Frigger v Trenfield

JUDGE: JACKSON J DATE OF ORDER: 24 OCTOBER 2019

1. The applicants' application on an interlocutory basis for the orders sought at paragraphs 1, 2, 3, 4 and 7 of the amended interlocutory application filed 18 September 2019 is dismissed.
2. Costs reserved. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

JACKSON J: 1 Mr and Mrs Frigger are bankrupts. They have applied for orders compelling the first respondent, Kelly-Anne Trenfield, to retract a letter that she sent to Commonwealth Securities Limited (CommSec) on 28 August 2019. Ms Trenfield is one of the trustees of the bankrupt estates (Trustees). In the letter, she claimed that the shares in a portfolio administered by CommSec were property divisible among the creditors of the bankrupts. The Friggers also seek an order that Ms Trenfield send a letter to ASX Settlement Pty Ltd with the effect of changing the holder status of the Clearing House Electronic Sub-register System holder identification number (HIN) associated with the CommSec portfolio so that shares can be traded on the Australian Securities Exchange. They also seek (on an interlocutory basis) an order that Ms Trenfield make good any loss to the fund. 2 The interlocutory application is in the name of Mrs Frigger only, but it is plainly brought also on behalf of Mr Frigger, who is an applicant in the proceedings and participated in the hearing, so I will treat it as having been made on behalf of both of them. Mr and Mrs Frigger claim that the Trustees' letter to CommSec is wrong, because the portfolio is an asset of a self-managed superannuation fund known as the Frigger Super Fund (FSF), of which they are members. They say the shares are not property that is divisible among the creditors of their bankrupt estates. 3 Mr and Mrs Frigger said that the matter is urgent. They filed five affidavits of Mrs Frigger in support of the orders they seek and also relied on other affidavits filed in these proceedings. The urgency was said to arise because the Trustees' letter led to a lock on trading in the shares, when Mr Frigger had previously been trading shares in the portfolio actively. The Friggers seem to assert that this has caused, or will cause them to suffer losses - it is not clear which. 4 However despite the alleged urgency, when my chambers listed the application for judgment on 1 October 2019, Mrs Frigger asked me to delay giving judgment while she awaited an indication from the Australian Financial Complaints Authority about the progress of a complaint she had lodged with the authority about Ms Trenfield's conduct. The respondents did not oppose what was in effect an adjournment of the matter until after 18 October 2019. I therefore deferred delivering judgment. But at a mention hearing held on 23 October 2019 Mrs Frigger indicated she no longer wished judgment to be deferred, so judgment has been delivered on 24 October 2019. Principles - interlocutory injunctions 5 The interlocutory application seeks orders compelling Ms Trenfield to do certain things. It is in effect an application for mandatory interlocutory injunctions. As I will soon outline, the Friggers invoke the power of the court under s 90-15 of Schedule 2 to the Bankruptcy Act 1966 (Cth) (the Insolvency Practice Schedule (Bankruptcy)) to make 'such orders as it thinks fit'. By analogy with the established approach to statutory injunction powers, I will proceed on the basis that, while the equitable principles governing interlocutory injunctions do not constrain the court, they represent a sound basis for undertaking a preliminary assessment, although the court should review that assessment against the statutory context: see Australian Securities and Investments Commission v Triton Underwriting Insurance Agency [2003] NSWSC 1145; (2003) 48 ACSR 249 at [25] (Barrett J). 6 The principles applicable to interlocutory injunctions are well established. (1) If interlocutory relief is to be sought, it should be sought promptly and any delay in applying for injunctive relief should be adequately explained: Baker & McAuliffe Holdings Pty Ltd t/as JSB Lighting v Carey [2018] FCA 1972 at [62]. (2) Where an applicant seeks interlocutory relief, it is necessary to demonstrate that: (a) there is a serious question to be tried as to the applicant's entitlement to relief; (b) the applicant is likely to suffer injury for which damages will not be an adequate remedy; and (c) the balance of convenience favours the granting of an interlocutory injunction. Australian Broadcasting Corporation v O'Neill [2006] HCA 46; (2006) 227 CLR 57 at [19] (Gleeson CJ and Crennan J). (3) The applicant must show a sufficient likelihood of success to justify in the circumstances the preservation of the status quo pending the trial: ABC v O'Neill at [65] (Gummow and Hayne JJ); Twinside Pty Ltd v Venetian Nominees Pty Ltd [2008] WASC 110 at [9] (Beech J). (4) The likelihood of success required is dependent upon the nature of the right being asserted and the practical consequences that are likely to flow if the injunction is granted: ABC v O'Neill at [71]; Twinside at [9]; Apotex Pty Ltd v Cipla Limited [2017] FCA 1627 at [40] (Beach J). (5) The resolution of the question of where the balance of convenience and justice lies requires the court to exercise a discretion: Samsung Electronics Co Limited v Apple Inc [2011] FCAFC 156; (2011) 217 FCR 238 at [65] (Dowsett, Foster and Yates JJ). The court will weigh up the injustice which might be suffered by the respondent if the injunction is granted and the applicant later fails at trial, against the injustice which might be suffered by the applicant if the injunction is not granted and the applicant later succeeds at trial: Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618 at 623; Twinside at [11]. (6) There are questions as to whether the requirement that damages are not an adequate remedy is an independent requirement or whether it is relevant to the broader question of the balance of convenience: see e.g. National Australia Bank Ltd v Joyce [2012] WASC 224 at [38]-[41] (Edelman J). In any event, the test may be expressed as whether the applicant would, in all material respects, be in as good a position if they were confined to a remedy of damages as they would be if an injunction were granted: Samsung Electronics at [62]. (7) The question of whether there is a serious question or a prima facie case should not be considered in isolation from the balance of convenience. The apparent strength of the parties' substantive cases will often be an important consideration to be weighed in the balance: Samsung Electronics at [67]. As the apparent strength of the applicant's case diminishes, the balance of convenience moves against the making of an order: Glenwood Management Group Pty Ltd v Mayo [1991] 2 VR 49 at 54-55; Twinside at [11]. (8) Mandatory interlocutory injunctions are uncommon, partly because the usual purpose of the interlocutory injunction is to preserve the status quo, which is inapplicable to mandatory injunctions. Mandatory injunctions require a party to take some positive step or to undo what has been done in the past: Cash Converters Pty Ltd v Hila Pty Ltd (1993) 9 WAR 471 at 483 (Kennedy J). (9) The features which justify describing an injunction as mandatory will usually also have the consequence of creating a greater risk of injustice if it is granted rather than withheld at the interlocutory stage, unless the court feels a high degree of assurance that the applicant would be able to establish the relevant right at a trial: Films Rover International Ltd v Cannon Film Sales Ltd [1987] 1 WLR 670 at 680-681 (Hoffmann J); see also Cash Converters at 483. (10) However these matters concerning characteristics of mandatory injunctions are best understood as guidelines rather than independent principles: Films Rover at 680-681. Ultimately the question is as to the balance of the risk of injustice. In considering that balance the court must take into account the nature and consequences of the particular injunction sought: Twinside at [12].

Principles - Insolvency Practice Schedule (Bankruptcy) and property of bankrupt estate 7 The Friggers have brought their application under s 90-15 of the Insolvency Practice Schedule (Bankruptcy). That section is as follows: 90-15 Court may make orders in relation to estate administration Court may make orders (1) The Court may make such orders as it thinks fit in relation to the administration of a regulated debtor's estate. Orders on own initiative or on application (2) The Court may exercise the power under subsection (1): (a) on its own initiative, during proceedings before the Court; or (b) on application under section 90-20. Examples of orders that may be made (3) Without limiting subsection (1), those orders may include any one or more of the following: (a) an order determining any question arising in the administration of the estate; (b) an order that a person cease to be the trustee of the estate; (c) an order that another person be appointed as the trustee of the estate; (d) an order in relation to the costs of an action (including court action) taken by the trustee of the estate or another person in relation to the administration of the estate; (e) an order in relation to any loss that the estate has sustained because of a breach of duty by the trustee; (f) an order in relation to remuneration, including an order requiring a person to repay to the estate of a regulated debtor, or the creditors of a regulated debtor, remuneration paid to the person as trustee. Matters that may be taken into account (4) Without limiting the matters which the Court may take into account when making orders, the Court may take into account: (a) whether the trustee has faithfully performed, or is faithfully performing, the trustee's duties; and (b) whether an action or failure to act by the trustee is in compliance with this Act and the Insolvency Practice Rules; and (c) whether an action or failure to act by the trustee is in compliance with an order of the Court; and (d) whether the regulated debtor's estate or any person has suffered, or is likely to suffer, loss or damage because of an action or failure to act by the trustee; and (e) the seriousness of the consequences of any action or failure to act by the trustee, including the effect of that action or failure to act on public confidence in registered trustees as a group. Costs orders (5) Without limiting subsection (1), an order mentioned in paragraph (3)(d) in relation to the costs of an action may include an order that: (a) the trustee or another person is personally liable for some or all of those costs; and (b) the trustee or another person is not entitled to be reimbursed by the regulated debtor's estate or creditors in relation to some or all of those costs. Orders to make good loss sustained because of a breach of duty (6) Without limiting subsection (1), an order mentioned in paragraph (3)(e) in relation to a loss may include an order that: (a) the trustee is personally liable to make good some or all of the loss; and (b) the trustee is not entitled to be reimbursed by the regulated debtor's estate or creditors in relation to the amount made good. Section does not limit Court's powers (7) This section does not limit the Court's powers under any other provision of this Act, or under any other law. 8 Section 90-20 relevantly provides that a person with a financial interest in the administration of the estate of the regulated debtor, that is, the estate of the bankrupt, can apply for an order under s 90-15. 9 Under these provisions, the Friggers seek final relief in the same terms as their interlocutory application. They also by way of final relief seek an order under s 90-15(3)(b) that Ms Trenfield cease to be a trustee of their bankrupt estates. 10 It has been held that the power under s 90-15 of the similarly worded Insolvency Practice Schedule (Corporations) goes beyond the power to give directions to insolvency administrators and accommodates the determination of substantive rights: Re Hawden Property Group Pty Ltd (in liq) [2018] NSWSC 481; (2018) 125 ACSR 355 at [8] (Gleeson JA); see also Smith, in the matter of Buddy Management Pty Ltd (in liq) v Buddy Management Pty Ltd (in liq) [2019] FCA 566 at [40] (Gleeson J). 11 In Booth v Offerman as trustee of the bankrupt estate of Geoffrey David Booth [2019] FCA 5 at [4], Robertson J observed that the presently relevant jurisdiction in s 90-15 of the Insolvency Practice Schedule (Bankruptcy) used to be found in s 178 of the Bankruptcy Act. That was the provision permitting the bankrupt, a creditor or any other person affected by an act, omission or decision of the trustee to apply to the court, and the court to make such order in the matter as it thinks just and equitable. 12 Pursuant to the definition in s 5-30 of a 'financial interest', it is clear that Mr and Mrs Frigger as the bankrupts have standing under s 90-20 to apply. There is another interested party, namely the current trustee of the superannuation fund, H & A Frigger Pty Ltd. The Friggers have applied to add that company as an applicant, but there is a difficulty with that as Mrs Frigger has deposed that the company will not be able to obtain legal representation. If so, it will not be able to proceed in the application unless the court exercises its power under r 1.34 of the Federal Court Rules 2011 (Cth) to dispense with the requirement in r 4.01(2) that the company only proceed by a lawyer. The Friggers are likely to apply for that dispensation, but the parties agreed that I could deal with the application for interlocutory injunctions without H & A Frigger Pty Ltd being joined. As the question of legal representation is potentially relevant to the joinder of that company, I have not yet determined whether it should be an applicant to the proceedings. 13 In Booth v Offerman at [5], Robertson J said: For present purposes it is not necessary to compare the new and old bases of the Court's jurisdiction. It does not appear that any change was intended from the position described by Deane J in Re Tyndall; ex parte Official Receiver [1977] FCA 15; 17 ALR 182 at 186-187 to the effect that there is conferred upon the Court the widest possible discretion as to the appropriate order which should be made in the particular case and that the [Court] was empowered and obliged to make such order in the matter as it thinks just and equitable. Deane J rejected the approach that the Court was only empowered to interfere with the trustee's act, omission or decision if it was of the view that the trustee had acted absurdly or unreasonably or in bad faith. 14 In my view, in the circumstances of the present case, none of this statutory context requires me to modify the established approach to interlocutory injunctions which I have set out above. The further the court strays from the guidance provided by the equitable rules, the less principled any exercise of power is likely to be: Australian Securities and Investments Commission v Linchpin Capital Group Ltd [2018] FCA 1104 at [79] (Derrington J). 15 The basis of the present application is that the Trustees have prevented trading in an asset which is not an asset of the bankrupt estate. That falls to be considered by reference to s 116(1) of the Bankruptcy Act, which relevantly provides that: Subject to this Act: (a) all property that belonged to, or was vested in, a bankrupt at the commencement of the bankruptcy, or has been acquired or is acquired by him or her, or has devolved or devolves on him or her, after the commencement of the bankruptcy and before his or her discharge … is property divisible amongst the creditors of the bankrupt. 16 However s 116(2)(a) provides that s 116(1) does not extend to 'property held by the bankrupt in trust for another person'. It is also relevant to note that, subject to certain exceptions, s 116(2)(d)(iii)(A) exempts from the operation of s 116(1) the interest of the bankrupt in a regulated superannuation fund (within the meaning of the Superannuation Industry (Supervision) Act 1993 (Cth)). 17 So to succeed in their application for final relief, the Friggers will have to establish that, at the commencement of their bankruptcy on 20 July 2018, the shares in the portfolio either did not belong to or were not vested in them, or if they were, they were held on trust for another person. It seems that shares have been traded after the date of the bankruptcy. So it will also be necessary for the Friggers to establish the same matters in relation to any securities acquired after that date. 18 Here, the Friggers claim that all of the securities were held on trust for another person because they were held subject to the trusts of the FSF. To establish that, in the absence of evidence of an express declaration of trust, it is essential that there be proof of an intention to create a trust, with certainty of subject matter and object, certainty as to the trustee and certainty of the personal obligation annexed to the property to hold it on the trusts alleged: see La Housse v Counsel [2008] WASCA 207 at [37] (Pullin JA, Wheeler and Buss JJA agreeing). The subjective intentions of the settlors are irrelevant; what is required is evidence that in all the circumstances the necessary intention was manifested objectively: see Byrnes v Kendle [2011] HCA 26; (2011) 243 CLR 253 at [46]-[66] (Gummow and Hayne JJ, French CJ agreeing at [17]) and [113]-[115] (Heydon and Crennan JJ).

The FSF 19 On 6 March 2019 Mrs Frigger swore an affidavit which was filed in support of the originating application. It annexes the trust deed for the FSF, which was established on 1 July 1997. It had a corporate trustee and its original members were Mr and Mrs Frigger. By deed of amendment dated 1 January 2008, they were each appointed as a trustee of the fund. Although it is not clear from the evidence, it appears that the original corporate trustee, Computer Accounting and Tax Pty Ltd, was removed as trustee, either at the same time as the Friggers were appointed, or in July 2010. 20 By a further deed of amendment dated 1 July 2018, Mr and Mrs Frigger (and their two children) were removed as trustees of the fund and replaced with H & A Frigger Pty Ltd. Mrs Frigger's first affidavit says that she and her husband ceased to be trustees '[s]ince 21 July 2018' and she says in a written submission that the removal of the Friggers as trustees was 'backdated to 1 July 2018 for practical purposes'. The evidence does not reveal exactly when and how the children were appointed as trustees, although there is a schedule of 'associates' of the fund suggesting that this occurred on 6 July 2016.

The CommSec portfolio 21 In her first affidavit sworn in the proceedings, Mrs Frigger deposed that since the commencement of the FSF on 1 July 1997, she and Mr Frigger took 'all steps to ensure that all our assets would be held in FSF (other than our principal residence)' to obtain certain tax benefits. She said that to achieve that 'goal and plan', in or about 1997 they 'transferred a share portfolio held in our personal names to the FSF for approximately $650,000'. But she no longer has evidence of those transfers. She says that from the inception of the FSF she and her husband made 'all investment decisions. My husband manages a share portfolio held with Commsec.' In an affidavit sworn 6 September 2019 Mrs Frigger says that 'the portfolio has been held by [CommSec] as our on-line stockbroker'. 22 Ms Trenfield has produced a copy of the application form that opened the account with CommSec. It was opened in early 1999. The form shows Mr and Mrs Frigger as the applicants. It does not mention the FSF. There is a box for notification of an intention to operate the account on behalf of a superannuation fund but that box is empty on the form. It appears that Computer Accounting and Tax Pty Ltd (then named Serenity Holdings Pty Ltd) was trustee of the FSF at the time. 23 There is also a 'Standard Transfer Form For Non-market Transactions' for securities in Fletcher Challenge Ltd in evidence. It is dated 28 July 1999. It shows a transfer from Mr and Mrs Frigger to Serenity Holdings, which was then trustee of the FSF. It shows that Serenity Holdings acquired the shares in that capacity. The HIN for the trustee is different to the HIN now associated with the CommSec portfolio. The HIN shown for Mr and Mrs Frigger as vendors of the shares is the one currently identified with the CommSec portfolio. 24 On 10 April 2014 an entity called 'Frigger Super Fund' registered a security interest over the portfolio under the Personal Property Securities Act 2009 (Cth). Mr and Mrs Frigger were named as grantors, that is, the parties giving the security interest. The search of the Personal Property Securities Register that is in evidence does not reveal the nature of the security interest that was registered. From the bar table Mrs Frigger said it was 'the beneficial ownership' of the FSF. But there is no evidence of that, and it is unclear how the beneficial interest of beneficiaries of a superannuation trust can be 'an interest in personal property provided for by a transaction that, in substance, secures payment or performance of an obligation', as required by s 12 of the Personal Property Securities Act in order for it to be a security interest. 25 Dividends from the CommSec portfolio are said to have been paid into various bank accounts that are alleged to be trust assets. A copy of an annual statement for the portfolio for the 2017-2018 financial year is annexed. It bears what appears to be an automatically generated note at the bottom of each page: 'Generated 20 August 2018'. Under the notation of 'Total Portfolio Value' the words 'Frigger Super Fund' appear, without any heading or label. The statement shows securities of a value of approximately $2.5 million, with total buys of approximately $1.4 million and total sells of approximately $285,000 for the year. A large number of trades for the year are listed. There is a statement in another affidavit of Mrs Frigger that the portfolio is worth $3.4 million. 26 Ms Trenfield has obtained what appears to be a statement for the same portfolio and the same year from the auditor of the FSF. While the automatically generated date notation is indistinct on the copy she has produced, it appears to be the same, that is: 'Generated 20 August 2018'. Apart from a few pages which seem to be missing from the version annexed to Mrs Frigger's affidavit, the statement is otherwise identical, save that the notation 'Frigger Super Fund' is missing. In a subsequent affidavit Mrs Frigger says that '[t]he reason why I added the words "Frigger Super Fund" to the statement from Commonwealth Securities Ltd is because the regulator of that fund, ATO, requires me to identify all documents that relate to the Fund'. 27 On 16 October 2018 H & A Frigger Pty Ltd issued a notice to Ms Trenfield which appeared to claim losses at a rate of $377.80 per day, connected to the inability to trade in certain securities that are held in the portfolio. It also foreshadowed a claim for loss of opportunity to earn a capital gain. There was no lock on the share portfolio at that time, and the notice was issued in connection with a restriction on an account with the Bank of Queensland. The connection between that account and losses in respect of the CommSec portfolio is not clear. 28 There is also a self-managed superannuation fund annual return for the year 2018 in evidence which shows 'listed shares' of the same value as shown in the portfolio annual statement as an asset of the trust. The return bears the date 18 July 2018, a couple of days before the bankruptcy. 29 The affidavit also annexes a balance sheet for 'H & A Frigger atf Frigger Super Fund' as of June 2018, which shows the CommSec portfolio as an asset. Mrs Frigger said from the bar table that she prepared the accounts for the FSF, and that is supported by evidence in her affidavit to the effect that she is a qualified accountant and managed all accounting records for the FSF and prepared financial statements. 30 Another affidavit of Mrs Frigger provides some evidence about CommSec's role. She says it is not a share registry and has no concern for the beneficial ownership of any shares in the portfolio. She goes on to say that the share registry for each company in which securities are held does record 'the legal owner's name and whether the share is held beneficially'. She says that at the time of the purchase of each security in the portfolio she or her husband completed a form showing FSF as the beneficial owner and giving the FSF's tax file number. The affidavit provides one example of a tax file number notification she says was provided to a share registry in relation to listed shares in a company named as 'Tolga' (in the CommSec annual portfolio statement it is actually called 'Talga Resources FPO'). That form shows 'Frigger Super Fund' as the subject of the notification. There is also evidence that a different share registry has the tax file number for the fund on file. 31 Mrs Frigger says in an affidavit that after she and Mr Frigger became trustees, they used their 'trading contract with Commsec to trade shares for FSF because the registered holder was my husband and me. Beneficial ownership was recorded with the listed company's share registry.' However despite that evidence, the Friggers have not produced any holding statement for any securities held in the portfolio. 32 In an affidavit sworn on 6 September 2019, Mrs Frigger says that since the sequestration order the Friggers have held the portfolio 'as bare trustees of the FSF'. It says that in order 'to avoid unnecessary losses by forced sales, my husband has actively traded the portfolio and purchased new shares in the new trustee's name'. However that evidence is undermined by CommSec buy confirmations annexed to another affidavit sworn that day in relation to certain securities, which show that the account is in the name of Mr and Mrs Frigger, with no reference to H & A Frigger Pty Ltd. The buy confirmations are dated 25 and 26 July 2018 and 17 January 2019, after the sequestration order and after the apparent appointment of the company as trustee. 33 Mrs Frigger's first affidavit sworn on 6 September 2019 says that Mr Frigger is active on the stock exchange for at least four hours a day. Ms Trenfield has produced a 'Client Historical Holdings Report' obtained from CommSec which shows a significant amount of trading on the account since the date of the sequestration order.

The Trustees' letter to CommSec 34 On 28 August 2019, Ms Trenfield sent a letter to CommSec advising of the Friggers' bankruptcy and saying that she understood that the Friggers may hold the CommSec portfolio in their personal capacity. The letter asserted that 'these shareholdings' vested in the Trustees and were considered property divisible among the bankrupt estate's creditors. It also asserted that after-acquired shares vested in the bankrupt estate. It requested CommSec to suspend all share transfers and to transfer 'all shareholding' [sic] to a new portfolio in the name of the Friggers as bankrupts for Ms Trenfield's control. 35 There is evidence that since Ms Trenfield sent the letter to CommSec the Friggers have been locked out of the online trading facility that CommSec offers. Also, the day after the date of the letter, the Friggers received notice from the Australian Securities Exchange that the holder status of the HIN associated with the portfolio had been locked, with the annotation 'bankrupt'. 36 Mrs Frigger's first affidavit in support of the interlocutory application says 'My husband is preparing a spreadsheet which will show share trades that Trenfield's conduct has [sic] prevented for the purposes of assessing losses'. However no spreadsheet has been produced and it is not clear exactly how it is said losses arise. There is, for example, no evidence that any of the shares in the CommSec portfolio have fallen in value since the lock came into effect.

Analysis 37 On the principles I have set out above, I proceed on the basis that the Friggers have standing to apply for the orders they seek under s 90-15 of the Insolvency Practice Schedule (Bankruptcy) and that that provision gives the court the power, and a wide discretion, to make such orders. Prima facie, if Ms Trenfield has asserted that shares have vested in the Trustees which in truth were held (and acquired) by the Friggers as trustee for another, and that assertion has caused or will cause the Friggers or the trustee of the FSF to suffer loss and damage, that would provide a basis to exercise the discretion to make orders remedying that situation. 38 I accept that there is a serious question to be tried that the shares in the CommSec portfolio are held by the Friggers on trust for another and so did not vest in the Trustees on the making of the sequestration order or, to the extent that they were purchased after that, do not vest as after-acquired property. It may be that the Friggers hold the shares, as they say, as bare trustees for H & A Frigger Pty Ltd in its capacity as trustee of the FSF. 39 The serious question arises, in summary, because of the following evidence. There appears to be no dispute that the FSF exists and that it is a trust. Mrs Frigger has given evidence, on oath, that all of her and her husband's assets other than their principal residence were held in the FSF. She says that a share portfolio was transferred to the FSF in 1997. There is an annual return which, on its face, was prepared for submission to the Australian Taxation Office which appears to show the shares in the portfolio as an asset of the FSF. There is evidence that the tax file number for the FSF has been notified to more than one share registry and, on one occasion, in respect of a specific shareholding. 40 It is true that some of the documents the Trustees have produced require further explanation if they are to be accepted as consistent with the claim that the CommSec portfolio is an asset of the FSF. I refer to the account opening form from 1999 and the off market transfer form for Fletcher Challenge Ltd from the same year. The first of these suggests that when Mr and Mrs Frigger opened the CommSec portfolio account in 1999, they did not do so to hold or trade FSF shares. The second suggests that in that year, the FSF share portfolio was traded or held in a different account. 41 Mrs Frigger submitted that the 1999 off market transfer was an instance of she and her husband transferring shares held beneficially by them into the FSF, although I note that the tenor of her first affidavit is that the entire portfolio was transferred to the trustee in 1997. She has also said in an affidavit that when she and her husband became trustees in 2008, they used their existing account with CommSec to trade shares for the FSF because the account was in their names. 42 There is nothing inherently implausible about any of this. Mr and Mrs Frigger are professional people at or approaching retirement age with a substantial investment portfolio, who may be expected to consider placing that portfolio into a self-managed superannuation fund such as the FSF. Nothing in the evidence adduced on behalf of the Trustees directly contradicts this. I accept that the Friggers have raised a case which, in appropriate circumstances, would be capable of founding an interlocutory injunction. 43 However there are uncertainties in the evidence which must be taken into account in assessing the course that is least likely to produce injustice in the circumstances of the case. 44 First, the evidence that supports the case is at a high level of generality. Mrs Frigger is correct to point out that the CommSec portfolio is not itself an asset capable of being beneficially owned by another entity such as the beneficiaries of the FSF. The assets that are capable of meeting that description - the assets in dispute - are the individual shareholdings. In the case of each shareholding, to succeed at trial the Friggers will need to point to an objectively manifested intention on their part (or the part of any other relevant entity) that the shares were to be held on trust for another person. It may be that this objective intention can be inferred from all the circumstances, so that it is not necessary to adduce specific evidence about the circumstances of each share transaction. But at the moment, there is little more than broad assertion on the part of Mrs Frigger for the court to go on. 45 Second, that is so in circumstances where one would expect that it would be easy to adduce more specific evidence of the requisite intention. Mrs Frigger has said, and I accept in a preliminary way for the purposes of this application, that it is the share registries, rather than CommSec, who note the beneficial ownership of shares in their records. But she has produced no direct evidence of any share registry having done so. There are tax file number notifications, but only one of them relates to a specific shareholding. And that is an unsigned and undated form (which may have been completed online). In oral submissions Mrs Frigger accepted that the holder identification statements issued by share registries were the best evidence of the ownership of the shares and she says that the registries did inquire as to beneficial ownership. And yet other than the form which I have just mentioned, the Friggers have produced no evidence of those matters in relation to any specific shareholding. 46 Third, other evidence on which the Friggers rely is at best equivocal, at least in the context that the evidence currently presents. One example is the balance sheet for the FSF. While it is capable of supporting the Friggers' case, at the moment its status in the evidence is a document prepared by Mrs Frigger at an undisclosed time for an undisclosed purpose. 47 Mrs Frigger in oral submissions relied on Mingos v Commissioner of Taxation [2019] FCA 834 as establishing that financial accounts can be evidence of the matters recorded in them. There is no doubt that is so. But as Mingos indicates, it depends on the context in which the accounts were produced and the use to which they are put. In that case, a taxpayer claimed that he had an ownership interest in certain assets. Davies J found against him, partly because the assets had been brought to account as the assets of a trust in the financial statements of the trust. It was significant that the taxpayer had signed the accounts as a director of the corporate trustee; that is, he had made a signed statement which turned out to be against his interest in his dispute with the Commissioner of Taxation (see [47]). There had also been a distribution of income consistent with the accounting treatment (see [52]). Also, it must be borne in mind that the court reached those conclusions after a full trial. Mingos is not authority for any general proposition that entries in financial accounts must be accepted as true. In the present case, the financial statement relied on is an undated and unsigned document prepared by Mrs Frigger on an occasion and for a purpose that is undisclosed. I place little weight on it. 48 Another example of evidence that is equivocal at best is the registration of a security interest by the FSF over the shares in the portfolio. That has the virtue that it can, at least, be dated to 2014. That is well before the bankruptcy, at a time when the beneficial ownership of the shares may not have been an issue in the way it is now. But for reasons I have given, it is difficult to know what to make of it. There is no evidence (as distinct from statements made from the bar table) as to why the registration was lodged and no context permitting any firm conclusions to be drawn from it. 49 Fourth, the circumstances in which the notation 'Frigger Super Fund' came to be fixed to the 2017-2018 annual statement for the portfolio have not been adequately explained. Mrs Frigger's evidence implicitly confirms that she added the notation. But she does not say when, and her explanation is unsatisfactory. It was not until the Trustees produced evidence suggesting that the notation was made subsequent to the generation of the statement that the Friggers gave any acknowledgment of Mrs Frigger's role in making the notation. In the circumstances I cannot, at the moment, rely on the notation as evidence of anything. 50 Fifth, another matter that is unexplained is the fact that none of the shares appear to have been acquired in the name of H & A Frigger Pty Ltd. It appears to have been the trustee of the FSF since July 2018. Under s 10 of the Trustees Act 1962 (WA), the execution of the instrument of appointment vested the trust property in the company, without any conveyance. There have been frequent trades since July 2018. They all appear to have been in the name of Mr and Mrs Frigger. Why that would be so if the shares are assets of the FSF is unclear. If a company is trustee of a trust, and shares are bought in the name of two individuals who are not trustees of the trust then it is difficult, without more, to see how the shares can be subject to the trust. I have mentioned how Mrs Frigger's evidence that the shares have been acquired in the name of the FSF is undermined by certain buy confirmations. It may be that her evidence is supported by holder identification statements, or other share registry records, but none have been produced. 51 It is also unclear why the shares that were held at the time that Mr and Mrs Frigger were replaced as trustees have not been transferred into the name of the new trustee. Clause 167 of the FSF trust deed, which I have already mentioned, requires the retiring trustees to do everything necessary to vest the fund in the replacement trustee. There is no evidence of any steps taken to fulfil that obligation. 52 So while there is a serious question to be tried, the applicants' case is subject to numerous uncertainties on the state of the evidence as it currently stands. In saying this, I make no forecast of the likely outcome of the trial: see Beecham Group Ltd v Bristol Laboratories Pty Ltd at 622. But the existence of these uncertainties is relevant to the overall exercise of weighing up which course carries the greater risk of injustice. 53 I should briefly mention two other complaints the Friggers made about Ms Trenfield's conduct in relation to the shares. One was that she did not confer with them before writing to CommSec. It seems unlikely that a trustee in bankruptcy has an obligation to confer with the bankrupt before taking steps to take control of assets, but in any event that claim is not relevant to the application for interlocutory relief. Another complaint was that Ms Trenfield did not write to CommSec until nearly a year after her appointment. The Friggers say this has given rise to an estoppel preventing her from asserting that the shares have vested in her. They say that the delay led them to believe that she accepted that the shares did not vest in her, and that they relied on that by not selling the whole portfolio. But there is no evidence to support those claims. Neither of those two matters makes the case for the Friggers more compelling.

Balance of convenience and adequacy of damages 54 Consistently with the approach suggested by the Full Court in Samsung Electronics at [61], I will consider the questions of balance of convenience and adequacy of damages together: see also Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2] [2017] WASCA 76 at [131] (Buss P, Murphy JA and Beech J). 55 In my view, the balance of convenience does not favour the Friggers here. If the court orders the Trustees to retract the letter to CommSec and otherwise act so as to permit the Friggers to trade the shares again, there is a possibility that they will sell at least some of the shares, and place the proceeds in accounts over which the Trustee has no control. 56 I do not suggest any intention on the part of the Friggers to remove all of the shares (or the proceeds of their sale) from the reach of the Trustees in a way that is unlawful or improper. There is no evidence that they have any such intention and the Trustees have not alleged that they do. But there is evidence that the Friggers wish to continue to trade actively in the shares. That is the very basis for their application and also for the claim that the orders are needed urgently. 57 It is inherently unlikely that if the Friggers do sell shares, they will pay the money into accounts that are controlled by the Trustees. After all, they maintain that they are under no obligation to do so. But if it turns out after a trial that they are wrong about that, and that the shares were assets divisible among the creditors of the bankrupt estate, there is clearly potential for the Trustees to face difficulties in recovering those funds for the benefit of creditors. 58 On the other side of the balancing exercise, if the Friggers end up succeeding at trial, they will have a claim to damages. They seem to contend that the lock on the account is causing them to suffer loss because they are unable to sell shares to take advantage of positive price movements in securities in the CommSec portfolio, or to avoid or minimise the effects of negative price movements. There is no evidence at all of any movements in the price of the securities, or evidence as to which way prices are going. If the securities appreciate in value, there may be no loss. It may be accepted that there is always a possibility that share prices will go down, but it is impossible on the evidence to reach any view about how likely that is or the magnitude of the losses that will be caused if it does occur. In any event, the amount of the loss will be relatively easy to calculate and will be claimable in damages from the Trustees. Mrs Frigger has said that Mr Frigger is preparing a spreadsheet that will show these losses. 59 At the hearing I nevertheless raised a possible problem of proof with the Friggers. If there is no contemporaneous evidence of any intention to trade in any given shares, attempting to show losses after the event with the benefit of hindsight indicating exactly when a share should have been brought or sold may prove unpersuasive. A difficulty of proving causation can go towards establishing that damages are inadequate as a remedy: Huhtamaki Australia Ltd v Botha [2004] NSWSC 386 at [17] (Hamilton J); Emeco International Pty Ltd v O'Shea [2012] WASC 282 at [21]-[22] (Edelman J). 60 At the hearing the Friggers accepted that they would face problems if they did not have contemporaneous records. But they discounted the idea that it would cause them any difficulty in this case. Both Mrs Frigger and Mr Frigger said that Mr Frigger was keeping such records now and that is supported by the evidence about the spreadsheet to which I have referred. 61 Mr Frigger also claimed from the bar table that the lock has shut him out of certain tools such as charts and diagnostic indicators. But there was no evidence of that and no evidence indicating how, or to what extent, the absence of the tools would cause the Friggers to suffer loss and damage. 62 In their affidavits and submissions the Friggers did not articulate any reasons as to why damages would not be an adequate remedy. Conscious that they are self-represented, I explained to them at the hearing that the question of whether damages will be an adequate remedy is often relevant in interlocutory injunction applications. But Mrs Frigger was at pains to make clear that not only would they 'be making a massive damages claim for share purchases and tradings that we are not able to make', but they will also be making a claim for damages for having been kept out of the share trading tools I have mentioned. 63 There is no reason to think that the Trustees will not be able to meet any order for compensation if it is made. In all the circumstances, I conclude that the Friggers will be in as good a position, if they are confined to a claim for compensation, as they would be if the interlocutory orders they seek were granted. They have sought, on an interlocutory basis, an order for compensation, but it is obviously inappropriate to make such an order before trial. 64 I am conscious that the orders the Friggers seek would restore the parties to the position they were in very shortly before the making of the application, immediately before Ms Trenfield sent the letter to CommSec. So it may be said that while the orders are a mandatory injunction in form, in substance they protect and do not disturb the status quo: see Tsimidopoulos v Mulson Holdings Pty Ltd (1989) 1 WAR 359 at 368 (Malcolm CJ). Interlocutory mandatory injunctions are more likely to issue where the defendant is compelled, not to embark upon a fresh course of conduct, but, as here, to revert to a course of conduct pursued before the occurrence of the acts or omissions that provoked the litigation: Businessworld Computers Pty Ltd v Australian Telecommunications Commission (1988) 82 ALR 499 at 503 (Gummow J). 65 However I doubt that it is useful in this case to characterise the result in terms of the status quo or reversion to the position that obtained prior to the alleged contraventions. Fundamentally, the dispute here concerns ownership of property. The aim of the court must be to resolve the application for interlocutory orders in a manner calculated to best preserve the property, for the benefit of whichever party establishes ownership, while at the same time minimising the risk of injustice to both parties in view of the present uncertainty as to the ultimate outcome. For the reasons I have given, I consider that approaching the matter in that way does not favour the orders the Friggers seek.

Conclusion 66 I do not consider that the balance of convenience favours the application for an interlocutory injunction. The likely outcome of granting the orders sought will be that at least some of the shares, or the proceeds of selling them, are removed from the reach of the Trustees. If it turns out after trial that the shares did vest in the Trustees, the creditors of the estate may suffer loss as a result, which they may not be able to recover from the Friggers. If the orders sought are not granted, damages are likely to give the Friggers an adequate remedy. 67 On the state of the evidence as it currently stands, the case for relief faces numerous uncertainties. The orders the Friggers seek here on an interlocutory basis are the same as the orders they seek on a final basis. Yet as I have explained, they ask the court to make those orders on the basis of evidence with many gaps; gaps that they seek to cross with leaps of broad assertion. The risk of injustice will be higher if the interlocutory application is granted than it will be if the application is dismissed. 68 The application for interlocutory orders requiring Ms Trenfield to send letters to CommSec and ASX Settlement Pty Ltd, and to make good any loss, is refused. It remains open to the applicants to pursue those orders as final relief. I will hear the parties as to costs. I certify that the preceding sixty-eight (68) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jackson.