Filippini v Keystone Asset Management Limited (Receivers and Managers appointed) (in liquidation) [2026] FCAFC 71

This appeal came out of a substantial commercial proceeding in which Keystone alleged that about $158 million had been misappropriated by Robert Filippini and City Built Pty Ltd. City Built was said to be a company of which Mr Filippini was the sole director. The broader allegations involved payments moving through fund and property structures connected with the Shield Master Fund, the Australian Diversified Property Fund and Chiodo Corporation.

The Full Federal Court did not decide whether those underlying allegations were true. The appeal was about a narrower but commercially significant question. Keystone had obtained freezing orders over a long list of assets up to the amount of the alleged misappropriation. Some of those assets were not held personally by Mr Filippini. They were held by trustees of discretionary trusts connected with him. The issue was whether those trust-held assets could remain subject to the freezing orders.

The disputed assets were two properties and four vehicles. The properties were the Chapel Street property and the Lygon Street property. The vehicles were three Lamborghinis and a Maserati. The Court noted that these assets were among a much longer list of bank accounts, real properties and vehicles covered by the orders.

A striking feature of the case is that Keystone did not allege that the two properties and four vehicles had been bought with misappropriated money. The Full Court expressly recorded that there was no such suggestion and that the assets had been acquired before the alleged misappropriations began. That matters because it shows the appeal was not a simple tracing case.

Instead, the controversy was about control. The A&M Trust and the R&D Trust held the two properties, with Mrs Filippini as trustee. The FPC Vic Trust held the vehicles through FPC Vic Pty Ltd as trustee. Mr Filippini was the appointor of the trusts. He was also the sole shareholder of FPC, although the sole director of FPC was an accountant, Mr Traficante of Bellmonts Accountants and Advisors Pty Ltd.

During the hearing, the appellants accepted a series of important propositions about the A&M Trust. Mr Filippini was one of the principal beneficiaries. As appointor, he could remove and appoint the trustee. He could appoint himself trustee. He could then distribute all income of the trust to himself. He could accelerate the vesting day. He could direct all the capital of the trust to himself. Because the A&M Trust deed and the FPC Vic Trust deed were in the same terms, the Court said the same necessarily followed for the FPC Vic Trust.

Those powers did not automatically make the trust assets his personal property. But they were highly relevant to whether the Court could restrain dealings with those assets to prevent frustration of a future judgment.

The Full Court placed real weight on the primary judge's factual findings about how the trusts and related assets were actually being handled. Those findings were not challenged on appeal. That is important because the legal arguments had to be considered against that factual background.

The primary judge had found that Mr Filippini made a series of transfers of large sums from an account in Mrs Filippini's name as trustee for the Filippini Investment Trust to other family members, and that he did so without consulting Mrs Filippini. The primary judge inferred from that conduct that the affairs of the R&D Trust and the A&M Trust may be conducted in a similar way, namely by Mr Filippini without consulting her.

The primary judge also found evidence of intermingling of assets among the Filippini respondents to such an extent that it would not be safe to proceed on the basis that each person was entitled only to assets in his or her own name. The picture described by the primary judge was one of assets being mixed together without clear delineation.

There were also findings about BAS documents. A signing log for two BASs lodged by the R&D Trust suggested that the documents were executed by Mr Filippini. Although an explanation had been offered, it raised further concerns. The accountant communicated with Mrs Filippini through an email account used jointly by Mr and Mrs Filippini, making it difficult to know who was actually providing instructions in relation to the trust's affairs. The primary judge concluded there was some doubt whether Mrs Filippini had in fact signed the BASs.

On that material, the primary judge found a good arguable case that the assets of the R&D Trust and the A&M Trust may be applied in accordance with Mr Filippini's directions as if they were his own assets. The same inferences were found to be available in relation to the FPC Vic Trust.

The appeal centred on the construction of rule 7.35(5) of the Federal Court Rules 2011 (Cth), read with the broader power in section 23 of the Federal Court of Australia Act 1976 (Cth).

Section 23 gives the Court broad power, in matters within its jurisdiction, to make orders of such kinds, including interlocutory orders, as the Court thinks appropriate. The Court described that as a broad power, subject to the requirement that the order relate to a matter within jurisdiction and be considered appropriate.

Division 7.4 of the Federal Court Rules deals with freezing orders. Rule 7.32 states the purpose of a freezing order. It is to prevent the frustration or inhibition of the Court's process by addressing a danger that a judgment or prospective judgment will be wholly or partly unsatisfied. Rule 7.34 makes clear that a freezing order may be made against a person even if that person is not a party to the substantive proceeding.

Rule 7.35(4) deals with freezing orders against judgment debtors or prospective judgment debtors. Rule 7.35(5) deals with freezing and ancillary orders against third parties. Under rule 7.35(5)(a), the Court may act if satisfied that there is a danger that a judgment or prospective judgment will be wholly or partly unsatisfied because the third party holds or is using, or has exercised or is exercising, a power of disposition over assets of the judgment debtor or prospective judgment debtor, or is in possession of, or in a position of control or influence concerning, those assets. Rule 7.35(5)(b) also addresses situations where a court process may ultimately be available under which the third party may be obliged to disgorge assets or contribute toward satisfying the judgment.

Rule 7.35(6) was also significant. It says that nothing in the rule affects the Court's power to make a freezing order or ancillary order if the Court considers it is in the interests of justice to do so. The Full Court said this avoids any prospect that the specific rules narrow the full amplitude of the Court's power under section 23.

The appellants argued for a narrow reading of rule 7.35(5)(a). They said the Court's power to make a freezing order against a third party only arises in respect of assets that are assets "of" the judgment debtor or prospective judgment debtor, and that this should be understood as meaning assets beneficially held by that person. On that approach, trust assets could not be frozen merely because the alleged debtor controlled the trusts.

They also advanced what the Court called the "enforcement pathway" argument. They said that where assets are held by a third party, those assets can only be frozen if there is a good arguable case that the assets may later be reached by compulsion in enforcement proceedings after judgment.

Keystone argued for a broader reading. It said rule 7.35(5)(a)(i) and (ii) are gateway provisions that enliven the Court's power to make freezing orders against third parties, but do not confine that power so that it may only be exercised over assets beneficially held by the alleged debtor.

This distinction sits at the centre of the appeal. A trustee usually holds legal title to trust property. Beneficiaries may have beneficial interests, but in a discretionary trust those interests can be more limited or contingent until the trustee exercises powers of distribution. The appellants relied on that distinction and said the trust assets were not assets "of" Mr Filippini because he did not beneficially own them.

The Full Court did not say that legal and beneficial ownership are irrelevant. Nor did it say that trust property simply becomes personal property because a person has influence over the trust. What the Court rejected was the proposition that third-party freezing orders are confined only to assets beneficially owned by the alleged debtor.

The Court's reasoning, as far as the published extract shows, was tied to the purpose of freezing orders. The question is whether there is a danger that the Court's process will be frustrated and a judgment will go unsatisfied. In that context, the Court treated practical control, powers of disposition, and the ability to direct the application of trust assets as highly relevant. The Court also referred to High Court authority recognising that freezing relief is not limited to direct dealings with a person's legal or beneficial interests in identified property. It can extend to schemes or arrangements that may frustrate the Court's process.

For business readers, the point is simple. Legal title in a trustee and the absence of straightforward beneficial ownership by the alleged debtor do not necessarily end the freezing order analysis.

The Full Federal Court granted leave to appeal because the case raised important questions of wider application concerning freezing orders and assets held in discretionary trusts. But the appeal itself was dismissed.

The Court said the appellants' arguments had to be rejected. It held that those arguments misconstrued rule 7.35 of the Federal Court Rules and sought unduly to constrain section 23 of the Federal Court of Australia Act. The Court therefore rejected the narrow proposition that third-party freezing orders are available only in respect of assets beneficially held by the judgment debtor or prospective judgment debtor.

The Court also rejected the appellants' enforcement pathway argument in the form advanced. The extract makes clear that the Court did not accept that the availability of freezing relief over third-party held trust assets depended on first showing a good arguable case that those assets could later be reached by compulsion in enforcement proceedings.

On the facts, the unchallenged findings about Mr Filippini's powers and practical control over the trusts were enough to support the continuation of the freezing orders over the two properties and the four vehicles. The Court also ordered the appellants to pay Keystone's costs of and incidental to the leave application and the appeal.

This decision will matter most to businesses that use discretionary trusts to hold valuable assets while operating through companies or family groups. Many Australian businesses do this for legitimate commercial, tax, succession or asset management reasons. The case does not say those structures are ineffective. It does say that, in litigation, courts may look closely at who really controls the structure and whether assets can in practice be directed by one person.

If one founder, director or family member is the appointor across multiple trusts, can replace trustees, can appoint themselves, and in practice gives instructions, moves money and treats trust assets as available for personal direction, that can create real exposure to freezing relief. The risk increases if records are poor, funds are mixed, or advisers cannot clearly identify who is acting for the trustee.

Equally, the case is a reminder that freezing orders are protective, not punitive. The Court was concerned with preventing frustration of its process, not with giving Keystone security for a judgment. That means the focus is on risk, control and practical ability to deal with assets before the substantive claims are finally decided.

Although every case turns on its own facts, the published reasons highlight several features that can make trust-held assets more vulnerable to freezing orders. One is concentrated control, especially where the same person is appointor and can replace the trustee or appoint themselves. Another is evidence that the trustee is not acting independently in practice. A third is intermingling of assets or informal transfers that make it difficult to see clear boundaries between personal, company and trust property.

Businesses should also note that the Court was prepared to look at operational details, not just formal trust deeds. BAS signing practices, email arrangements, and the way instructions were given to accountants all mattered. That is a practical warning. Governance failures often show up in routine administration long before they appear in court.

The appeal was heard on 12 March 2026. The last submissions date recorded in the reasons was 26 March 2026. Judgment was delivered on 22 May 2026. The appeal was from the primary decision in Keystone Asset Management Ltd (Receivers and Managers appointed) (in liquidation) v Filippini (No 2) [2025] FCA 1138.

The Full Court granted leave to appeal, dismissed the appeal and ordered the appellants to pay Keystone's costs of and incidental to the leave application and the appeal.

This page summarises the published reasons extract for Filippini v Keystone Asset Management Limited (Receivers and Managers appointed) (in liquidation) [2026] FCAFC 71. The extract clearly identifies the parties, the disputed trust assets, the rules and statutory provisions considered, the key factual findings relied on, and the outcome of the appeal.

The available text is truncated near the end. For that reason, this page stays close to the points expressly stated in the published extract and does not go beyond them.