In June 2023, Mrs and Mr Frigger commenced proceedings against Ms Kelly-Anne Trenfield who is the trustee administering their bankrupt estates. They claimed that Ms Trenfield and her employer, Consulting (Australia) Pty Ltd, were liable for the costs of various court proceedings. Mrs and Mr Frigger also claimed that Ms Trenfield and FTI were not entitled to be reimbursed their own legal costs of those proceedings from the bankrupt estates and that they were both liable to make good losses that the estates were said to have sustained 'because of a breach of duty' by Ms Trenfield.
FTI
The application was supported by a short statement of claim. It alleged that Ms Trenfield undertook her work as a trustee in bankruptcy subject to the control of FTI, her employer. It claimed that the trustee's fees for the administration of the bankrupt estates of Mrs and Mr Frigger were being paid directly to FTI. It was said that Ms Trenfield had 'surrendered her independence to her employer FTI'. It was claimed that, in those circumstances 'there exists a clear conflict of interest' between Ms Trenfield's duties as trustee and her duties as an employee of FTI. On that basis, it was alleged that Ms Trenfield was 'not a fit and proper person to be registered as a trustee and not qualified to act as a trustee'.
The statement of claim went on to refer to various proceedings brought by Mrs and Mr Frigger to which Ms Trenfield had been a party and to claims by Ms Trenfield to costs and remuneration. It was alleged that the 'purported remuneration' was 'in truth and reality income of FTI' and that legal fees paid by FTI in respect of the proceedings were a business expense of FTI in earning the remuneration. There was also a general allegation that the bankrupt estates had suffered, or were likely to suffer, loss or damage.
In November 2023, Mrs and Mr Frigger amended their statement of claim to introduce allegations concerning the circumstances in which Ms Trenfield had renewed her registration as a trustee in bankruptcy. Those allegations were alleged to support a claim that Ms Trenfield's renewal of registration as bankruptcy trustee had been obtained by fraud. Other amendments were introduced concerning the insurance arrangements that had been put in place as to liabilities incurred by Ms Trenfield as trustee.
When an issue was raised as to whether FTI needed to be a party to the proceedings, Mrs and Mr Frigger filed a proposed amended originating application in which parts of the relief sought against FTI were to be removed. Ms Trenfield did not object and leave was given to file an amended application to remove the references to FTI in the relief claimed.
In May 2024, I considered an application for leave to further amend the statement of claim and the application. During the hearing of that application, Mrs and Mr Frigger confirmed that they did not seek to join FTI.
Some of the amendments proposed in May 2024 were not opposed by Ms Trenfield. However, Ms Trenfield opposed the balance. Save in one limited respect, I determined that the disputed aspects of the amendment applications should be refused: Frigger v Trenfield (Application to Amend)[2024] FCA 508. In doing so, I upheld, in substance, the submission by Ms Trenfield that those aspects of the proposed amendments that were opposed would substantially expand the issues in the proceedings and delay a final hearing of those issues in circumstances where the parties had indicated that they were ready to proceed to a final hearing. The contentious amendments sought to introduce claims which scrutinised the actions that had been taken by Ms Trenfield in the administration of the estates, when the focus of the proceedings concerned whether the arrangements that were in existence between FTI and Ms Trenfield (and the basis upon which she had obtained her registration) had consequences for Ms Trenfield's ability to conduct the administration of the bankrupt estates of Mrs and Mr Frigger.
By that time, the relief sought against Ms Trenfield included an order that the administration of the bankrupt estates should be rescinded 'ab initio'.
Subsequently, the proceedings were listed for final hearing commencing on 10 February 2025.
On 3 February 2025, Mrs and Mr Frigger applied (a) to vacate the trial dates; (b) to join FTI; and (c) to further amend their statement of claim (First Adjournment Application). On 6 February 2025, I allowed the application to vacate the trial dates and relisted the final hearing to commence on 9 June 2025. I otherwise dismissed the application. I published my reasons for those orders on 12 February 2025: Frigger v Trenfield (Application to Adjourn Final Hearing)[2025] FCA 71.
Importantly for present purposes, the application to join FTI was sought to be justified by the proposed introduction of amendments to the statement of claim to the effect that there had been fraud on the part of FTI in allegedly taking over control of the administration of the bankrupt estates.
In rejecting the proposed amendments to include claims against FTI, I reasoned as follows at [29](6):
[4]
Until now, a case against FTI has been expressly disavowed. The controversy in the proceedings is whether Ms Trenfield should be allowed to continue as trustee and whether the estate of Mrs and Mr Frigger should have to bear certain costs, fees and charges. FTI is not a necessary party to proceedings in which relief of the kind presently alleged is sought because that relief is directed to Ms Trenfield's conduct as trustee. The relief sought in the current proceeding extends to the reimbursement of any charges to the estates for work done by Ms Trenfield as well as other employees of FTI. There is also a claim that Ms Trenfield make good any losses to the estates. Ms Trenfield does not seek to involve FTI in the proceedings when it comes to the consequences of relief of that kind were it to be upheld. That is to say, Ms Trenfield does not seek, in the present proceedings, some form of indemnity or to make some other form of claim against FTI that would be contingent upon success by Mrs and Mr Frigger.
[5]
Some three months later, on 12 May 2025, Mrs and Mr Frigger sent a letter to my associate in which they referred to an application for leave to appeal what they described as 'the dismissal of their interlocutory application for joinder of FTI Consulting, and to re-amend Statement of Claim'. The application for leave to appeal had been commenced on 19 February 2025. In circumstances where there had been a case management hearing at which the leave application had been programmed for hearing on 29 July 2025, Mrs and Mr Frigger sought to adjourn the trial dates. They said they had applied to adjourn the final hearing in these proceedings as soon as the date for hearing the leave application was known.
I heard the second adjournment application on 26 May 2025. I made an order dismissing the application and indicated that I would publish my reasons. These are my reasons.
The basis for the adjournment application was the pending application for leave to appeal my earlier decision refusing to allow both the joinder of FTI and certain amendments to the statement of claim.
The main point made in support of the adjournment application was a contention that Ms Trenfield and FTI were jointly liable for the relief claimed in the proceedings and it was therefore necessary for FTI to be joined. I was not invited to consider the merits of the appeal grounds advanced in support of the appeal. It was simply asserted that it has merit. It is, of course, an interlocutory appeal. As such, the points being made could be raised as a basis for challenging the outcome of the final hearing if they were said to have a material bearing on that outcome.
Having regard to the fact that the interlocutory appeal is on foot, there are two types of possible prejudice that might be said to arise if the final hearing is not adjourned. First, there is the prospect for prejudice if Mrs and Mr Frigger were at some risk of being unsuccessful in obtaining the relief that they seek because FTI was not joined. Second, there is the prospect for prejudice if Mrs and Mr Frigger were able to demonstrate that there was error in not allowing the proposed claims against FTI to be pursued as part of the current proceedings. In that regard, the application for leave to appeal also seeks to challenge the refusal of the application for leave to amend to expand the issues in the present case. The prospect for prejudice as to that part of the appeal is the need to pursue a separate claim as to the matters that are sought to be raised (bearing in mind that, to a considerable degree, the refusal of the leave application was because it sought to raise a new case of fraud without an adequate pleaded foundation).
In my view, the submissions advanced by Mrs and Mr Frigger to support the adjournment application exposed two issues; (a) whether there was an adequate explanation for the delay in bringing the application; and (b) whether there was a prospect of real prejudice to Mrs and Mr Frigger of the final hearing proceeding without the joinder of FTI.
[6]
The only explanation for the delay in bringing the application to adjourn was a claim by Mrs and Mr Frigger that up until recently they had expected that the application for leave to appeal the decision on the First Adjournment Application would be determined before the final hearing. I do not accept that as a satisfactory explanation for the delay. Mrs and Mr Frigger are very experienced litigants having had the personal conduct of numerous proceedings in this and other courts over two decades. They have participated in a very large number of hearings. They are familiar with the course of appeals. With the benefit of that experience, they could not have had a reasonable basis to expect that up until early May 2025, when the date for hearing their leave application was set down, there was a prospect that the leave application might have been heard and determined before the final hearing scheduled to commence on 9 June 2025.
As has been explained, these proceedings have been on foot for a considerable amount of time. They began as a claim that was concerned with the arrangements between Ms Trenfield and her employer, FTI, when it came to administration of the bankrupt estates, especially the arrangements as to remuneration and fees. It was expanded to raise an issue about the insurance arrangements that were in place and the circumstances in which Ms Trenfield obtained the renewal of her registration as a trustee. All these matters have a common focus which is concerned with whether the arrangements between Ms Trenfield and FTI mean that Ms Trenfield's independence has been compromised and, in substance, that it is FTI that is directing the conduct of the administration of the bankruptcies. That raises an issue that goes to the heart of the way the whole of the administration is being conducted. It does not concern individual decisions or actions in the conduct of the administration. It is in the interests of all those involved for an issue of that kind to be resolved as soon as possible. There has already been considerable delay in circumstances where Ms Trenfield has sought to press the matter to a hearing as soon as possible.
In all the circumstances, there was no adequate explanation for the delay in seeking to adjourn the hearing.
[7]
Was there a prospect of real prejudice if FTI was not joined?
[8]
In essence, the submission advanced as to why the final hearing should be delayed was that FTI was a necessary party because the relief sought against Ms Trenfield for breach of duty was also sought against FTI. For the following reasons, I did not accept that submission.
As has been explained, the existing case against Ms Trenfield concerns whether her employment arrangements with FTI, or the way in which Ms Trenfield renewed her registration as a trustee in bankruptcy (particularly as to her proposed employment arrangements), means that she must be removed as trustee on the basis of a conflict of interest or some form of fraud associated with her registration. In advancing that claim Mrs and Mr Frigger have repeatedly disavowed seeking any relief against FTI. Their position in that regard reflected the fact that the proceedings have been focussed upon removal of Ms Trenfield and seeking to recover from Ms Trenfield damages and an indemnity as to the costs of various proceedings and other relief on the basis of her alleged breach of duty in acting in a position of conflict by reason of her employment arrangements. Therefore, the existing proceedings which are listed for final hearing do not include claims to the effect that there is some form of joint liability on the part of FTI and Ms Trenfield in respect of the relief claimed. Accordingly, it is not the case that joinder of FTI is necessary for the conduct of these proceedings which have been conducted by Mrs and Mr Frigger for a considerable period expressly on the basis that they do not involve claims against FTI.
Nor is it the case that the proposed amendments the subject of the application for leave to appeal seek to introduce amendments to the existing claims in the proceedings. Rather, those amendments seek to introduce a whole new case of fraud as against Ms Trenfield and FTI in the conduct of the administration of their bankrupt estates in respect of which there is alleged to be shared liability. Importantly, the joinder of FTI was not sought to be justified on the basis that it was a necessary party to the existing claims. Rather, it was the new case that was said to give rise to the need to join FTI.
As to the proposed amendments, I found that there were serious deficiencies in that alleged case. In addition, I found that it was not appropriate to expand the existing scope of the proceedings to include those additional claims. As I said in delivering reasons on the First Adjournment Application at [30]:
[9]
... as has been mentioned, there is an existing claim to the effect that Ms Trenfield has undertaken and is undertaking her duties as trustee subject to the control of FTI, and the proposed new plea must be approached on the basis that it seeks to go further than that existing case. As has been explained, until this point, Mrs and Mr Frigger have disavowed any claim against FTI consequent upon allegations to the effect that FTI have controlled the actions of Ms Trenfield and the administration has been conducted for the benefit of FTI. The proceedings have reached the stage where they are ready for final hearing on the basis that the only relief sought based upon FTI's alleged control of Ms Trenfield is the relief sought against Ms Trenfield.
[10]
It followed, in my view, that the pending application for leave to appeal sought to rely upon a proposed new case to support the joinder of FTI. As I have noted, the case as presently pleaded has been advanced on the basis that relief is not sought against FTI. Further, as I have explained, the existing application has been on foot for almost two years and seeks to call into question the authority of Ms Trenfield to administer the bankrupt estates. Understandably, since the early stages of these proceedings, Ms Trenfield has been pressing for the prompt resolution of those claims which are framed in terms that seek to challenge the validity of her administration of the bankrupt estates. The evidence on the application was filed a considerable time ago.
Therefore, even if the application for leave to appeal succeeded, it would result in the introduction of a new case of a kind that concerns distinct issues. At best, the prejudice to Mrs and Mr Frigger will be the fact that they would be unable to include these further claims into the existing proceedings rather than pursuing them separately, assuming, of course, that there was a proper basis demonstrated to bring the proposed claims of fraud and the claims about administration of the bankruptcy insofar as it concerns the share portfolio.
[11]
In those circumstances, I concluded that the adjournment application must be declined. I did so because:
[12]
(1) the delay in bringing the second adjournment application was not adequately explained;
(2) there was no claim as currently pleaded that was formulated on the basis of joint liability on the part of Ms Trenfield and FTI;
(3) success on the interlocutory appeal would add claims for determination rather than affect the claims as currently pleaded;
(4) it is the proposed new claims that are said to justify the joinder of FTI;
(5) the proposed new claims raise distinct issues concerning aspects of the administration of the bankrupt estates not the arrangements in place as between Ms Trenfield and her employer, FTI, as to the administration;
(6) in the circumstances set out in (2) to (5), any prejudice was confined to having the new claims heard with the existing claims;
(7) the proceedings have been conducted by Mrs and Mr Frigger for a considerable period on the basis that the claims as currently pleaded do not require the joinder of FTI; and
(8) a further adjournment of the final hearing would result in considerable further delay in the determination of issues that were alleged to bear upon the validity of the administration of the bankrupt estates and the recission of the appointment of Ms Trenfield 'ab initio'.
[13]
I certify that the preceding twenty-eight (28) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Colvin.