Forster v Forster [No 2][2022] QSC 52

SUPREME COURT OF QUEENSLAND

1. [1]
   The respondent is the applicant’s step-mother.  The applicant is one of three children of his father’s first marriage.  The respondent has two children from her first marriage.  There was no child of the marriage of the respondent and the applicant’s father. 
2. [2]
   After they married, the applicant’s father and the respondent entered into an agreement, known as a mutual wills agreement (‘MWA’), in pursuance of which they agreed to execute wills which would provide for the property of the first of them to die to pass, absolutely, to their survivor; and then, upon the survivor’s death, to their five children and step children equally.  
3. [3]
   The applicant’s father was the first spouse to die and the respondent inherited his estate in accordance with his mutual will.  Under their MWA, the respondent was free to use up the inherited property (within certain limits) to preserve the lifestyle to which she was accustomed and to provide for her health and aged care.
4. [4]
   More than once after his father’s death, the applicant asked the respondent to disclosure her financial position to him.  She refused.  The applicant brought an application seeking an order that she do so, under section 8 of the Trusts Act 1973 (Qld).  On 8 March 2022, I dismissed his application: see Forster v Forster [2022] QSC 30.  Speaking broadly, it was my view that the applicant misunderstood the “constructive trust” authorities upon which he relied in support of his application. 

5. [5]
   The respondent asked for her costs on the indemnity basis.  I called for written submissions on the issue.
6. [6]
   An order for costs on an indemnity basis is warranted where a litigant has engaged in unreasonable or irresponsible conduct; or where there is something about the facts and circumstances of the case – for example, a special feature beyond the demerit of an unsuccessful litigant’s case – to call for such an order: see Di Carlos v Dubois & Ors [2002] QCA 225.  
7. [7]
   The respondent relied in part on the well-known judgment of Sheppard J in ColgatePalmolive Company v Cussons Pty  Limited (1993) 118 ALR 248 which sets out circumstances which may be considered to warrant the exercise of the discretion to award costs on an indemnity basis (although the circumstances in which such an order may be made are not closed). 
8. [8]
   The respondent submitted that the applicant ought to pay her costs on the indemnity basis because the application: (a) involved the “wilful disregard of clearly established law and groundless contentions”; or (b) was made with an ulterior motive.  (These were circumstances listed in Colgate-Palmolive.)
9. [9]
   Also, aligned with (a), the respondent referred me to rule 700A(2)(b)(iii) of the Uniform Civil Procedure Rules 1999 (Qld) and invited me to take into account the applicant’s pursuit of what she contended were “unmeritorious issues” as permitted by that rule.
10. [10]
    The respondent pointed to paragraphs [39], [40], [49], [50] and [198] of my reasons in support of her contention that the application had been unreasonable or unmeritorious or groundless.
11. [11]
    At [39], I made the point that the applicant’s submissions had not addressed, in any meaningful way, the pre-requisites to an order under section 8 of the Trusts Act 1973 (Qld).  I elaborated on that point in paragraph [40].  At [49] and [50], I observed that the cases upon which the applicant relied did not address the issues raised by the application.  At [198], I referred to an argument made by the applicant which revealed a misapprehension of the role of equity.
12. [12]
    The applicant submitted that there ought not to be an order that he pay the respondent’s costs on the indemnity basis.  He said that he had not completely disregarded established law in bringing his application.  He referred me to certain respected Trusts texts which – at least at face value – contained conflicting statements about constructive trusts in the context of mutual wills, one of which appeared to support his application. 
13. [13]
    I acknowledge that certain parts of the academic texts in this area, and certain parts of the cases and paper upon which the applicant relied at the application, appear to support the applicant’s application, at least on a superficial reading.  However, as explained in my judgment, upon their careful analysis, they do not. 
14. [14]
    One might have expected the applicant to have interrogated more closely the authorities upon which he relied before bringing this application.  And reliance on a paper presented at a seminar is no substitute for research.  But I am not prepared to find that the arguments made in support of the application involved a wilful disregard of clearly established law.  Nor did they involve the pursuit of an unmeritorious issue.  I acknowledge that a person in the applicant’s position has an interest in the way in which an estate, which might ultimately pass to him, might be preserved or diminished. 
15. [15]
    Although my judgement contained statements about the shortcomings of the application, there was nothing about those shortcomings which warranted an order for indemnity costs.  From my point of view, the applicant took a less than ideal approach to the matter – but that does not mean that it was unreasonable to bring the application.  Nor does that mean that the matter was prosecuted unreasonably.  Indeed, as I noted at [51] of my judgment, in my view, the approach of both parties to the application was too simple.  There was more to it than the question whether the respondent was a constructive trustee of the property she inherited. 
16. [16]
    As to (b), the respondent suggested that the application was brought for an ulterior motive.  She pointed to certain correspondence and submitted that the applicant’s motive was to try to force her into a negotiation with him, with a view to his receiving his inheritance before she died.  She said it was “clear from the way in which the Applicant approached this application that it was a personal attack on the Respondent and an attempt to force her to negotiate paying money to him now”.
17. [17]
    The applicant submitted that I ought not to infer an ulterior motive from his “commercial offer” (in correspondence) to avoid unnecessary fighting in the future.
18. [18]
    I am not prepared to find an ulterior motive in the bringing of the application.
19. [19]
    The correspondence to which I was referred revealed a desire on the part of the applicant to get his money “now” and his failed attempts to persuade, if not force, the respondent to mediation.  The tone of the correspondence was, at times, infelicitous

and is not to be encouraged.  The threats contained in it, about forcing the respondent to disclose her financial position, reflected a misplaced confidence in the strength of the applicant’s legal position.  But that is why he failed in his application.  Neither the tone of the correspondence nor the threats contained in it were, in my view, so unusual as to warrant an order for indemnity costs.

20. [20]
    Also, while it was clear that the applicant was hostile towards the respondent, by the time of the hearing, he had withdrawn any suggestion of her breaching the MWA.  He remained suspicious of her – and probably always will.  However, I did not consider the application to involve such an express personal attack upon the respondent as to warrant an order for indemnity costs.  
21. [21]
    For the reasons above, in the exercise of my discretion, I order the applicant to pay the respondent’s costs of the application on the standard basis.