Short answer: Yes. In Filippini v Keystone Asset Management Limited [2026] FCAFC 71 (22 May 2026), the Full Federal Court of Australia confirmed that a discretionary family trust is not a safe harbour for a judgment debtor who controls it. Where the debtor pulls the strings, acting as appointor with the power to hand themselves the trust's income and capital, a court can freeze the trust's assets to protect a creditor's eventual judgment. Control, not legal ownership, is what counts.
Here's how the Court got there, and why it matters.
The Facts
Keystone managed the Shield Master Fund and acted as trustee of the Australian Diversified Property Fund. Between April 2022 and September 2024, about $305 million flowed from those funds to Chiodo Corporation. Keystone alleged that at least $158 million was misappropriated through payments to City Built Pty Ltd and to Robert Pissini personally.
At the centre of the case sit three discretionary trusts: the A and M Trust, the R and D Trust, and the FPC Vic Trust. Mr Filippini is the beneficiary and appointor of each. Mrs Filippini is trustee of two of them. Mr Filippini controls FPC, the corporate trustee of the third.
One important point: none of the disputed assets were bought with the allegedly misappropriated funds. The assets predate the alleged misappropriations.
The Freezing Order
In September 2025, the primary judge froze a range of trust-held assets up to the $158 million quantum. The judge also accepted unchallenged evidence that Mr Filippini operated the trust accounts without consulting Mrs Filippini.
The Appeal: The Question That Mattered
The appeal put a single, high-stakes question to the Full Court. Can a court freeze discretionary trust assets to secure a judgment debt when the debtor controls the trust, even though the debtor holds no direct beneficial ownership stake?
At the hearing, the appellants made a striking concession. As appointor of the A and M Trust, Mr Filippini could:
remove the trustee and appoint himself,
distribute all trust income to himself,
accelerate the vesting date, and
direct the entire capital of the trust to himself.
The FPC Vic Trust deed is in identical terms, so the same powers apply there. The R and D Trust deed differs slightly, but the substance of the control position is the same.
The appellants' argument ran like this. "Assets of the debtor" means assets beneficially owned by the debtor. As a matter of orthodox trust law, a discretionary beneficiary has no beneficial interest in trust property, so the rule simply could not reach these assets. And even if the rule stretched beyond beneficial ownership, they argued, Keystone had to show a good arguable case that, after judgment, it could compulsorily access the specific assets being frozen. Keystone had never spelled out that pathway, they said, so the orders should fall away.
The Decision
The Full Federal Court dismissed the appeal on 22 May 2026. In doing so, it confirmed a principle with real teeth: creditors chasing judgment debtors cannot be defeated by debtors who hide assets inside family trusts they control.
The Court's reasoning turned on two key holdings.
1. Expectancies are assets. The Court held that r 7.35(5) of the Federal Court Rules is not limited to ownership, tracing the language back to Jackson v Sterling Industries and Cardile v LED Builders. It accepted that a discretionary beneficiary's expectancy is not property owned in the usual way, but said that is precisely why the rule captures expectancies. The rule protects value by restraining the third party whose control could hollow that expectancy out. As the Court put it plainly, the order is not aimed at freezing the expectancy in isolation. It is aimed at freezing what supports the expectancy, meaning the trust assets in the hands of the trustee.
2. No rigid enforcement pathway is required upfront. The Court rejected the argument that an applicant must map out a precise enforcement route at the interlocutory stage. It read r 7.35(5)(a) and r 7.35(5)(b) as disjunctive; forcing an applicant relying on one limb to always articulate the other would collapse the structure of the rule. The Court still required utility, generally a good arguable case that the expectancy will be realisable in some way. On these facts, that was made out by reference to what a trustee in bankruptcy might do with the beneficiary's powers of appointment and rights connected to due administration.
Why This Decision Matters
This is a significant ruling for commercial litigation and insolvency practitioners. It establishes that corporate and family discretionary trusts are not impermeable shields. Creditors and liquidators can now look through complex trust structures to preserve assets where the debtor keeps practical control over them.
The takeaways:
Trust planning does not guarantee asset protection where the judgment debtor is also the appointor holding discretionary control.
Practical control is the critical factor, not simply whether someone is a beneficiary.
Freezing orders can now reach trust assets in appropriate circumstances.
For anyone relying on a discretionary trust to keep assets beyond a creditor's reach, the message from the Full Court is unambiguous: control cuts both ways.