Frigger v Trenfield (No 2)

Case [2019] FCA 2009

FEDERAL COURT OF AUSTRALIA

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

File number: WAD 141 of 2019
Judge: JACKSON J
Date of judgment: 29 November 2019
Catchwords:

PRACTICE AND PROCEDURE - application for summary judgment - beneficial ownership of funds and real property - when property will be subject to a trust - evidentiary uncertainties - application dismissed

DISCOVERY - application for particular discovery under r 20.21 of the Federal Court Rules 2011 (Cth) by trustees in bankruptcy - source and ownership of funds in bank accounts held by the applicants - discovery sought in order to respond to orders sought by applicant - discovery not for collateral purpose of furthering respondents' investigations - no abuse of process - orders granted
Legislation:

Bankruptcy Act 1966 (Cth) s 19

Federal Court of Australia Act 1976 (Cth) ss 31A, 37M

Superannuation Industry (Supervision) Act 1993 (Cth)

Federal Court Rules 2011 (Cth) rr 1.34, 20.11, 20.13, 20.14, 20.15, 20.21, 26.01
Cases cited:

Australian Securities and Investments Commission v Cassimatis [2013] FCA 641; (2013) 220 FCR 256

Blakeley v National Australia Bank [2018] FCA 796

Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd (No 2) [2011] FCA 1396

Dennis v Chambers Investment Planners [2012] FCA 63; (2012) 201 FCR 321

Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87

Frigger v Trenfield [2019] FCA 1746

Jefferson Ford Pty Ltd v Ford Motor Company of Australia Ltd [2008] FCAFC 60; (2008) 167 FCR 372

Quach v Commissioner of Taxation [2019] FCA 1729

Spencer v Commonwealth of Australia [2010] HCA 28; (2010) 241 CLR 118

Three Rivers District Council v Bank of England (No 3) [2003] 2 AC 1
Date of hearing: 20 September 2019
Registry: Western Australia
Division: General Division
National Practice Area: Commercial and Corporations
Sub-area: General and Personal Insolvency
Category: Catchwords
Number of paragraphs: 93
Counsel for the Applicants: The applicants appeared in person
Counsel for the Respondents: Mr SD Majteles
Solicitor for the Respondents: Carles Solicitors

ORDERS

WAD 141 of 2019
BETWEEN:

ANGELA CECILIA THERESA FRIGGER

First Applicant

HARTMUT HUBERT JOSEF FRIGGER

Second Applicant
AND:

KELLY-ANNE TRENFIELD

First Respondent

PAUL ANTHONY ALLEN

Second Respondent

JUDGE:

JACKSON J

DATE OF ORDER:

29 NOVEMBER 2019

THE COURT ORDERS THAT:

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

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

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

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AGLC
Frigger v Trenfield (No 2) [2019] FCA 2009
Case
[2019] FCA 2009
Decision Date

CaseChat Overview and Summary

The applicants, Mr and Mrs Frigger, sought summary judgment in relation to claims for orders that certain real property and funds held in bank accounts were assets of the Frigger Super Fund (FSF). The respondents, the trustees in bankruptcy of the Friggers, opposed the application and cross-applied for particular discovery. The applicants also sought interlocutory injunctions to restrain the respondents from taking certain steps in relation to the FSF and its assets. The court considered the evidence and the relevant legal principles, including the requirements for summary judgment, the rules of discovery, and the principles concerning trusts and beneficial ownership. The court found that the evidence did not establish that the accounts were assets of the FSF at the time of the Friggers' bankruptcy, and that the respondents had a reasonable prospect of defending the claim. The court also found that the discovery application was not for a collateral purpose and was not an abuse of process. The court granted the discovery application, ordered the applicants to provide particular discovery of documents, and dismissed the application for summary judgment and interlocutory injunctions. The parties were granted liberty to apply for an extension of time to comply with the discovery orders, and costs were reserved.

Orders

Orders of the court

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(ii) settlement statements;

(iii) declarations of trust;

(iv) insurance policies;

(v) financial accounts;

(vi) tax assessments; and

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

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

(i) buy and sell notes;

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

(iii) correspondence;

(iv) dividend statements;

(v) invoices;

(vi) receipts;

(vii) financial accounts or statements;

(viii) off-market transfers;

(ix) security registration documents; and

(x) tax lodgements and assessments.

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

4. Costs reserved.

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

Background

Background to the litigation

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Evidence

Evidence Before The Court

The applicants have drawn the court's attention to r 20.13(3) of the Federal Court Rules, which relevantly provides that an application for discovery may not be made until all respondents have filed an affidavit in response to the affidavit that was filed in support of the originating application. The respondents seem to accept that the rule applies to their application, and sought a dispensation from it under r 1.34. However the placement and context of r 20.13(3) in the overall structure of Division 20.2 of the Rules, concerning discovery, suggests that this only applies to the applications that are authorised by r 20.13(1), being the applications for standard or non-standard and more extensive discovery that are contemplated in r 20.14 and r 20.15. Rule 20.21 authorises a party to make an application for particular discovery separately to the authorisation in r 20.13(1). So I doubt that r 20.13(3) governs an application under r 20.21. Even if it does, in the course of resisting Mr and Mrs Frigger's applications for summary judgment and injunctions the respondents have filed affidavits that do, in substance, respond to the affidavit accompanying the originating application. It is true that the gist of the affidavits in response is to say that Ms Trenfield does not know the position, rather than to firmly refute Mrs Frigger's first affidavit, but in the circumstances I will outline I accept that it is not possible for the respondents to go further at this stage. I will proceed on the basis that in the present case r 20.13(3) does not confine the discretion conferred by r 20.21.Assessment of evidence that BOQ1 and BOQ2 were assets of the FSF I will now turn to the first of the substantive questions I identified at the outset: the extent to which the evidence that the Friggers have adduced establishes that BOQ1 and BOQ2 were assets of the FSF at the time of commencement of the bankruptcy. As I have said, that question will largely determine both the Friggers' summary judgment application, and the respondents' discovery application in respect of those accounts. The following summary of the affidavits is given in order to answer that question for the purposes of the interlocutory applications. It does not include firm findings by me about any of the issues. Unless I determine that the respondents have no reasonable prospect of defending the Friggers' claim that the accounts are assets of the FSF, such findings must await trial.The FSF I dealt with the history of the FSF in Frigger v Trenfield (No 1). In summary:(1)It was established by way of trust deed on 1 July 1997. The original trustee was Serenity Holdings Pty Ltd, which later changed its name to Computer Accounting and Tax Pty Ltd (CAT).(2)Mr and Mrs Frigger became the trustees of the FSF on 1 January 2008 and, at least by July 2010, were the sole trustees of the fund.(3)Mr and Mrs Frigger became bankrupt on 20 July 2018. By July 2018 their two adult children had also been appointed trustees. In that month, all four individuals were replaced as trustees by the current trustee, H & A Frigger Pty Ltd.

Decision

Reasons for decision

Before dealing with the evidence, I will mention some other basic principles, concerning summary judgment, when property will be subject to a trust, and particular discovery.Principles - summary judgment The principles to be applied in connection with summary judgment under s 31A(1) of the Federal Court Act and r 26.01(1)(e) of the Federal Court Rules 2011 (Cth) are well established. I summarised them in Quach v Commissioner of Taxation [2019] FCA 1729 at [10]‑[12] and will not repeat that summary here. It is necessary to add, as relevant to this application, that where it is a case of summary judgment based on evidence, the power to award summary judgment should be exercised with great care and only where it is clear that there is no real question to be tried: Spencer v Commonwealth of Australia [2010] HCA 28; (2010) 241 CLR 118 at [24], quoting from Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87 at 99. Where that requires consideration of apparently complex questions of fact, it is unlikely to be appropriate to resolve those questions at a summary judgment stage by conducting 'a mini-trial' on the documents, without discovery and without oral evidence. That is not the object of the rule. It is designed to deal with cases that are not fit for trial at all: Three Rivers District Council v Bank of England (No 3) [2003] 2 AC 1 at 261 [95], endorsed in Spencer at [26]. On the other hand, an assertion by a party that there is a real question to be decided must be examined with a critical eye: Jefferson Ford Pty Ltd v Ford Motor Company of Australia Ltd [2008] FCAFC 60; (2008) 167 FCR 372 at [23]. I also need to say something more about the onus of proof. The applicants submit that the authorities show that once an applicant establishes a prima facie case, the onus shifts to the respondent. They submit that the respondents have not discharged that onus here. I accept that there are cases which may be read as supporting the submission as to the shifting onus. Reeves J surveyed them in Australian Securities and Investments Commission v Cassimatis [2013] FCA 641; (2013) 220 FCR 256 at [51]‑[67]. As his Honour's analysis establishes, the source of that statement is usually said to be the judgment of Gordon J in Jefferson Ford at [127]. That statement has been endorsed and relied on in numerous subsequent decisions. However it is important to read it in full (citations removed):Thirdly, each case must be considered separately. No particular hard and fast rules can be set down, only general principles. One principle is that the moving party bears the onus of persuading the court that the opponent has no reasonable prospect of success. As noted earlier, however, s 31A has lessened the standard that must be met. In that regard, it must be emphasised that once a moving party has established a prima facie case that the opponent has no reasonable prospect of success, the opposing party must respond by pointing to specific factual or evidentiary disputes that make a trial necessary; general or non-particularised denials will be insufficient to defeat the motion. In other words, it is inappropriate in defence of a claim for judgment under s 31A of the Federal Court Act to seek to defend by merely putting a claimant to formal proof. This is not a new concept. It finds earlier reflection in ss 190(4) and 191 of the Evidence Act 1995 (Cth) and O 33, 34 and 34B of the Federal Court Rules.

Ratio Decidendi

Legal Principle Established

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