Frigger v Trenfield

LOGAN J: 1 On 24 March 2021, Mrs Angela Cecilia Theresa Frigger and Mr Hartmut Hubert Josef Frigger instituted proceedings naming their trustee in bankruptcy, Ms Kelly Trenfield, a liquidator, Mr Mervyn Jonathon Kitay, and a member of the firm of solicitors Herbert Smith Freehills, Mr David William John, as respondents. The proceeding as instituted sought, on grounds stated in what was said to be a statement of claim, accompanying affidavit or other document, an order annulling their bankruptcies pursuant to s 153B of the Bankruptcy Act 1966 (Cth). In the alternative, they sought that sequestration orders which had been made against each of them be set aside. In addition, they sought that Mr Kitay and Mr John jointly and severally pay the costs, expenses and remuneration of Ms Trenfield as trustee to be assessed after resolution of their annulment application. They further sought an order that Mr Kitay and Mr John jointly and severally pay them compensation for losses caused by the sequestration order. That sequestration order was made on 21 July 2018. They sought that that compensation be assessed after the resolution of their annulment application. 2 A helpful chronology of events which have happened in the proceedings since then was offered by Justice Feutrill in reasons for judgment delivered last year in Frigger v Trenfield (No 6) [2022] FCA 1233 by which his Honour refused on 17 October 2022, an application for expedition of the proceedings. I incorporate by reference without repeating that chronology. 3 Materially, since then, a number of events have occurred. One such event is that, on 24 March this year, the Full Court dismissed an appeal by Mr and Mrs Frigger against orders which Jackson J had made in the original jurisdiction: see as to the original jurisdiction, Frigger v Trenfield (No 10) [2021] FCA 1500 and, in respect of the appeal, Frigger v Trenfield (No 3) [2023] FCAFC 49. Since then, as Exhibit A attests, Mr and Mrs Frigger have filed in the High Court an application for special leave to appeal against the judgment of the Full Court. That special leave application, as filed on 20 April 2023, is pending in that court. Another event which has occurred since then is that the proceeding in the Western Australian Supreme Court before Hill J, being COR131/2021, became, on 30 November 2022, the subject of a reserved judgment. 4 Related to the determination of Mr and Mrs Frigger's appeal to this Court, is that an undertaking hitherto given by the trustee in relation to assets vested in her (which were the subject of controversy resolved by the appeal), not to deal with the assets until further order of the court is still extant. There is an application to be released from that undertaking which awaits determination. It is, to say the very least, most unfortunate indeed that those acting for the trustee did not seek to have that heard and determined today. However that may be, the position which falls to be considered today is that there is an extant undertaking not to deal with the assets, notwithstanding that there has been a determination by the Full Court. 5 It is, however, desirable to approach the present proceeding on the basis of a desire on the part of Mr and Mrs Frigger to be either at large in terms of an ability to deal with those assets or, in any event, insofar as the same may be necessary, pending the determination either of their originating application in this Court, either in its original or as proposed amended form, or pending resolution of the High Court special leave application, or to restrain the trustee from dealing with the controversial assets in the course of administering the bankrupt estates. 6 Mr and Mrs Frigger wish to amend the originating application so as to add a claim that the sequestration order should be set aside on the basis that it was obtained by way of a fraud on the court. They also wish to amend the originating application so as to join the firm Herbert Smith Freehills. Yet further, they seek that the court hear and determine their application as so amended, notwithstanding the reserved judgment of the Western Australian Supreme Court in the proceeding to which I have referred. 7 The liquidator seeks that an existing order adjourning the hearing and determination of the originating application in this Court be maintained. Herbert Smith Freehills, who attended by counsel to respond to the joinder application, resists the joinder application. On a contingent basis, in the event that the firm were joined, Herbert Smith Freehills joins with the liquidator in submitting that, having regard to the issues which fall for determination in the reserved judgment in the Western Australian Supreme Court, the adjournment of the present proceeding should be maintained. 8 The trustee wishes to do nothing more and nothing less than administer the bankrupt estate according to law. In that regard, the trustee is neutral in relation to the originating application's merits but does, in relation to ability to administer the estate, point to the absence of occasion to order a restraint, assuming for the moment that a release from undertaking were granted, either based on the special leave application in particular or the proposed amendment alleging fraud. 9 It is desirable that these several interlocutory applications be determined forthwith. 10 The issues which are the subject of the reserved judgment in the Western Australian Supreme Court are identified in a further amended originating application in that court in which the following orders are sought: 1 On the grounds set out in paragraphs 13 to 17 of the Confidential Affidavit, pursuant to Order 67B Rule 5(3)(B) of the Rules of the Supreme Court 1971, access to the Confidential Affidavit be restricted until further order of this Honourable Court. 2 A declaration that the Liquidator and, to the extent necessary, CAT, did not require the leave of this Honourable Court, pursuant to section 477(2B) of the Act, to: (a) enter into the Costs Agreement between the Liquidator and Freehills, as the predecessor firm to Herbert Smith Freehills (HSF) dated 8 February 2010 which is MJK1 to the Kitay Open Affidavit (First HSF Costs Agreement); (b) retain HSF to act on behalf of the Liquidator and/or CAT including: (1) advising in relation to the conduct of the liquidation of CAT; (2) in Supreme Court Action COR 2 of 2010; (3) in Supreme Court Action CIV 2765 of 2010; (4) in Supreme Court action COR 2 of 20202010 to obtain: (i) the Confidentiality Order described at paragraph 16 of the Kitay Open Affidavit (Confidentiality Order); and (ii) approval from this Honourable Court to enter into the Funding Agreements described in paragraph 16 of the Kitay Open Affidavit (Funding Agreements); and (5) to obtain the declarations and/or leave sought in the application herein, (together the First HSF Retainers). 3 In the alternative to Order 2, to the extent that the First HSF Costs Agreement and/or the First HSF Retainers are agreements to which section 477(2B) of the Act applies, the First HSF Costs Agreement is approved, effective as and from 8 February 2010 and the First HSF Retainers are approved, effective as and from the dates on which HSF was first instructed in each relevant matter. 4 Pursuant to section 1322(4)(a) of the Act, neither the entry by the Liquidator into the First HSF Costs Agreement, nor the First HSF Costs Agreement itself and the First HSF Retainers, are invalid by reason of the Liquidator not having obtained approval pursuant to section 477(2B) of the Act prior to entering into the First HSF Costs Agreement or the First HSF Retainers. 4A A declaration that CAT did not require the leave of this Honourable Court, pursuant to section 477(2B) of the Act, to retain HSF to obtain the Protection Orders described in paragraph 34 of the Kitay Open Affidavit (Protection Orders)(CAT Retainer). 5 A declaration that the Liquidator, and to the extent necessary, CAT, did not require the leave of this Honourable Court, pursuant to section 477(2B) of the Act, to retain HSF to act on behalf of the Liquidator and/or CAT: (a) enter into the Costs Agreement between the Liquidator and HSF dated 29 October 2013 which is MJK2 to the Kitay Open Affidavit (Second HSF Costs Agreement); and (b) retain HSF to act on behalf of the Liquidator and/or CAT: (1) in COR 2 of 2010 to obtain the Confidentiality Order described at paragraph 16 of the Kitay Open Affidavit (Confidentiality Order) and the Protection Orders described in paragraph 34 of the Kitay Open Affidavit (Protection Orders); (1) [NOT USED] (1) to issue a Bankruptcy Notice to the Defendants (the Friggers), in an attempt to recover the judgment debt for the costs awarded in obtaining the Protection Orders; (2) in Federal Court Proceedings WAD 428 of 2016 to defend the application by the Friggers to set aside the Bankruptcy Notice; (3) in Federal Court Proceedings WAD 428 of 2016 to defend the application to review the decision of Registrar Trott in refusing to set aside the Bankruptcy Notice; (4) to issue a Creditors Petition to the Friggers; and (5) in Federal Court Proceedings WAD 616 of 2017, being the proceedings which resulted in the Bankruptcy of the Friggers, (together the Second HSF Retainers). 6 In the alternative to Orders 4A and 5, to the extent that the Second HSF Costs Agreement and/or the CAT Retainer and/or the Second HSF Retainers are agreements to which section 477(2B) of the Act applies, the Second HSF Costs Agreement is approved, effective as and from 29 October 2013 and the CAT Retainer and/or the Second HSF Retainers are approved, effective as and from the dates in which HSF was first instructed in each matter. 7 Pursuant to section 1322(4)(a) of the Act, neither the entry by the Liquidator into the Second HSF Costs Agreement, nor the Second HSF Costs Agreement itself and the CAT Retainer and/or the Second HSF Retainers, are not invalid by reason of the Liquidator not having obtained approval pursuant to section 477(2B) of the Act prior to entry into the CAT Retainer or Second HSF Costs Agreement or the Second HSF Retainers. 8 A declaration that the Liquidator, and to the extent necessary, CAT, did not require the leave of this Honourable Court, pursuant to section 477(2B) of the Act to: (a) enter into the Costs Agreement between the Liquidator and HSF dated 23 August 2019 which is MJK3 to the Kitay Open Affidavit (Third HSF Costs Agreement); and (b) retain HSF to act on behalf of the Liquidator and/or CAT in COR 2 of 2010 in the application to have Mrs Frigger committed for contempt of court and associated orders (Contempt Application) (Third HSF Retainer). 9 In the alternative to Order 8, to the extent that the Third HSF Costs Agreement and/or the Third HSF Retainer are agreements to which section 477(2B) of the Act applies, the Third HSF Costs Agreement is approved, effective as and from 23 August 2019 and the Third HSF Retainer is approved, effective as and from the date upon which HSF was first instructed in relation to the Contempt Application. 10 Pursuant to section 1322(4)(a) of the Act, neither the entry by the Liquidator into the Third HSF Costs Agreement nor the Third HSF Costs Agreement itself and the Third HSF Retainer, are invalid by reason of the Liquidator not having obtained approved pursuant to section 477(2B) of the Act prior to entering into the Third HSF Costs Agreement or the Third HSF Retainer. 10A A declaration that the Liquidator, and to the extent necessary, CAT did not require the leave of this Honourable Court, pursuant to s477(2B) of the Act to: (a) enter into the Costs Agreement between the Liquidator and HSF dated 9 November 2020 which is MJK15 to the Second Affidavit of Mervyn Jonathan Kitay dated 27 August 2021 (Second Kitay Affidavit) (Fourth HSF Costs Agreement); and (b) to retain HSF to act on behalf of the Liquidator and/or CAT in COR 2 of 2010 to defend the application by Mrs Frigger to set aside the Confidentiality Order and the Protection Orders (Set Aside Application)(Fourth HSF Retainer). 10B In the alternative to Order 10A, to the extent that the Fourth HSF Costs Agreement and/or the Fourth HSF Retainer are agreements to which section 477(2B) of the Act applies, the Fourth HSF Costs Agreement is approved, effective as and from 9 November 2020 and the Fourth HSF Retainer is approved, effective as from the date HSF was first instructed to act in the Set Aside Application. 10C Pursuant to section 1322(4) of the Act, neither the entry by the Liquidator into the Fourth HSF Costs Agreement, nor the Fourth HSF Costs Agreement itself and the Fourth HSF Retainer, are invalid by reason of the Liquidator not having obtained approval pursuant to section 477(2B) of the Act prior to entry into the Fourth HSF Costs Agreement or Fourth HSF Retainer. 11 A declaration that the Liquidator and, to the extent necessary, CAT did not require leave of this Honourable Court, pursuant to section 477(2B) of the Act to retain Lenhoff & Hotz to act on behalf of the Liquidator and/or CAT in Federal Court Proceedings WAD 40 of 2021 (First Lenhoff & Hotz Retainer) in the circumstances described in paragraphs 44 to 48 of the Kitay Open Affidavit. 12 In the alternative to Order 11, to the extent that the First Lenhoff & Hotz Retainer is an agreement to which section 477(2B) applies, the First Lenhoff & Hotz Retainer is approved effective as and from the date on which the First Lenhoff & Hotz were first instructed in Federal Court Action WAD 40 of 2021. 13 Pursuant to section 1322(4)(a) of the Act, the entry by the Liquidator into the First Lenhoff & Hotz Retainer is not invalid by reason of the Liquidator not having obtained approval pursuant to section 477(2B) of the Act prior to entry into the First Lenhoff & Hotz Retainer. 14 Pursuant to section 477(2B) of the Act, the Liquidator's entry into: (a) the Costs Agreement dated 26 July 2021 with Lenhoff & Hotz which is MJK14 to the Confidential Affidavit (New Lenhoff & Hotz Costs Agreement); and (b) the retainer with Lenhoff & Hotz to act for the Liquidator and CAT in Supreme Court Action CIV 2765 of 2010 from the date of the New Lenhoff & Hotz Costs Agreement (Second Lenhoff & Hotz Retainer), be approved, effective from 26 July 2021. 15 Pursuant to section 1322(4)(a) of the Act, neither the entry by the Liquidator into the New Lenhoff & Hotz Costs Agreement, nor the New Lenhoff & Hotz Costs Agreement itself nor the Second Lenhoff & Hotz Retainer, are invalid by reason of the Liquidator not having obtained approval pursuant to section 477(2B) of the Act prior to entering into the New Lenhoff & Hotz Costs Agreement or the Second Lenhoff & Hotz Retainer. 16 Further or in the alternative, a declaration that each of the following proceedings, steps in proceedings and/or orders made in proceedings are valid, effective and enforceable, and are not a nullity: (a) the proceedings commenced by the Liquidator and CAT in the Federal Court of Australia by originating process dated 2 March 2021 (being Federal Court proceedings WAD 40 of 2021) for leave pursuant to section 58(3) of the Bankruptcy Act 1966 (Cth) to continue the counterclaim in Supreme Court Action CIV 2765 of 2010; (b) the orders made on 6 May 2021 by the Honourable Justice Jackson in Federal Court proceedings WAD 40 of 2021, which orders are MJK10 to the Kitay Open Affidavit; (c) the defence by the Liquidator and CAT of the claims brought by the Friggers (in various capacities) in Supreme Court Action CIV 2765 of 2010; (d) the counterclaim brought by the Liquidator and CAT in Supreme Court Action CIV 2765 of 2010; (e) all orders made in Supreme Court Action CIV 2765 of 2010; (f) the interlocutory process dated 6 January 2012 for orders approving the entry into the Funding Agreements and for the making of the Confidentiality Order in Supreme Court proceedings COR 2 of 2010; (g) the orders made on 17 January 2012 by Acting Master Chapman in Supreme Court proceedings COR 2 of 2010 approving entry into the Funding Agreements and making the Confidentiality Order, which orders are MJK5 to the Kitay Open Affidavit; (h) the interlocutory process dated 5 July 2013 for orders approving entry into the Deed of Variation (as that term is defined in paragraph 51 of the Kitay Open Affidavit) (Deed of Variation) in Supreme Court proceedings COR 2 of 2010; (i) the orders made on 26 July 2013 by the Honourable Justice McKechnie in Supreme Court proceedings COR 2 of 2010 approving entry into the Variation Agreement, which orders are MJK11 to the Kitay Open Affidavit; (j) the interlocutory process dated 25 November 2013 seeking the Protection Orders in Supreme Court proceedings COR 2 of 2010; (k) the orders made on 15 May 2014 by Master Sanderson in Supreme Court proceedings COR 2 of 2010 making the Protection Orders, which orders are MJK8 to the Kitay Open Affidavit; (l) the orders made on 17 June 2014 by Master Sanderson in Supreme Court proceedings COR 2 of 2010, pursuant to which Master Sanderson awarded the Liquidator and CAT indemnity costs in relation to the application which resulted in the Protection Orders, which orders are MJK17 to the Second Kitay Affidavit; (m) the taxation of costs and the certificate of taxation of costs dated 5 July 2015 pursuant to the indemnity costs orders of Master Sanderson made 17 June 2014 in Supreme Court proceedings COR 2 of 2010, which certificate is MJK18 to the Second Kitay Affidavit; (n) the proceedings commenced by the Applicants in the Supreme Court of Western Australia by ex parte originating motion dated 4 November 2016 being Supreme Court proceedings COR 238 of 2015 for orders approving entry into the 2016 Agreements (as that term is defined in paragraph 53 of the Kitay Open Affidavit)(2016 Agreements) and associated confidentiality orders; (o) the orders made on 22 November 2016 by Master Sanderson in Supreme Court proceedings COR 238 of 2015 for confidentiality and for approval of entry into the 2016 Agreements, which orders are MJK12 to the Kitay Open Affidavit; and (p) the Notice of Motion for Punishment of Mrs Frigger for contempt of court and other orders dated 8 October 2019 brought by the Liquidator and CAT in Supreme Court proceedings COR 2 of 2010. 17 The costs of this application be costs in the liquidation of CAT or otherwise be provided for. 18 Such further or other orders as this Honourable Court deems fit. 11 It is immediately apparent on the face of that originating application that there is an overlap of issues as between that proceeding and Mrs Frigger's application in this Court. The overlap is not a complete one, but, having regard to the case which Mr and Mrs Frigger seek to advance in this Court in relation to the conduct of the liquidator either directly or by his solicitors, it is a considerable one. 12 In my view, if anything, the case for maintaining an adjournment is even more compelling than when I last had occasion to consider that subject. Mr and Mrs Frigger are perfectly entitled to seek from this Court an order which annuls their bankruptcy. Subject to well settled principles attending allegations of fraud, they are also entitled, if they comply with requirements in respect of the making of such a grave allegation, to have that too determined. It would, however, be not just an inefficient use of judicial resources of this Court but potentially fraught in relation to the overall administration of a system of justice which allocates concurrent jurisdiction to the Western Australian Supreme Court in an overlapping matter with this present proceeding to embark upon a hearing of issues which also fall for determination in the Western Australian Supreme Court. Yet further, the outcome of those Western Australian Supreme Court proceedings is highly relevant to conclusions which one might reach in the present proceeding, if only as a matter of discretion, in relation to whether or not to annul the bankruptcies of Mr and Mrs Frigger. That being so, whilst it was possible today to have made case management orders directed to the end of a subjective hearing, it seems to me that no such orders should be made. Instead, the existing adjournment should be maintained, at least pending the hearing and determination of proceeding COR131/2021 in the Western Australian Supreme Court. 13 That necessarily presents something of a dilemma for the trustee in the faithful discharge of duties under the Bankruptcy Act. The trustee has the benefit of orders in respect of the only appeal as of right against a challenge to the vesting of the controversial assets in the trustee. The filing of an application for special leave does not of itself operate as a stay, nor does it operate of itself to restrain the trustee. It most certainly does not operate as an order which reverses the effect of the vindication of Jackson J's orders in the original jurisdiction as affirmed on appeal. 14 Passing on to whether or not there should be any restraint, it seems to me that it is desirable to consider whether or not there should be any amendment of the originating application. As to that, in an affidavit filed in April 2023 by Mrs Frigger, Mr and Mrs Frigger have set out what are said to be grounds upon which a fraud case is to be advanced. That is put forward so as to inform one of the proposed amendments. In turn, that interplays with the other proposed amendment, which is to join Herbert Smith Freehills. It is no part of proceedings today to determine on the merits whether the allegations there made are proved, but fraud must be distinctly alleged. A document found annexed to Mrs Frigger's April affidavit falls a long way short of a proposed statement of claim alleging material facts which, if proved, would ground a finding of fraud. 15 Professional persons are not subject to any special rule in relation to allegations of fraud beyond those of any other person, so I do not approach the subject of whether or not to grant leave to amend on the basis that the case as I understand it would involve grave conduct on the part of an official liquidator, Mr Kitay, and a partner in a firm of solicitors. That that is so in terms of allegation does nothing more than underscore a need for precision, as it would, for that matter, if the fraud were but that of any other petitioning creditor and an agent of a petitioning creditor or creditor. I am not disposed, on the basis of the grounds which are sought to be advanced, to permit amendment of the originating application as proposed by Mr and Mrs Frigger. 16 It was said that an evidentiary foundation was to be gleaned from an affidavit made in March last year by Mrs Frigger. It seems to me that there is a disjunct between that affidavit and the grounds that are sought to be advanced as per the April affidavit. If there is to be any such case, it is one which would have to be the subject of a proposed statement of claim and a supporting affidavit or affidavits containing evidence which, if accepted, would warrant a conclusion that the case for fraud as alleged in a statement of claim was capable of being made out. I, therefore, decline to permit that amendment. 17 That being so, it becomes immediately apparent that the endeavour to join Herbert Smith Freehills is nothing more than a rehearsal of grounds on which it was sought to maintain the joinder of Mr John in the originating application. That endeavour was rebuffed by Colvin J in an interlocutory judgment in this proceeding delivered on 31 May 2021: 2 Mrs and Mr Frigger seek to justify Mr John's joinder as a party in these proceedings on the basis that if they are successful in having their bankruptcy annulled, they wish to advance claims against Mr John personally. He is not otherwise an interested or necessary party to the annulment application. Mrs and Mr Frigger were directed to file a statement of the grounds on which they seek to proceed against Mr John. Those grounds concern the circumstances in which Mr John's retainer agreement was entered into in respect of matters relating to the insolvent administration of CAT. Mrs and Mr Frigger have confirmed today that the grounds are intended to state the basis upon which the circumstances give rise to a claim for damages against Mr John. 3 There is no reason why a claim of that kind for damages against Mr John should form part of the annulment application and there is no benefit to be gained in terms of effective case management for a distinct claim of that kind to be included as part of these proceedings. Indeed, Mrs and Mr Frigger recognise the separate significance of that claim. This morning they have sought an order that the application for damages be temporarily stayed, pending resolution of the annulment application. That position reflects the fact that nothing in that application bears upon whether the annulment application brought in these bankruptcy proceedings should succeed. 4 In those circumstances it is plain that Mr John should not be joined as a party to these proceedings and, in order to ensure their effective case management, the claim against him should be dismissed. The answer, in my view, to their endeavour to join Herbert Smith Freehills can be supplied by deleting "Mr John" and inserting "Herbert Smith Freehills" in the paragraphs quoted. It follows that the application for joinder should be dismissed. 18 Having settled upon the form of the originating application to consider in conjunction with the special leave application with respect to whether or not to grant a restraint, or, for that matter, place assets back in the hands of Mr and Mrs Frigger, I turn to consider whether such an order should be made. Mr and Mrs Frigger point to an alleged lack of management skills on the part of the trustee in relation to the management of those assets since sequestration. A correlative of that is what are said to be superior management skills on their part. It is not necessary to in any way pass upon questions of such relative skills, even assuming there were evidence in that regard. At present, and as vindicated by an order of this court, the management of those assets falls to the trustee, including in that regard what to do with any dividends received. 19 Mr and Mrs Frigger point to the contingency of adverse CGT events which might arise in the event of realisations. I assume in their favour that CGT events may well arise in the event of realisations by the trustee. One might expect that the trustee would, in the ordinary course of events, take advice in relation to the contingency of such events prior to realisations. But it must be remembered that the court does not assume a trustee will do other than his or her duty. That the trustee has done that within the limits of acceptable tolerance is made pellucid by the recent judgment of the Full Court. I, therefore, have no apprehension that the trustee will do other than the trustee's duty. That may not be to Mr and Mrs Frigger's liking, but that is the result of final judgments in the original jurisdiction and the appellate jurisdiction of this Court, and duties cast on the trustee under the Bankruptcy Act. 20 It is, to say the least, a complicated insolvency administration, also complicated by assertions of rights by Mr and Mrs Frigger. Insofar as those assertions have not been the subject of final judgments foreclosing such assertions, they are perfectly entitled to advance them and the trustee is, in turn, required to make value judgments as to what to do in the face of those assertions. But one thing which this Court does not do is to micro-manage trustees. 21 Assuming for the moment that the trustee were released from undertakings, it would be an unusual but certainly possible thing to restrain the trustee pending the outcome of the originating application or, even more so, the special leave application. 22 As to the special leave application, a single judge of this Court has jurisdiction under s 25(2B)(ab) of the Federal Court of Australia Act 1976 (Cth) to make an interlocutory order after the determination of an appeal to the court. It was not contested on behalf of the trustee that there is jurisdiction, if cause be shown, to restrain the trustee or even, for that matter, to allow Mr and Mrs Frigger to manage the assets. The latter would, of course, be a quite extraordinary order to make in the face of the vesting, which has been vindicated, so I do not pause to consider that any further. The real question is whether or not there should be any restraint at all? 23 At most, at present, the trustee has signified a disposition to be released from the undertaking and to at least be at large to make value judgments in respect of the insolvency administration with respect to any realisations in relation to the assets. In my view, the principles which should attend whether to grant such a restraint, insofar as it is grounded in an extant and as yet undetermined application for special leave are the same as attend whether or not to grant a stay. The relevant authorities may be traced to a judgment of Brennan J in Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd (1986) 161 CLR 681 (Jennings Construction). Pertinent extracts from that and subsequent authorities were helpfully collected by Beaumont J with whom, in this regard, Black CJ and Hill J agreed in Petrotimor Companhia de Petroleos S.A.R.L. v Commonwealth of Australia [2003] FCAFC 82. In Jennings Construction, Brennan J, at 683, observed: The jurisdiction to grant a stay in the present case depends on whether a stay is necessary to preserve the subject matter of the litigation. If an application for special leave to appeal would be futile unless a stay is granted, the jurisdiction arises. Later in that same case, at 684, his Honour stated: In exercising the extraordinary jurisdiction to stay, the following factors are material to the exercise of this court's discretion. In each case, when the court is satisfied a stay is required to preserve the subject matter of the litigation, it is relevant to consider, first, whether there is a substantial prospect that special leave to appeal will be granted; secondly, whether the applicant has failed to take whatever steps are necessary to seek a stay from the court in which the matter is pending; thirdly, whether the grant of a stay will cause loss to the respondent; and, fourthly, where the balance of convenience lies. Obviously enough, the second of those grounds is not pertinent because Mr and Mrs Frigger are seeking restraints from this Court as a sequel to the Full Court judgment from which they seek special leave. 24 In a sense, of course, a restraint does preserve a particular portfolio and other assets now held to have been vested in the trustee. As against that, if truly there is a case to be made for annulment, it may in turn be that there is a case to be made for compensation. The assets concerned are such that any particular loss occasioned by misconduct could be the subject of compensatory orders, be that misconduct in the very institution and prosecution of the creditors' petition or in the later administration of the estate. 25 Assuming, though, that there is something unique about the assets, there is then to be considered prospects. Making any assessment of prospects in respect of the grant of special leave is, obviously, a fraught subject. The criteria for a grant of special leave are as stated in s 35 of the Judiciary Act 1903 (Cth). How those criteria resonate in a different case can be fraught. As set out in the application for special leave, the grounds are as follows: 1. The Full Court of Federal Court erred in law by finding that BOQ1, BOQ2, Main Portfolio, Como and Bayswater (the Disputed Assets) were not the applicants' superannuation interests held in the Frigger Super Fund (FSF), a regulated complying self-managed superannuation fund, notwithstanding those assets were included in FSF's audited financial statements on 8 November 2017 (date of bankruptcy) and 20 July 2018 (date of sequestration orders). 2. The Full Court of Federal Court erred at law by finding the respondent did not make a positive case in the proceeding and consequently had no evidential burden of proof, notwithstanding the respondent asserted in 14 affidavits and written submissions the Disputed Assets had vested in her pursuant to s 58 Bankruptcy Act 1966. 3. The Full Court of Federal Court erred at law [615] by holding that assessment or taxation of a bill of costs is not a fresh step in respect of a provable debt pursuant to s 58(3)(b) Bankruptcy Act. 4. The Full Court of Federal Court erred at law [625] by holding that the respondent complied with her duty to act commercially pursuant to section 19 Bankruptcy Act 1966 when she froze assets worth $6,250,000 for more than 5 years, without proving/ascertaining creditor claims, in circumstances where the Official Trustee had valued creditors at $400,000 on the date the respondent was appointed. 26 The application is certainly not one which is in any way - and I make this observation with respect - a document drawn by amateurs. Even though Mr and Mrs Frigger act for themselves, it is obvious that quite some sophistication indeed is reflected in the specification of the grounds and also, for that matter, in the identified special leave questions, which are as follows: 1. Is the system of supervision in Superannuation Industry (Supervision) Act (SISA) and Superannuation Industry (Supervision) Regulations (SISR) inadequate to protect superannuation interests of members of SMSFs under s 116(2)(d)(iii)(A) Bankruptcy Act 1966? 2. Pursuant to s 125 Bankruptcy Act Official Trustee [514] notified BankWest that BW1 was an asset held in FSF and directed BankWest to remove the restriction BankWest had placed on the account. Without Official Trustee's involvement in the proceeding, does the Federal Court have jurisdiction to overturn a decision of the Official Trustee? 3. The respondent claimed in 14 different documents filed in the proceeding that the disputed assets had vested in her. Each document contained a different or incremental reason for her belief. Pursuant to s 58 BA, does a bankruptcy trustee have power to freeze assets which, prima facie are held in an SMSF, without proof that the bankrupts hold the assets personally? 4. In Coshott v Prentice three judges comprising the Full Court of Federal Court held that evidence of compliance by a SMSF with statutory obligations imposed by SISA and SISR, and evidence of assets held by it, were relevant and important in establishing superannuation interests. In this case, three different judges rejected such evidence. Do those differences of opinion within one court require resolution by the High Court as the final appellate court? 5. The applicants are members of FSF and commenced allocated pensions in 2010. The investments of the applicants' pensions are held either jointly by the applicants (Main Portfolio) or individually (BOQ1, BOQ2, Como and Bayswater). In circumstances where the applicants' superannuation interests vested upon reaching preservation age, are the applicants required to demonstrate their superannuation interests are held on trust for third parties for the purposes of s 116(2)(d)(iii)(A) Bankruptcy Act? 27 That said, when one looks in a little more detail to those grounds in light of the Full Court's reasons for judgment, the view I have at an impressionistic level is that they seek in the end to agitate the consequence of adverse findings of fact made in the original jurisdiction which were vindicated in favour of the trustee on the appeal. So much, in my view, is evident, for example, from this excerpt from the Full Court's reasons for judgment at [529] to [537] inclusive. It seems to me that the failure in the appeal, insofar as it is there identified, was an evidentiary failure, rather than in respect of particular understandings of trust or superannuation law. It is upon the latter that special leave questions are said to arise. 28 Of course, it is possible for special leave to be granted to cure a particular injustice arising in a particular case from a gross error in relation to judicial fact-finding, but that is an unusual case; indeed. It is not one which Mr and Mrs Frigger seek to advance in the special leave application. As framed, it seeks to advance matters of principle, whereas, impressionistically, in my view, what lies behind that is dissatisfaction about those findings of fact vindicated, as I have mentioned, in favour of the trustee on appeal. 29 There also comes a time when a trustee should at least be at large to make value judgments in respect of what to do with assets. The exhaustion of an appeal as of right in relation to the vesting of those assets is a very good time indeed, in my view, for such value judgments to be made. The trustee has not as yet sought to make particular realisations, only so to do if so advised. In my view, the trustee should be at large to do that. It is not just the interests of Mr and Mrs Frigger that are relevant in this regard. The trustee must administer the estate in accordance with the Act, which means that the interests of creditors are also relevant. There comes a time when a trustee must make decisions which may entail realisations, which may entail making of value judgments about proofs of debt and which may, in turn, entail the making of distributions to creditors. Once again, disposal of an appeal as of right is a time when one might, in the ordinary course, regard that duty as arising. 30 The originating application's prospects are also relevant in terms of the alternative basis for the restraints. Once again, they do not fall for anything other than the most impressionistic of assessments. This is a case where a challenge to the bankruptcy notice has failed. This is also a case where the challenge to the sequestration order has failed. This is yet further a case where there is an extant question in the Western Australian Supreme Court which, as I have indicated, overlaps. 31 At present, and at an evidentiary level, in terms of the most recent endeavour to allege fraud, there is, as I have indicated, a disjunct. All that it is possible to conclude at the moment, in my view, is that whatever interrogative note there may be in relation to the foundation for the bankruptcy notice and the creditors' petition, it will at least in part be answered by outcomes in the Western Australian Supreme Court. As to the rest, and at present on the evidence, the case put forward, beyond allegation, is not particularly compelling. I emphasise, however, that that is nothing more than impressionistic. The one thing I am not doing today is reaching any final conclusions whatsoever about the merits of the originating application. 32 Materially, in relation to restraint, all that I am doing is endeavouring to apply principles as described, insofar as they are pertinent, by Brennan J and in the later authorities collected by Beaumont J. I am not satisfied that this is one of those cases where a restraint is warranted. The trustee, in my view, is entitled to the fruits of the judgment obtained in the original jurisdiction and as vindicated on appeal: (1) The following applications by the first and second applicants be dismissed: (i) an application to restrain the first respondent from dealing with assets vested in her as trustee of the bankruptcy estate of the applicants (vested assets), either pending the hearing and determination of the present proceedings or pending the hearing and determination of an application for special leave to appeal to the High Court of Australia from the judgment of the Full Court in Frigger v Trenfield (No2) [2023] FCAFC49; (ii) an application to return the vested assets to the management of the applicants, pending the hearing and determination of one or the other of the court events specified in paragraph 1(a); (iii) an application to join the firm Herbert Smith Freehills as a respondent to these proceedings; (iv) an application for leave to amend the originating application; (v) an application to vacate the existing orders for the adjournment of these proceedings. (2) The proceedings continue to stand adjourned to a date to be fixed, pending the hearing and determination by the Supreme Court of Western Australia of COR131/2021 or further earlier order. (3) The applicants pay forthwith the costs of Herbert Smith Freehills in respect of their application to join that firm as a respondent, to be fixed by a registrar in a lump sum if not agreed. (4) Save as aforesaid, the applicants pay the respondents' respective costs of an incidental to the applications heard today, to be fixed by a registrar in a lump sum if not agreed. 33 In relation to costs, each of the respondents, the trustee and the liquidator have sought costs on the basis that costs should follow the event in respect of the interlocutory outcomes. So too has Herbert Smith Freehills but with the rider that, given the particular application which was dismissed vis-à-vis joinder, the firm should not have to wait till the final hearing and determination of their originating application in this Court to have its costs either as fixed by registrar in gross or taxed. 34 As against that, Mr and Mrs Frigger point to a proposition which has at least a superficial attraction, which is, "But, if we win, why should we have to pay the costs of particular applications along the way in favour of people against whom we ultimately succeed?" The burden with that, in my view, though, is that these were discrete applications and they had discrete outcomes. The outcomes were not merely case management outcomes, but the result of a desire, understandable enough, to press on with a substantive hearing immediately as opposed to awaiting the Western Australian Supreme Court outcome to seek joinder on bases found not to be meritorious and to seek particular restraints found not to be warranted. Those outcomes, in my view, are discrete such that it is better that costs be determined by the judge who heard and determined those questions rather than being reserved, as Mr and Mrs Frigger would seek. 35 In my view, the costs should follow the event in relation to the trustee and the liquidator as well as Herbert Smith Freehills, but as to the latter that firm ought not to have to await the outcome of a proceeding to which it is not joined. I certify that the preceding thirty-five (35) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Logan.

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