Federal Court of Australia

Australian Securities and Investments Commission v Keystone Asset Management Ltd (receivers and managers appointed) (in liquidation) (No 4) [2026] FCA 89

ORDERS

THE COURT ORDERS THAT:

1.    The orders made on 27 August 2024 be amended so that the definition of “Relevant Capacities” in the notes to those orders reads as follows (with the changes marked up):

“Relevant Capacities”, in relation to the First Defendant, means its capacity as responsible entity of the SMF, its capacity as trustee for the ADPF, and its capacity as trustee for the Quantum PE Fund, and its capacity as trustee for the CDPF; and”

and by inserting the following definition in the notes:

“CDPF” means the Chiodo Diversified Property Fund;

2.    The second defendant’s interlocutory application dated 11 February 2026 (seeking to partially set aside certain subpoenas) be dismissed.

3.    Costs be reserved.

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

REASONS FOR JUDGMENT

MOSHINSKY J:

Introduction

1    By an objection letter dated 23 January 2026 and an interlocutory application dated 11 February 2026, the second defendant, Paul Anthony Chiodo, applies to set aside in part subpoenas that have been issued to three banks at the request of the first defendant, Keystone Asset Management Ltd (receivers and managers appointed) (in liquidation) (Keystone). In substance, the requests for the issue of the subpoenas were made by the Court-appointed receivers and managers of Keystone (the Receivers), being Jason Tracy and Glen Kanevsky.

2    The subpoenas in question were issued to Westpac Banking Corporation, Australia and New Zealand Banking Group Ltd and Commonwealth Bank of Australia.

3    Relevantly, the subpoenas seek production of bank statements in relation to certain accounts of Mr Chiodo, Chiodo Corporation Pty Ltd, certain members of Mr Chiodo’s family, Donchiod Group and Pure Development and Project Management Pty Ltd. The account numbers are set out in the interlocutory application. In respect of those accounts, documents have been produced by the banks in response to the subpoenas. In addition to the accounts specified in the interlocutory application, at the hearing, counsel for Mr Chiodo sought to expand the interlocutory application to also cover certain bank accounts of Chiodo Corp Operations Pty Ltd, Mr Chiodo, members of Mr Chiodo’s family and Chiodo Corporation Pty Ltd in respect of which bank statements have not been produced by the banks. This expansion was sought on the basis of completeness. It does not raise any new or different issues and no objection was taken to the expansion. I will therefore proceed on the basis that the interlocutory application relates to those bank accounts as well.

4    In support of the interlocutory application, Mr Chiodo relies on two affidavits:

(a)    an affidavit of Sascha Kenny, a solicitor at Velocity Legal, the solicitors acting for Mr Chiodo, dated 14 January 2026; and

(b)    an affidavit of Seamus Ryan, a solicitor and director of Velocity Legal, dated 11 February 2026.

5    In response to the interlocutory application, the Receivers rely on an affidavit of Kimberley MacKay, a partner of Norton Rose Fulbright Australia, the solicitors for the Receivers, dated 5 February 2026.

6    In support of the subpoenas, the Receivers rely on two alternative contentions:

(a)    The first contention is that the bank statements sought by the subpoenas may be relevant to an issue raised in an interlocutory application that has been filed by the Receivers (in their capacity as receivers and liquidators of Keystone) (the Appointees) in the proceeding, namely an application for judicial directions in relation to the realisation of certain securities held by the Shield Master Fund (SMF) and the interim distribution of the proceeds of that sale (the Interim Distribution Application). The issue concerns the possible intermingling of funds, as discussed below.

(b)    The second contention is that the bank statements sought by the subpoenas will assist the Receivers to perform their role, which includes identifying and securing the property of Keystone, including as trustee of certain funds. The Receivers consider that the bank accounts listed in the subpoenas may have received money from one of the funds of which Keystone is the trustee, namely the Chiodo Diversified Property Fund (CDPF).

7    In the course of the hearing, the parties referred to materials that have been filed in connection with the Interim Distribution Application, in particular, an affidavit of Mr Tracy dated 29 January 2026 and an outline of submissions filed by the Appointees dated 29 January 2026.

8    For the reasons that follow, I have concluded that the application to partially set aside the subpoenas should be dismissed. In summary, I do not accept the Receivers’ first contention, but I do accept the Receivers’ second contention.

Background facts and matters

9    By orders made 27 August 2024, Jason Tracy and Lucica Palaghia were appointed as joint and several receivers and managers of the “Property” of Keystone. The word “Property” was defined in the notes to the orders as “all real or personal property, assets or interests in property of any kind, within or outside Australia including choses in action and, by virtue of s 1323(2A) of the [Corporations Act 2001 (Cth)], any property held otherwise than as beneficial owner”. Subsequently, Mr Kanevsky replaced Ms Palaghia as one of the Receivers.

10    Paragraphs 4-6 of the 27 August 2024 orders set out the purposes for the Receivers’ appointment and the powers of the Receivers:

4.    Until further order, pursuant to s 1323(1)(h) of the Corporations Act, Jason Tracy and Lucica Palaghia of Deloitte Financial Advisory Pty Ltd be appointed as joint and several receivers and managers (Receivers), without security, of the Property of the First Defendant, for the purposes of:

a.    identifying, collecting and securing the Property of the First Defendant held in any of its Relevant Capacities;

b.    ascertaining the amount of the Investor Funds received by the First Defendant;

c.    identifying any dealings with, payments of, distributions of or uses made of the Investor Funds by the First Defendant;

d.    identifying any Property purchased or acquired, directly or indirectly, with Investor Funds; and

e.    recovering Investor Funds.

5.    For the purpose of attaining the objectives for which the Receivers are appointed, the Receivers have the following powers:

a.    the powers set out in s 420(1) and (2)(a), (b), (e), (f), (g), (h), (j), (k), (n), (p), (q), (r), (t) and (u) of the Corporations Act; and

b.    the power to apply to the Court for directions or further orders.

6.    The powers in paragraph 5 above shall not extend to the sale of any Property of the First Defendant without prior leave of the Court.

11    The notes to those orders set out the following definitions for the purposes of the orders:

In these orders:

“ADPF” means the Advantage Diversified Property Fund;

“Corporations Act” means the Corporations Act 2001 (Cth) (Corporations Act);

“Investor Funds” means monies provided to the First Defendant in its capacity as responsible entity of the SMF;

“Property” means all real or personal property, assets or interests in property of any kind, within or outside Australia including choses in action and, by virtue of s 1323(2A) of the Corporations Act, any property held otherwise than as sole beneficial owner;

“Relevant Capacities”, in relation to the First Defendant, means its capacity as responsible entity of the SMF, its capacity as trustee for the ADPF, and its capacity as trustee for the Quantum PE Fund; and

“SMF” means the Shield Master Fund (ARSN 650 112 057).

12    The appointment of the Receivers was made in the context and on the basis of an investigation by the plaintiff, the Australian Securities and Investments Commission, into the conduct of Keystone, its officers and related entities.

13    By orders made 5 September 2024, the Receivers were appointed as voluntary administrators of Keystone. Keystone proceeded into liquidation on 2 December 2024.

14    On 7 November 2025, the Appointees filed the Interim Distribution Application, by which they sought judicial directions in respect of the proposed realisation of certain listed equities (Bell Potter Securities) owned by Keystone in its capacity as responsible entity of the SMF and the proposed interim distribution of the proceeds. The interlocutory process constituting that application was subsequently amended on 8 December 2025.

15    I dealt with the first part of that application on 19 December 2025: see Australian Securities and Investments Commission v Keystone Asset Management Ltd (receivers and managers appointed) (in liquidation) (No 3) [2025] FCA 1661. The balance of the application (that is, paragraphs 4 and 5 of the application) is listed for hearing on 18 February 2026. Ross Blakeley and Paul Harlond (the Falcon Liquidators), the liquidators of Falcon Capital Ltd (Falcon), have been appointed as contradictors to paragraphs 4 and 5 of the application.

16    The context for the Falcon Liquidators’ role as contradictors is explained in the Appointees’ submissions in relation to the Interim Distribution Application at [49] and following. In summary, Falcon submitted a proof of debt in the liquidation of Keystone claiming the amount of $99.63 million. In the covering letter, the Falcon Liquidators articulated the basis of the claim as follows:

(a)    Keystone is trustee of the CDPF;

(b)    as responsible entity of the First Guardian Master Fund (FGMF), Falcon holds units in the Australian Development Fund (ADF);

(c)    as trustee of the ADF, Falcon invested significant amounts in the CDPF, and Falcon’s books and records state the value of this investment as $99.63 million;

(d)    the CDPF and the ADF advanced funds for the purchase or development of a number of real properties (Project Properties) by special purpose vehicle companies;

(e)    a large proportion of the funds advanced by the CDPF and the ADF for the acquisition of the Project Properties were not spent on the acquisition or development of the Project Properties, and large amounts were advanced to Robert Filippini and entities associated with him (Filippini Assets);

(f)    Falcon in its capacities as trustee of the ADF and beneficiary of the CDPF may have equitable proprietary interests in the Project Property and Filippini Assets; and

(g)    Falcon, as a beneficiary of the CDPF, has a contingent claim for equitable compensation and/or other remedies against Keystone for breaches of its duties as trustee of the CDPF for the amount Falcon Capital invested in the CDPF, net of any redemptions, which it estimates as $99.63 million.

17    Correspondence has been exchanged between the solicitors for the Falcon Liquidators and the solicitors for the Receivers in relation to the Interim Distribution Application. This is annexed to the affidavit of Ms MacKay. In a letter dated 9 December 2025, the solicitors acting for the Falcon Liquidators stated at [7]:

7.    The statements made [by the Receivers] in the 5 November Letter that:

(a)    it is unlikely that there was any material co-mingling of SMF and CDPF property (paragraph 2); and

(b)    there can be a high degree of confidence that there was no intermingling between SMF and CDPF assets above amounts that would form a de minimis proportion of the SMF’s property (paragraph (9)

are not sufficient to satisfy our clients [i.e. the Falcon Liquidators] on those matters as they appear (on the basis of the limited information available to our clients) to be statements made:

(c)    based on assumptions about the accuracy of narrations provided for bank transactions (without underlying bank traces); and/or

(d)    without regard for the source of funds from which certain inflows were derived.

18    Shortly after that correspondence, on 11 December 2025, the Receivers requested leave to issue the three subpoenas that are the subject of the present set-aside application. The requests are in substantially the same form and include the following explanation as to the urgency of the application:

On 9 December 2025, our office received a letter from Mills Oakley who replaced [King & Wood Mallesons] as the solicitors for Ross Blakeley and Paul Harlond in their capacity as joint and several liquidators of Falcon Capital Limited. In their Letter, Mills Oakley oppose our clients’ interlocutory application dated 7 November 2025 which sought orders permitting an interim distribution to certain unitholders.

The basis of the objection centres on questions as to the mixing of funds between the Shield Master Fund, Australian Diversified Property Fund and the Chiodo Diversified Property Fund.

The documents requested by the subpoena go to the tracing of funds originating from the Chiodo Diversified Property Fund so they may be segregated from those originating from the other funds in question.

The subpoena is therefore sought on an urgent basis with an abridged period of service as our [clients] are unable to proceed with the interim distribution until these issues are resolved.

The records are also sought for the purpose of considering any potential claim in respect to the traceable proceeds of the CDPF.

19    In his affidavit dated 29 January 2026, filed in connection with the Interim Distribution Application, Mr Tracy stated at [128], [132] and [138]:

128.    We have confirmed our view that there was no material co-mingling of SMF and CDPF property, and therefore Falcon Capital as a potential CDPF trust creditor will not have recourse to the Bell Potter Proceeds.

…

132.    As such, the amount of inflows into the SMF that could potentially represent intermingled CDPF assets is $386,904, and I consider that our $12 million retention for contingencies (see paragraph 138 below) is sufficient to cover this possibility.

…

138.    In order to ensure that the retention of funds is on a conservative basis, and to manage the risk of unknown factors impacting on the costs and expenses or claims that arise in the matter, we propose to also retain a contingency amount of $12 million.

The application to partially set aside the subpoenas

20    It is common ground that the onus is on the Receivers to justify the subpoenas. It is convenient, therefore, to start with their submissions.

21    The Receivers’ first contention is that the bank statements sought by the subpoenas may be relevant to an issue raised by the Interim Distribution Application, namely the issue of whether there was intermingling of SMF and CDPF property. The Receivers rely on the correspondence passing between the solicitors for the Falcon Liquidators and the solicitors for the Receivers, in particular the letter dated 9 December 2025 from the Falcon Liquidators’ solicitors, which stated at [7] that the statements that had been made by the Receivers’ solicitors were not sufficient to satisfy the Falcon Liquidators (see above). The Receivers submit that the bank statements will shed light on this issue.

22    The Receivers’ second contention is that the bank statements sought by the subpoenas will assist the Receivers to perform their role, which includes identifying and securing the property of Keystone, including as trustee of certain funds. Counsel for the Receivers emphasised that this is not a standard commercial dispute, but a regulatory proceeding in which the Receivers have been appointed by the Court and have a duty to carry out certain functions. The Receivers rely on the evidence in Ms MacKay’s affidavit. As set out in Ms MacKay’s affidavit at [35]-[36], the Receivers consider that the bank accounts listed in the subpoenas may have received money from the CDPF (of which Keystone is the trustee). On this basis, the Receivers submit that the bank statements that are the subject of the subpoenas will assist them to perform their role by identifying funds of the CDPF that may have been misapplied by payment into those accounts.

23    In support of his application to partially set aside the subpoenas, Mr Chiodo refers to well-established principles regarding subpoenas. In particular, he relies on Wong v Sklavos [2014] FCAFC 120; 319 ALR 378 at [12] per Jacobson, White and Gleeson JJ. The Full Court there stated that “[t]he party issuing a subpoena bears the onus of demonstrating that the subpoena has a legitimate forensic purpose in relation to the issues in the proceedings”. Mr Chiodo also relies on Matheson Property Group Pty Ltd (Trustee) v Virgin Australia Holdings Limited (No 6) [2025] FCA 1522 at [8] per Kennett J and Seven Network (Operations) Ltd v Fairfax Media Publications Pty Ltd [2023] FCAFC 185; 418 ALR 284 at [37] per Wheelahan, Anderson and Jackman JJ.

24    Mr Chiodo submits that the subpoenas in issue do not satisfy that well-established test. Insofar as the Receivers contend that the bank statements may be relevant to an issue raised in the Interim Distribution Application, Mr Chiodo contends that, upon analysis, that is not the case. Insofar as the Receivers seek to support the subpoenas on the basis that the bank statements will assist them to perform their role as Court-appointed receivers of the property of Keystone, Mr Chiodo submits that there is no authority to support such a basis and that it is outside the scope of the principles discussed in the cases referred to above.

25    I will now consider each of the Receivers’ contentions in turn.

26    In relation to the Receivers’ first contention, I accept that, in the context of the Interim Distribution Application, there is an issue between the Receivers and the Falcon Liquidators as to whether there was intermingling of CDPF assets with those of the SMF. That such an issue exists is established by the correspondence passing between the Receivers’ solicitors and the Falcon Liquidators’ solicitors referred to above. However, as a matter of logic, I cannot see how the bank statements sought by the subpoenas are able to shed any light on whether or not such intermingling occurred (or the extent of any such intermingling). The intermingling that is in issue involves payments going from the CDPF to the SMF. However, the relevant bank accounts listed in the subpoenas are not SMF bank accounts; they are accounts of Mr Chiodo, Chiodo Corporation, certain family members of Mr Chiodo, etc. In order for the funds to have made their way to the SMF there would need to have been a further transaction or transactions. But there is no suggestion that any funds transferred from the CDPF to the accounts listed in the subpoenas were subsequently transferred to the SMF. For these reasons, I do not see how the bank statements could shed any light on whether there was intermingling of CDPF assets with those of the SMF. I note that Ms MacKay’s affidavit does not explain how the bank statements would or could be relevant to determining whether there was intermingling of CDPF assets with those of the SMF.

27    I turn, then, to then Receivers’ second contention.

28    Although the CDPF is not expressly referred to in the 28 August 2024 orders, this may have been because the CDPF had not been identified as a trust of which Keystone was the trustee at the time those orders were made: see Ms MacKay’s 5 February 2026 affidavit at [9]. However, by reason of the definition of “Property” in those orders and the fact that Keystone is the trustee of the CDPF, I consider that the Receivers were appointed in relation to the CDPF by the orders of 27 August 2024. For the sake of clarity, I consider it appropriate to amend the definition of “Relevant Capacities” in the 27 August 2024 orders to refer also to Keystone in its capacity as trustee for the CDPF, and to insert a definition of the CDPF.

29    In my view, in circumstances where a receiver has been appointed by the Court for the purposes of identifying and securing property of a company, a subpoena may be issued to obtain documents that will assist the receiver to perform those functions. In my view, the power of the Court to issue a subpoena in such circumstances is incidental to the Court’s power to appoint the receiver in the first place. If the receiver cannot obtain access to relevant documents held by third parties, it may be difficult for the receiver to perform the role to which they have been appointed and for the purposes of the appointment to be achieved.

30    In my opinion, the case law referred to by counsel for Mr Chiodo is directed to a very different context, namely inter partes litigation where there are pleadings which raise issues as between the parties. I do not consider the statements of principle in those cases to foreclose the possibility of utilising a subpoena in an appropriate case to support the work of a Court-appointed receiver.

31    Here, the Receivers have been appointed by the Court for the purposes set out in paragraph 4 of the orders dated 27 August 2024 (set out above). The evidence establishes that the bank statements sought by the subpoenas may well assist the Receivers in carrying out their functions of identifying and getting in the property of Keystone, specifically the assets of the CDPF. As set out in Ms MacKay’s affidavit at [35], the bank accounts listed in the subpoenas are accounts “which the Receivers consider may have received CDPF funds either directly or indirectly”. The material referred to in Ms MacKay’s affidavit provides a sound basis for the Receivers to hold that view. Thus, the bank statements may well disclose the misapplication of funds of the CDPF.

32    For these reasons, I consider that there is a proper basis for the issue of the subpoenas.

33    It follows that the application to partially set aside the subpoenas is to be dismissed.

34    I will reserve costs. If either party seeks a different costs order at this stage of the proceeding, this can be raised in advance of the next case management hearing and the matter can be dealt with at that case management hearing.

Associate:

Dated:    16 February 2026