allowed to continue. The final hearing had already been adjourned from February 2025 to June 2025 to accommodate the personal circumstances of Mrs Frigger. It had been adjudicated that the proposed additional claims that Mrs and Mr Frigger sought to bring against Ms Trenfield and against FTI could be brought by separate proceedings (assuming that there is a valid basis to bring them). The course proposed by Mrs and Mr Frigger was unfair and contrary to the just, quick and efficient resolution of the issues raised by the existing proceedings.

Issue (3): Discontinuance or final hearing

58    As has been mentioned, Ms Trenfield only sought to have a final hearing in circumstances where the Court was minded not to impose the conditions that she proposed upon the proposed discontinuance. On the other hand, Mrs and Mr Frigger did not seek to proceed to final hearing. Their position was that they wanted to discontinue and they would seek to persuade the Court that the conditions proposed by Ms Trenfield should not be imposed.

59    As has been explained, the Court is reluctant to force a party to conduct a trial (or final hearing) that they do not wish to conduct. However, the Court may do so in order to prevent prejudice to the other party, especially where the trial is imminent or underway.

60    As explained below, I was persuaded that the conditions sought by Ms Trenfield should be imposed. Although it was proposed that costs be ordered on an indemnity basis, as explained below that application really fell away.

61    Therefore, in my view, it was not appropriate to require the final hearing to proceed.

Issue (4): Conditions applying to the leave to discontinue

62    Rule 26.12 of the Federal Court Rules 2011 (Cth) provides that a party may discontinue a proceeding in whole or in part by filing a notice, but that leave of the Court or the other party's consent is required unless certain conditions are met. None of those conditions were met in the present case, so leave was required. The second note to r 26.12(2) states: 'The Court may give leave subject to conditions including costs - see rule 1.33'. Rule 1.33 provides: 'The Court may make an order subject to any conditions the Court considers appropriate'. The appropriateness of any condition must be reasoned judicially and, like the rules themselves, must not be inconsistent with the Federal Court of Australia Act 1976 (Cth). The decision as to the terms of any conditions must be guided by an assessment of the interests of justice in the particular circumstances.

63    As has been explained, the conditions that were proposed were (a) as to future proceedings that may be commenced by Mrs and Mr Frigger; and (b) as to costs. I will deal with each separately.

Conditions as to future proceedings

64    In the present case, I considered that the following matters justified the imposition of the condition as to future proceedings sought by Ms Trenfield:

(1)    discontinuance without the imposition of the condition would facilitate an abuse of process by Mrs and Mr Frigger;

(2)    the final hearing was imminent;

(3)    as has been explained, there was obvious prejudice to Ms Trenfield if the proceedings and the opportunity for an imminent final determination of the claim that Ms Trenfield's arrangements with her employer FTI meant that her appointment should be rescinded ab initio was lost; and

(4)    Mrs and Mr Frigger's ability to bring proceedings based upon other allegations was not affected by the conditions (noting that the interlocutory decisions refusing leave to add further claims had been made, in part, for case management reasons and on the express basis that other claims may be brought separately).

65    I was concerned that part of what was proposed by Mrs and Mr Frigger was the commencement of proceedings against FTI based upon the same allegations as had been made by them against Ms Trenfield (in circumstances where they had chosen not to join FTI). However, in my view, any issue that may arise in respect of proceedings of that kind was a matter for FTI to raise if and when proceedings of that kind were commenced. In short, it was appropriate that the condition as to future proceedings operate as between Mrs and Mr Frigger on the one hand and Ms Trenfield on the other.

66    I was also concerned that the orders would have the effect of preventing Mrs and Mr Frigger from pursuing in the future any claims based upon the existing allegations made in the proceedings against Ms Trenfield. However, Mrs and Mr Frigger had been given the opportunity of a final hearing of claims based upon those allegations and had chosen not to pursue that opportunity. Instead, they sought to take a tactical approach to circumvent the interlocutory decisions of the Court. It was an approach that ought not be countenanced. The decision to discontinue was theirs. It was made in the knowledge that Ms Trenfield sought the imposition of the condition as to future proceedings. In determining where the burden of the fact that trial would not proceed should fall, it was appropriate in those circumstances for it to fall upon Mrs and Mr Frigger.

Conditions as to costs

67    As to costs, I considered that a condition that Mrs and Mr Frigger pay the costs of the proceedings to be the inevitable consequence of the imposition of the condition as to future proceedings given the reasons for that conclusion. It meant that those costs had been wasted. The proceedings were being brought to an end on the eve of the commencement of the final hearing through no fault on the part of Ms Trenfield. Responsibility for that outcome lay at the feet of Mrs and Mr Frigger. Their conduct had not been reasonable. It was appropriate that they bear the costs.

68    Ms Trenfield had proposed that the costs be ordered on an indemnity basis based upon the conduct in relation to the discontinuance. There must be some 'special or unusual feature' that justifies an award of indemnity costs: Melbourne City Investments Pty Ltd v Treasury Wine Estates Limited (No 2) [2017] FCAFC 116 at [5] (Jagot, Yates and Murphy JJ). The order marks the Court's disapproval of the way in which, or the purpose for which, the proceedings have been conducted by one party, but operates to compensate fully the other party for the costs consequences and not to punish. The principles were summarised by Wigney J in Australian Competition and Consumer Commission v Colgate-Palmolive Pty Ltd (No 5) [2021] FCA 246 at [6]-[12].

69    The conduct of Mrs and Mr Frigger in seeking to discontinue did not affect any of the costs that had been incurred up until then. That is to say, if the proceedings had continued to trial and Ms Trenfield had been successful, then the fact that the application for leave to discontinue had been refused would not be a basis for an order for indemnity costs. No other conduct was identified as the basis for an indemnity costs order. When those matters were exposed, quite properly that aspect of the application was not seriously pressed.

70    An order for costs is made by way of indemnity. The submissions for Mrs and Mr Frigger included a contention that Ms Trenfield had no liability for the costs and the liability for the costs of the proceedings was with FTI. Mrs and Mr Frigger have raised issues in relation to whether the indemnity principle has been satisfied in other proceedings: see Feutrill J in Frigger v Professional Services of Australia Pty Ltd (No 6) [2024] FCA 1320 at [29]-[32]. As is there explained, where there is a legal practitioner on the record for a party then that party is taken to be liable for those costs. It falls upon the party claiming that the indemnity principle is not satisfied to prove that to be so.

71    The indemnity principle applies where there is a legal liability to pay, even though the likelihood is that a third party will discharge the liability.

72    Mrs and Mr Frigger referred to a provision in an agreement between Ms Trenfield and FTI which was alleged to be to the effect that Ms Trenfield had no personal liability for the legal costs of the proceedings which were to be borne by FTI. The provision was to the effect that FTI shall indemnify Ms Trenfield to the fullest extent permitted by law 'with advancement of legal fees and other expenses on a current basis to the fullest extent permitted by law'. The provision was expressed as an indemnity. It also required Ms Trenfield to repay all amounts advanced if it was found that she was not entitled to indemnification. A provision of that kind, assuming it applied to the costs of the proceedings, did not mean that Ms Trenfield had no personal liability for the legal costs incurred in defending the proceedings. Rather, it was an agreement by FTI to provide the funds to enable Ms Trenfield to discharge the liability that she had incurred.

73    For those reasons, I did not accept the contention to the effect that Ms Trenfield had no personal liability for the legal costs.

Issue (5): The terms of the orders as to costs

74    Ms Trenfield sought orders for the lump sum assessment of costs. The approach that the Court adopts in considering whether to order costs to be assessed on a lump sum basis was explained by Jackson J in Frigger v Trenfield (No 11) [2022] FCA 326 at [72]-[76]. I was persuaded that it was appropriate to assess the costs of the proceedings on a lump sum basis.

75    In order to ensure efficiency in the assessment of those costs on a lump sum basis I determined that a report should be obtained from a Registrar acting as a referee. Once that report has been received then a hearing will be conducted by a judge as to whether to adopt the report. I made orders for those steps to occur. To the extent to which the report is not adopted, the judge can make the lump sum assessment.

76    As I have indicated, a submission was advanced by Mrs and Mr Frigger to the effect that costs should not be awarded because Ms Trenfield has no liability to meet those costs. The issue having been raised and determined, I considered it appropriate to make clear that any further issue in relation to the application of the indemnity principle was not to form part of the referee process which was to be concerned with the reasonableness of a lump sum costs award based upon the costs incurred and the nature of the proceedings.

The terms of orders made

77    For the above reasons, I made orders that there be leave to discontinue the proceedings substantially on the conditions proposed by Ms Trenfield (save that I did not order costs on an indemnity basis). As the acceptance of that position meant that Mrs and Mr Frigger could not recommence the proceedings, I ordered that r 26.14 of the Federal Court Rules not apply to the discontinuance. It provides that: 'Discontinuance under this Division cannot be pleaded as a defence to a proceeding in relation to the same, or substantially the same, cause of action'. However, the note to the rule expressly contemplates that the Court may permit a party to discontinue on terms inconsistent with the rule by exercising the power conferred by r 1.35. For reasons I have given, I was persuaded that the discontinuance in the present case should be on terms that did not allow the commencement of any further proceedings in any court against Ms Trenfield based upon the allegations or asserting the same causes of action as those that were to be heard and determined commencing 9 June 2025. Consequently, the terms of that order may be raised in answer to any proceedings commenced contrary to the condition.

78    In addition I made the orders as to costs that I have explained.

79    I made those final orders on a Friday, having heard the application the day before and in circumstances where the final hearing was to commence on the Monday of the following week. Mrs and Mr Frigger had made clear that they did not seek to proceed with the final hearing even if the conditions sought by Ms Trenfield were imposed. Instead, they sought to commence new proceedings against FTI and Ms Trenfield and sought to persuade the Court that the conditions to be imposed on the discontinuance should allow them to recommence the claims against Ms Trenfield the subject of these proceedings. As I have explained, for the reasons given, I did not accept that submission. It was necessary for there to be certainty so that arrangements could be made in respect of the attendance of witnesses. In those circumstances I dispensed with the filing of a notice of discontinuance, made a declaratory order that the proceedings had been discontinued and vacated the dates for the final hearing.

Associate:

Dated:    19 June 2025