Frigger v Trenfield

1. The hearing dates for the trial of these proceedings to commence on 10 February 2025 be vacated.
2. The final hearing of all issues other than the quantum of any loss and damage or compensation be listed for 5 days commencing on 9 June 2025.
3. The interlocutory application dated 3 February 2025 be otherwise dismissed.
4. Costs of the interlocutory application and any costs thrown away by reason of the adjournment of the trial are to be paid by the applicants in any event. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

COLVIN J: 1 Ms Kelly-Ann Trenfield is the trustee of the bankrupt estates of Mrs Angela Frigger and Mr Hartmut Frigger. They have been discharged from their bankruptcy, but the administration of their bankrupt estates is ongoing. 2 Ms Trenfield is an employee of FTI Consulting (Australia) Pty Ltd (FTI). For some time, work required to be undertaken in the course of the administration of the estates has been performed by Ms Trenfield as well as by other employees of FTI. The nature of the arrangements between Ms Trenfield and FTI concerning work that is required to be undertaken as part of the administration of the bankrupt estates, as well as the extent of the allocation of work as between Ms Trenfield and other employees of FTI, are matters that are in issue in these proceedings. However, it can be observed that much of the work that has been undertaken in the administration of the estates has involved the defence of proceedings brought by Mrs and Mr Frigger concerning the nature and extent of the assets that form part of the estate. There has also been other litigation brought by Mrs and Mr Frigger concerning the bankrupt estates in which Ms Trenfield has been involved. 3 In June 2023, after various proceedings had concluded and orders had been made for legal costs incurred by Ms Trenfield to be paid out of the estates, Mrs and Mr Frigger commenced proceedings seeking the removal of Ms Trenfield as trustee. In addition to an order for removal, they claimed orders that Ms Trenfield and FTI reimburse remuneration or income from their bankrupt estates. They also claimed orders to the effect that Ms Trenfield and FTI were personally liable for all the costs of the legal proceedings that had been brought by Mrs and Mr Frigger. There was also a claim that Ms Trenfield and FTI 'make good losses' that the bankrupt estates had allegedly sustained 'because of a breach of duty' by Ms Trenfield. 4 It is the position of Ms Trenfield that although liabilities have been incurred for work done by FTI there have been no payments made to FTI. Ms Trenfield has communicated to the Court her intentions as to the obtaining of approvals in due course as to fees and remuneration, including as to work undertaken by FTI. 5 Issues arose as to whether FTI was a necessary party to the proceedings given the terms of the relief sought. Mrs and Mr Frigger made clear that no relief was sought against FTI: see Frigger v Trenfield (Application to Amend) [2024] FCA 508 at [14]-[16]. Since then, the proceedings have been conducted on the basis that they are advanced only against Ms Trenfield. Nevertheless, there have been appearances from time to time for FTI in relation to attempts by Mrs and Mr Frigger to obtain documents from FTI. 6 In May 2024, the Court heard and determined an application by Mrs and Mr Frigger to further amend their statement of claim and their originating application. Until those amendments were sought, the proceedings had focussed on the terms upon which Ms Trenfield had been employed by FTI and the circumstances of her registration as a trustee in bankruptcy. The extent of the amendments sought by Mrs and Mr Frigger at that time were summarised in reasons given on the application (noting that amendments that were not objected to were allowed and in one limited respect an aspect of the contentious amendments was allowed): Frigger v Trenfield (Application to Amend) at [20]. 7 Significantly, the amendments proposed at that time would have expanded the proceedings to introduce various complaints as to the manner in which the administration had been conducted. In particular, they sought to introduce complaints about the way in which Ms Trenfield handled a portfolio of shares that had been determined to form part of the bankrupt estates (as to the determination by this Court that the portfolio formed part of the assets of the estates: see the summary in Frigger v Trenfield (Application to Amend) at [1]. 8 At the time of that earlier amendment application, I observed as follows (at [22]-[23]): … this is not an instance where Ms Trenfield, in opposing the amendments, suggests that Mrs and Mr Frigger will be unable to bring proceedings (assuming them to be competent) in which they raise issues as to the administration of the bankrupt estates based upon complaints as to matters that are unrelated to the terms upon which Ms Trenfield is employed by FTI or the circumstances of her registration as a trustee. Rather, the course for which Ms Trenfield contends is to confine the existing proceedings to the controversy presently addressed by them. 9 The submission for Ms Trenfield on that occasion was that the proposed amendments 'would introduce a raft of new issues…of a kind that would fundamentally alter the nature of the proceedings and be likely to cause delay to and prejudice the prompt administration of the estates': at [19]. 10 The submissions for Ms Trenfield were substantially accepted. That is to say, the amendment application was determined on the basis that these proceedings should be confined to the controversy as to whether the arrangements between Ms Trenfield and FTI, or the basis upon which she had obtained her registration as trustee, or both, were reasons why she should be removed as trustee and the further relief sought by Mrs and Mr Frigger should be granted. 11 Amendments to the statement of claim that were not opposed as well as one further amendment were allowed. Otherwise, as I have indicated, the amendment application was refused. At the same time, I also made orders to the effect that no further documents should be filed in the proceedings unless an order had been made requiring the document to be filed or leave of the case managing judge had been given to file the document. 12 On 25 June 2024, I made orders for the filing of an amended defence and any amended reply as well as a timetable for the filing of affidavit evidence. I also provisionally listed the final hearing of all issues other than the quantum of any loss and damage or compensation for five days commencing on 10 February 2025. 13 On 23 October 2024, I made orders for the filing of outlines of submissions and confirmed that the matter was set down for final hearing for five days commencing 10 February 2025. Submissions have since been filed. 14 At a case management hearing on 30 January 2025, I refused an application by Mrs and Mr Frigger for subpoenas to be issued to employees of FTI on the basis that it had not been demonstrated that the documents sought were of sufficient relevance to the issues in the proceedings. At the time Mrs and Mr Frigger foreshadowed that they would seek to amend the proceedings, in effect, to raise issues that would mean (on their submission) that the documents sought would be relevant. They also indicated that they may need to seek an adjournment of the final hearing on the basis that Mrs Frigger was imprisoned, and she faced considerable difficulties in being able to prepare for the hearing. Whether the adjournment was to be sought depended upon whether Mrs Frigger would be released on parole in the next few days. 15 Mrs and Mr Frigger conduct these (and other) proceedings on their own behalf, as is their right. I have had occasion to preside at many hearings in which they have acted on their own behalf. They are very experienced litigators. They have considerable familiarity with the processes of the Court, the preparation of affidavits and submissions, and the presentation of evidence. Although they are not legally trained, they have demonstrated considerable ability to research points of law and present arguments based upon a consideration of the relevant authorities. Usually, the detailed arguments have been prepared and presented by Mrs Frigger. However, Mr Frigger has also participated in many hearings. 16 Recently, Mrs and Mr Frigger indicated that they wished to bring an interlocutory application seeking the following orders: 1. Trial to commence on 10 February 2025 be vacated. 2. FTI Consulting Pty Ltd be joined as second respondent. 3. The Applicants have leave to further amend the re-amended statement of claim. 4. The subpoenas of Maria Duta and Paris Parasadi be reconsidered 17 The application was supported by an affidavit in which Mr Frigger deposed that Mrs Frigger is subject to severe restrictions whilst imprisoned. Those restrictions as explained to the Court by Mrs Frigger on 30 January 2025 include lock down on many days for 23 hours a day without access to any materials, no access to a computer or internet, and cancellation of visits by Mr Frigger. Mr Frigger says that Mrs Frigger will be eligible for parole on 8 March 2025. 18 A proposed further re-amended statement of claim was provided to the Court. It proposed the joinder of FTI as a party to the proceedings and sought to make the following additions to the statement of claim: (1) Particulars of an existing allegation (para 12) to the effect that Ms Trenfield and FTI executed an employment agreement when FTI purchased Korda Mentha Qld. The particulars refer to particular aspects of the employment agreement. (2) A new plea (as para 12A) to the effect that FTI 'fraudulently took over control from the official trustee of the Applicants' estates'. The plea is said to be based upon earlier pleas to the effect that Ms Trenfield provided a declaration of independence to the creditors of the estate 'that contained false statements' and the particulars to be added concerning aspects of the employment agreement. (3) Detailed particulars to proposed new para 12A listing various things allegedly done in the course of the administration, particularly matters in relation to the administration of the share portfolio. (4) A plea based upon para 12A to the effect that Ms Trenfield and FTI 'deliberately and fraudulently delayed and/or prevented the resolution and termination of the Applicants' bankruptcy'. (5) A plea (para 28A) that in its report to creditors FTI admitted it is a related entity of Trenfield. (6) An expansion of the relief to include FTI. 19 I gave leave for the interlocutory application and associated papers to be filed. The interlocutory application was listed for hearing on an urgent basis. After hearing the parties, I determined that there should be no leave to amend the proceedings in the terms sought and that, consequently, the applications to join FTI and for leave to issue the proposed subpoenas should be refused. I upheld the application to adjourn the final hearing. At the time of making those orders I indicated that I would provide my reasons. These are my reasons.