Westpac Banking Corporation v Forum Finance Pty Limited (in liq) (Relief)

Westpac Banking Corporation v Forum Finance Pty Limited (in liq) (Relief) [2025] FCA 882 is a Federal Court judgment about remedies after liability had already been decided. It is not the main liability decision. Cheeseman J said these reasons concern the relief sought by three financiers after findings in their favour in the earlier liability judgment, and that the reasons assume familiarity with that earlier decision.

That procedural point matters. If you read this case as though it were the full story, you will miss important context. The relief reasons focus on what orders should be made once liability had been established, including tracing, declarations of trust, equitable subrogation, equitable compensation, cumulative remedies and pre-judgment interest.

For business readers, the case is a practical example of how far an asset recovery claim can reach once money has been misappropriated and moved through multiple entities and assets. The court was dealing with funds said to have been stolen or misappropriated, then traced through many transactions inside and outside the Forum group. The result was not limited to a simple money judgment. The court was prepared to recognise proprietary interests in assets and sale proceeds, and rights connected to property value and discharged mortgages.

The proceedings involved three financiers: Westpac Banking Corporation and Westpac New Zealand Limited, Societe Generale, and SMBC Leasing and Finance, Inc. The respondents included Forum Finance Pty Ltd (in liquidation), other Forum-related entities, and individuals including Basile Papadimitriou. The reasons also refer to related entities, properties, Bill Papas and Vince Tesoriero in the broader factual setting, but the relief judgment does not retell the whole liability narrative in full.

What the relief reasons do make clear is that the court was dealing with a large-scale tracing and recovery exercise. The financiers said their funds had been misappropriated and then moved through many transactions to different recipients and assets. The court referred to a related distribution proceeding brought by liquidators in connection with companies related to Forum, Bill Papas and or Vince Tesoriero and their related properties. In that separate proceeding, the liquidators sought judicial advice or direction about distributing assets under their control.

The reasons also show that the financiers and liquidators took a practical approach to tracing. Instead of insisting on a highly granular first in first out analysis, they proceeded on a pro rata basis where stolen funds from one or more financiers could be traced to a recipient bank account. The court recorded that the liquidators' tracing analysis identified the respective proportions of financier funding received by each respondent and that the liquidators intended, subject to judicial advice, to distribute remaining funds rateably among the financiers according to the amount of stolen funds traced to each asset pool.

The court accepted that this practical approach made sense in the circumstances. It noted there was no opposition to that course and that a more granular analysis would incur undue time and expense, would be unlikely to materially alter the distribution, and would erode the funds available for distribution. That is an important point for business readers. In complex fraud and insolvency matters, courts may prefer a sensible and strong tracing method over an expensive exercise in precision that does not change the commercial result.

The reasons give concrete examples of the kinds of assets and transactions in issue, at least in relation to Westpac's claims. They included a Grady White Freedom speedboat, Bel Air and Big Boss vehicles, the Atherton Road property, the purchase of shares in Autonomous Energy Pty Ltd by Iugis Investments, and the acquisition of Transition Print Pty Ltd. The court said it was satisfied to make declarations of trust over specified assets, or residual sale proceeds of those assets, where tracing evidence established the use of stolen funds.

The procedural history is unusually important here because it explains why the court dealt with final relief on the papers. After delivering the liability judgment, the court ordered a timetable requiring the parties to provide proposed short minutes of order, any additional evidence supporting those orders, and submissions. The process also required notice to interested parties of the final relief sought, the evidence relied on, and the submissions advanced, and allowed others to file written submissions either supporting or opposing the proposed orders.

Each financier complied with that process. Westpac served its proposed orders on 7 February 2025 and filed submissions on 21 February 2025. The reasons record that Westpac had received no indication that any active party opposed its proposed orders. There was also a separate issue about reinstating 1160 Glen Huntly Road Pty Ltd after deregistration, with ASIC ultimately confirming it did not oppose the reinstatement application subject to no order for costs against ASIC. That reinstatement issue was dealt with separately in Westpac Banking Corporation v Forum Finance Pty Limited (in liq) (Reinstatement) [2025] FCA 520.

SMBC served its proposed orders on 10 February 2025 and filed submissions on 25 February 2025. The reasons say SMBC had not received notification of opposition from any active party, apart from points of clarification requested by the liquidators and then addressed in written submissions. Societe Generale served proposed orders on 7 February 2025, filed supporting evidence on 13 February 2025, sent a revised copy of its proposed orders on 25 February 2025, and filed submissions on 21 February 2025. It also advised that it had not received notice of any opposition.

The matters were listed for a concurrent hearing on relief on 20 May 2025. But because there was no opposition by any active party to any of the financiers' proposed orders, the court determined the question of relief on the papers and excused the financiers from the hearing. Cheeseman J then made orders on 21 May 2025, with some variations on 23 May 2025 and 4 June 2025, and later published reasons on 1 August 2025.

One of those later variations is specifically identified in the reasons. After orders were made on 21 May 2025, SMBC sought a variation to include a further declaration recognising subrogation rights beyond those originally sought in its proposed orders. The court was satisfied that the variation was justified by the evidence, findings and principles already identified, and varied the orders nunc pro tunc on 23 May 2025. A further nunc pro tunc variation on 4 June 2025 corrected an internal cross-referencing error.

For business readers, this procedural history shows that once liability has been established and relief is properly notified, silence can be costly. If no active party opposes the proposed relief, the court may proceed on the papers and make detailed final orders without a contested hearing.

The central question in this judgment was what final relief should follow from the earlier liability findings. That included several related issues. First, whether the financiers were entitled to declarations of trust over identified assets or sale proceeds into which their funds had been traced. Secondly, whether tracing could extend to the whole of the increase in value of relevant assets where stolen funds, together with third-party loan money, had been applied to real property that was later sold at a profit. Thirdly, whether equitable subrogation should be recognised where misappropriated funds had been used to discharge secured debts over properties.

The court also considered what the reasons call improvement claims. Westpac and SMBC framed some proposed declarations by reference to contributions to the acquisition, maintenance and development or improvement of property. The court accepted that, applying the principles it identified, orders could recognise beneficial interests in properties and associated sale proceeds reflecting those contributions.

Another issue was whether the financiers' pursuit of both proprietary and personal remedies required an election between inconsistent remedies. The court accepted that it did not. The reasons say the proprietary and personal remedies sought were cumulative, not alternative or inconsistent, subject to the principle against double recovery. The court also referred to equitable compensation principles and to pre-judgment interest under section 51A of the Federal Court of Australia Act 1976.

Importantly, the judgment was not only about legal doctrine in the abstract. It was also about how to apply those doctrines sensibly in a complex insolvency and tracing setting. The court accepted a practical tracing methodology and emphasised that a sensible strong approach to fact finding was appropriate, including giving full effect to presumptions that arise against a wrongdoer. The reasons also note that a volunteer recipient of stolen money can be in no better position than the wrongdoer.

On the material available, the court made orders substantially in accordance with the proposed short minutes provided by each financier. The reasons state that the court was satisfied it was appropriate to make declarations of trust over specific assets, or the proceeds of sale of those assets, where the tracing evidence established the use of stolen funds from one or more financiers. The examples given in the reasons include assets purchased on behalf of Mr Papas or Mr Tesoriero, such as the Grady White Freedom speedboat and the Bel Air and Big Boss vehicles, as well as real property and transaction-based assets said to have been funded with Westpac money.

The court also accepted that, applying principles discussed in the related distribution judgment, the financiers were entitled to trace into the whole of the increase in value of relevant assets where stolen funds together with third-party loan money had been applied towards real properties later sold at an increased value. That is a significant point. It means the remedy was not confined to the original amount injected into the asset, at least in the circumstances addressed by the court.

On equitable subrogation, the court made declarations in the Westpac and SMBC proceedings recognising that those financiers were entitled to exercise equitable rights of subrogation in relation to properties, or sale proceeds of properties, where their stolen funds had been used to discharge secured debts over those properties. The reasons specifically note that SMBC later obtained a variation so that, in relation to 6 Bulkara Street, SMBC was recognised as subrogated to NAB's rights as registered mortgagee to the extent SMBC funds or traceable proceeds were used to discharge NAB's secured debt.

The court further accepted that some declarations could properly be framed by reference to contributions to the acquisition, maintenance and development or improvement of property. It also accepted that the financiers' pursuit of proprietary and personal relief did not involve inconsistent remedies requiring an election. Instead, those remedies were cumulative, subject to the rule against double recovery.

The published orders included substantial pre-judgment interest. The extract includes, for example, orders that pre-judgment interest of $78,435,756.23 be paid to Westpac Banking Corporation on an amount of $253,766,555.76 from the date of receipt of the funds up to 21 May 2025, and pre-judgment interest of NZD 14,491,793 be paid to Westpac New Zealand Limited on an amount of NZD 44,097,968.98 over the same period. Because the available text is truncated, the full detail of all respondent-specific orders should still be checked against the complete entered orders.

Most businesses will never be involved in litigation of this scale, but the operational lessons are very practical. The case shows that if money is misdirected, mixed, or used across entities without clear authority and records, the legal consequences can spread into assets, sale proceeds and property security arrangements. A business may think it is simply receiving funds, buying an asset, improving property or paying down debt. But if the source of funds is later challenged, those steps can become the basis for tracing and proprietary claims.

The court's acceptance of a pragmatic tracing approach is especially important. In a complex factual setting, a claimant may not need to prove every movement of every dollar with perfect precision if the evidence supports a sensible strong inference about where funds went. That does not mean records do not matter. It means poor records can make it easier for a court to accept practical tracing methods and presumptions that work against the wrongdoer and, in some cases, against volunteer recipients.

Businesses that use related entities should pay particular attention. If one entity receives funds, another entity acquires the asset, and a third entity benefits from debt reduction or property improvement, the group structure may not prevent a claimant from following the money. Labels in accounting systems or informal director instructions will not necessarily protect the business if the underlying source and use of funds cannot be justified.

Property transactions are another clear risk area. The reasons show that claims may extend not only to the original funds used in a purchase or improvement, but also to sale proceeds, increases in value and rights connected to discharged mortgages. If your business uses borrowed money to acquire, maintain, develop or improve property, or to repay secured debt, keep records that clearly connect the source of funds to the transaction and the authority for using them in that way.

Finally, the procedural history is a reminder that litigation risk does not stop at liability. Once a court has found liability, the relief stage can be commercially decisive. If your business is a respondent, or holds assets that may be affected, you need to engage early with proposed orders and evidence. If you do not, the court may determine relief on the papers and make detailed orders without a contested hearing.

The primary source is the Federal Court of Australia decision Westpac Banking Corporation v Forum Finance Pty Limited (in liq) (Relief) [2025] FCA 882. The reasons state that they concern final orders consequential on the earlier liability judgment, Westpac Banking Corporation v Forum Finance Pty Limited (in liq) (Liability) [2024] FCA 1176, and that familiarity with that judgment is assumed. The reasons also refer to Preston, in the matter of the Forum Group of Companies Pty Ltd (in liq) [2025] FCA 883, described as the distribution judgment.

The published reasons record that judgment orders were made on 21 May 2025, with reasons published on 1 August 2025, and that some variations were made on 23 May 2025 and 4 June 2025. The extract available for this page is truncated. Because of that, some details of the factual narrative and the full scope of the final orders should be checked against the complete judgments and entered orders on the Commonwealth Courts Portal before relying on this page for detailed respondent-by-respondent analysis.