Three Lamborghinis and a Maserati – The Federal Court of Appeal Clarifies the Rules on Freezing Orders in Respect of Non-Parties and Trusts

Despite this, it can often be difficult for liquidators, trustees and other insolvency practitioners to recover assets under the control of others (non-parties to litigation for example), which would otherwise be available to satisfy a creditor or satisfy a judgment against the contravening parties.

As Kirby J stated in Cardilev LED Builders Pty Ltd [1999] HCA 18; 198 CLR 380 (Cardile) at [115]:

Today it is much easier than was previously the case to transfer assets quickly both nationally and internationally. Electronic networks facilitate a dishonest party's frustration of the enforcement of a court's judgment once enter… the schemes which debtors may devise for divesting themselves of assets are legion. The novelty of such schemes is no objection to the validity of an order seeking to arrest the process.

However, the Full Federal Court’s recent decision in the case of Filippini v Keystone Asset Management Limited (Receivers and Managers appointed) (in liquidation) [2026] FCAFC 71; 316 FCR 159 (Keystone Appeal Decision) demonstrates that, in certain circumstances, freezing orders can extend to trusts and parties exercising control over the assets of the trust.

What is a Freezing Order?

In the Federal Court, in accordance with r 7.32(1) of the Federal Court Rules 2011 (Cth) (the Rules), the Court may make a freezing order for the purpose of preventing the frustration or inhibition of the Court’s process by seeking to meet a danger that a judgment (prospective or otherwise) will be wholly or partly unsatisfied (see MG Homes Pty Ltd v Grocorp Homes Pty Ltd [2026] FCA 1090)

Further, a freezing order may be an order restraining a respondent from removing any assets located in or outside Australia or from disposing of, dealing with, or diminishing the value of, those assets (See r 7.32(2) of the Rules)

The wording of rr 7.32(1) and 7.35(5) is likewise replicated in regs 25.11 and 25.14 of the Uniform Civil Procedure Rules 2005 (NSW).

An applicant seeking afreezing order:

1. mustsatisfy a court that there is a real risk that the assets necessary to satisfy judgment will be dissipated, otherwise interim orders will be dissolved; and

2. is not required to show an intention by the respondent to evade a judgment or frustrate a court’s processes, but rather that the course, objectively speaking, is calculated to have that effect (See Samimi v Seyedabadi; Seyedabadi v Samimi [2013] NSWCA 279 at [74]).

Where a freezing order is made on an ex-parte basis, and it is later found that the applicant failed to give full and frank disclosure, a freezing order may be set aside. See for example Print Management Australia Pty Ltd v Pasupati [2008] NSWSC 342 in which the plaintiff failed to disclose that it had lodged a caveat on title and therefore failed to disclose that a significant form of a restraint existed in respect of a major asset.

Can a Freezing Order be made against a Third Party?

In certain circumstances, a Court can grant a freezing order the effect of which is to restrain a party, or a third party (which can be a non-party to a proceeding) from disposing of assets that may otherwise be available to satisfy a judgment.

The third party will not necessarily be a party to the substantive proceeding but will be a respondent to the application for the freezing or ancillary order (see Supreme Court  Practice Note SC Gen 14).

The Court may make an order in the following circumstances (See r 7.35(5) of the Rules and reg 25.14 of the UCPR and Cardile at [57]):

(a) There is a danger that a judgment or prospective judgment will be wholly or partially unsatisfied because:

i. the party holds, is using, has exercised or is exercising a power or disposition over the assets (including claims or expectancies) of the judgment debtor or prospective debtor; and

ii. the third party is in possession of or is in a position of control or influence in respect of assets (including claims and expectancies) of the judgment debtor or prospective debtor.

(b) a process in the Court may (or is) available to the applicant as a result of ajudgment or prospective judgment, under which, the third party may be obliged to disgorge assets or contribute towards the judgment.

Finally, nothing in the above rule affects the power of the Court to make a freezing order or ancillary order if the Court considers it is in the interests of justice to do so (see r 7.35(6) of the Rules).

Can Trusts be subject to Freezing Orders?

In the Keystone Appeal Decision the Full Federal Court considered, amongst other things, whether a freezing order (and ancillary orders) could be made against trusts (in that case R&D Trust, the A&M Trust and  FPC Vic Trust).

Facts

The facts of this case are summarised below:

1. On or about 8 August 2025, Keystone Asset Management Limited (Receivers And Managers Appointed) (In Liquidation), the respondent to the appeal, applied to vary freezing orders made against the first to seventh appellant’s property in Australia up to an unencumbered value of $158 million, being the sum of the amounts said by Keystone to have been misappropriated by Mr Robert Filippini, the first appellant, amongst others.

2. Ms Dimitra Filippini, the second appellant was the wife of Mr Filippini and was the trustee of the A&M Trust and the R&D Trust, the owner of a number of properties and was a respondent in the substantive proceeding.

3. PC Vic Pty Ltd (FPC) the third appellantin this case, in its capacity as trustee of the FPC Vic Trust, was the owner of four vehicles, being three Lamborghinis and a Maserati and was not a respondent in the substantive proceeding.

First Instance Decision

In the first instance decision, of Keystone Asset Management Limited (Receivers and Managers appointed) (in liquidation) v Filippini (No 2) [2025] FCA 1138 (First Instance Decision), Moshinsky J found that:

1. Mr Filippini exercised significant control over the trusts and their assets, including transferring large sums of money from accounts held by Mrs Filippiniin her capacity as trustee, without her consultation;

2. An inference could be drawn that the affairs of the R&D Trust and the A&M Trust were conducted in a similar manner, that is, by Mr Filippini without consultation with Mrs Filippini;

3. There had been an intermingling of assets without any clear delineation between the Filippini parties to an extent which it was not safe to proceed on the basis that the respondents were entitled only to the assets held in their name; and

4. There was a good arguable case that the assets of R&D Trust and the A&M Trust could be applied in accordance with Mr Filippini’s directions as if they were his own assets.

Interestingly, there was no suggestion in this case that any of the real property held by the trusts or the four cars were acquired with misappropriated funds.

The Full Federal Court Decision

The Full Federal Court in this case considered the cases of Deputy Commissioner of Taxation v Vasiliades [2014] FCA 1250; 323 ALR 59 (Vasiliades) and Australian Securities and Investments Commission v Carey (No 6) (2006) 153 FCR 509 (Carey No.6).

In Vasiliades the Court granted freezing orders to the tune of  $29.98 million (being the value of the tax liabilities owed) and restrained Mr Vasiliades from exercising any power of distribution in respect to the trust, in the following circumstances:

1. The Court adopted French J’s finding in Carey (No. 6) at [37], that a beneficiary who controls a trustee’s power of selection because he or she is the trustee or one of them and/or has the power to appoint a new trustee has something akin to a general power and the ownership of the trust property; and

2. The Court held that there was a good arguable case that it could be said that Mr Vasiliades had a contingent interest of the kind identified by French J in Carey (No. 6).

Likewise, the Court in the Keystone Appeal Decision held that Mr Filippini’s control coupled with his status as beneficiary meant that he had something approaching a general power and the ownership of trust property. However, the Court held that is not to say that the word “approaching” should be construed as to mean that Mr Filippini owned the trust assets, and that ownership of assets must be distinguished from control of assets.

The Court concluded that r 7.35(5)(a) was enlivened on the basis that: (1) Mr Filippini had an expectancy in relation to each trust, (2) the trustees of the three trusts were in a position of control or influence concerning the assets of Mr Filippini, being those expectancies and (3) Mr Filippini had extensive control of the assets showing those expectancies to have real value.

Other Options?

Arguably, given the legal constraints (and likely costs) associated with obtaining freezing orders, a receivership may be a more practical and commercial solution.

As Peter Devonshi restates in Freezing Orders Disappearing Assets and the Problem of Enjoining Non Parties” (2002) 118 Law Quarterly Review 124 at page 9, states:  

The appointment of areceiver enables the court to intervene actively in the defendant's affairs. As such it represents a pragmatic attempt to unravel deception while conferring effective control over some or all of the defendant's assets… As a result, active steps can be taken to manage and preserve an asset. So, for example, if the defendant has a controlling shareholding in a company which in turn holds assets, the court may assume control of the company's operations by appointing a receiverover the shares… If assets are vested in the defendants or held for them by non-parties, it follows that they must be surrendered in accordance with the order. If parties fail to do so without cause, it is open to the receiver to seek enforcement through the court.

In practice, freezing orders have their limitations, including the evidentiary burden that is required to be met to obtain the relief, as well as the cost of such applications. Accordingly, the appointment of a receiver may be a more effective means of preserving and protecting assets and limiting the dissipation ofassets.

The evolution in the case law in this area including in the Keystone Appeal Decision demonstrates a desire by the Courts to ensure that the Court’s processes and the administration of justice is not eroded or circumvented by parties who attempt to hide assets and frustrate the Court’s processes including by holding assets in complicated corporate and tax structures, or by transferring assets to third parties. Ultimately, as Devonshire argues the Court’s must be “as nimble as the machinations they are intended to combat.”

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