Full Federal Court upholds freeze over trust assets linked to alleged $158M Keystone misappropriation

A Full Federal Court panel has upheld freezing orders over trust-owned real estate and luxury cars connected to Robert Filippini, rejecting an attempt to narrow the Federal Court’s power to freeze assets held by third-party trustees where a prospective judgment debtor controls discretionary trusts.

Robert Filippini is the first appellant in Filippini v Keystone Asset Management Limited, and a respondent in the underlying Keystone proceedings. He is married to Dimitra Filippini and was the sole director of City Built Pty Ltd and Force 1 Security Pty Ltd, and from 15 December 2023 was also a director of Force 1 Constructions Queensland Pty Ltd.

In the underlying case, Keystone alleges that at least $158 million was paid by Chiodo Corporation and Keystone to accounts held by City Built and Mr. Filippini, in circumstances where there were no written contracts and no tenders or quotations for the relevant work. Keystone alleges that City Built and Mr. Filippini received payments for work or expenses that were not performed or incurred, and that the funds were dishonestly appropriated as part of a fraudulent design with Paul Chiodo and Chiodo Corporation.

Justices Beach, Button and Younan granted leave to appeal but dismissed the appeal, leaving in place freezing orders made in September 2025 over two properties and four cars held by trustees of discretionary trusts. The disputed assets included the Chapel Street property held by Dimitra Filippini as trustee of the A&M Trust, the Lygon Street property held by her as trustee of the R&D Trust, and three Lamborghinis and a Maserati held by FPC Vic Pty Ltd as trustee of the FPC Vic Trust.

The orders were obtained by Jason Tracy and Glen Kanevsky of A&M as liquidators of Keystone Asset Management Limited, in proceedings alleging that Mr. Filippini and City Built Pty Ltd misappropriated at least $158 million linked to the Shield Master Fund and the Australian Diversified Property Fund. Keystone alleges payments were made to City Built and Mr. Filippini without written contracts, tenders or quotations, and that City Built invoiced Chiodo Corporation for approximately $142 million for works that were not in fact performed or expenses that were not incurred.

The appeal focused on whether the Federal Court could make third-party freezing orders under rule 7.35(5) of the Federal Court Rules over assets held in discretionary trusts where Mr. Filippini was not the legal or beneficial owner of the underlying trust property. The appellants argued that trust assets could not be treated as assets “of” Mr. Filippini merely because he controlled the trusts, and that Keystone needed to identify a clear enforcement pathway showing the assets could ultimately be used to satisfy any judgment.

The Full Court rejected that construction, holding that the rule is not confined to assets beneficially owned by the judgment debtor or prospective judgment debtor. The Court emphasized that freezing orders operate in personam and are designed to prevent frustration of the Court’s process, not to give a plaintiff security for its claim. It also held that the rule’s reference to assets, including “claims and expectancies”, captures more than conventional legal or beneficial ownership.

The Court found that Mr. Filippini had more than the ordinary expectancy of a discretionary beneficiary. He was a beneficiary of each trust, had the power as appointor to replace the trustee, could appoint himself as trustee, could accelerate the vesting date and, in the case of at least two trusts, could direct capital and income to himself. The Court said that level of control gave his expectancy significant value, making it something worth preserving through a freezing order.

The Court also relied on practical control findings made by the primary judge, including evidence that Mr. Filippini had operated accounts connected with another trust without consulting the trustee, may have signed business activity statements for the trustee of the R&D Trust and used shared email arrangements that made it unclear who was instructing the accountant. Those findings supported the conclusion that he could direct the application of trust assets as though they were his own.

The judges were careful not to collapse the distinction between control and ownership. They said the decision did not offend orthodox trust law because it did not hold that Mr. Filippini owned the trust assets. Instead, the relevant asset for rule 7.35(5) purposes was his valuable expectancy as a beneficiary with extensive powers of control, while the freezing orders had to attach to identifiable trust assets to preserve the value of that expectancy.

The Court also rejected the appellants’ “enforcement pathway” argument. While accepting that a freezing order must have utility and that assets should not be frozen where there is no conceivable prospect they could contribute to satisfaction of a judgment, the Court held that rule 7.35(5)(a) does not require a clear, fully developed enforcement path in every case. The judges noted that a trustee in bankruptcy’s ability to deal with a bankrupt’s powers as appointor or related rights in a discretionary trust raises complex questions that need not be finally resolved on a freezing order application.

The Court concluded that the trustees were in a position of control or influence concerning Mr. Filippini’s expectancies, and that freezing the properties and cars was an appropriate way to prevent those expectancies from being stripped of value. The result confirms that, in Australian insolvency and asset recovery litigation, discretionary trust structures may not shield assets from freezing orders where the alleged wrongdoer has practical and legal control over the trust machinery.

Read the full decision here.

Professionals involved:

• Kathleen Foley SC of List G Barristers, Colleen Mintz of the Victorian Bar and Leo Freckelton of List G Barristers, counsel, and Norton Rose Fulbright, solicitors, for Keystone and the liquidators

• Christian Juebner KC of the Victorian Bar and Michael O’Haire of the Victorian Bar, counsel, and Corrs Chambers Westgarth, solicitors for Robert Filippini et al.