Reggi v Reggi Investments Pty Ltd

Enyo Lawyers for Mr Reggi, the applicant in both proceedings

Aitken Whyte Lawyers for Ms Reggi, the second respondent in BS 3945/25 and the respondent in BS 3947/25

[1] On 16 December 2025, I gave judgment dismissing two originating applications filed by Mr Reggi.[1] The parties have now filed written submissions on costs.

[2] By the first of the dismissed applications, filed in proceeding BS 3945/25, Mr Reggi sought leave pursuant to s 237 of the Corporations Act 2001 (Cth) to bring proceedings on behalf of Reggi Investments Pty Ltd against Ms Reggi to recover the sum of $65,000 she took from that company's bank account (Derivative Application).

[3] By the second of the dismissed applications, filed in proceeding BS 3947/25, he sought a direction under s 96 of the Trusts Act 1973 (Qld) as to whether he would be justified in bringing an application to remove Ms Reggi as trustee of the G&M Discretionary Trust (G&M Trust), and commencing proceedings against Ms Reggi for breach of trust (Judicial Advice Application).

[4] Mr Reggi filed both applications in circumstances where he and Ms Reggi had separated on 30 May 2025 and had thereafter engaged in correspondence (through their respective family law solicitors) about pre-action procedures before family law proceedings could be commenced.

[5] After Mr Reggi had filed the applications in this court, Ms Reggi commenced proceedings in the Federal Circuit and Family Court of Australia (Division 2) (FCF Court) seeking a division of the matrimonial property pool pursuant to s 79 of the Family Law Act 1975 (Cth) ('Family Law Act').

[6] Both applications were dismissed because I accepted Ms Reggi's submission that the FCF Court was the appropriate forum to hear and determine the issues which Mr Reggi sought to agitate.

[7] In those circumstances, Ms Reggi submits that Mr Reggi should be ordered to pay her the costs of both applications. She contends that there is no reason to displace the general rule that costs follow the event.[2] She also submits that the orders she seeks are warranted in circumstances where Mr Reggi filed the originating applications even though Ms Reggi had explained on several occasions that the issues ought to be ventilated in the family law proceeding.

[8] Mr Reggi submits for different orders in each application.

[9] As to the Judicial Advice Application, Mr Reggi submits that, pursuant to UCPR r 700, submits the court should order that the parties' costs be paid from the assets of the G&M Trust. Rule 700 provides that in circumstances where a person sues or is sued as a trustee then, unless to court orders otherwise, the party is entitled to have costs of the proceeding that are not paid by someone else paid out of the fund held by the trustee.

[10] As to the Derivative Application, Mr Reggi submits that no order as to costs should be made or, alternatively that the costs of that application should be left to be determined by the FCF Court as part of the family law proceedings.

[11] As Mr Reggi submits, r 700 reflects the general principle that a trustee is entitled to indemnity out of the trust estate for expenses properly incurred in the administration of the trust.[3] If legal costs are not properly incurred, the court will make an order otherwise than that the trustee is entitled to have the costs of the proceeding paid out of the trust fund. The underlying principle is that a trustee is expected not to engage lightly in litigation that will or may incur costs that will diminish the trust property. The trustee is only to do so if the circumstances justify it.[4] Accordingly, the critical question is whether or not the conduct which gave rise to the burden of costs was proper in the sense of having been reasonably, as well as honestly incurred.[5]

[12] There is no suggestion that Mr Reggi acted dishonestly in commencing and pursuing the Judicial Advice Application. There is an issue, however, as to whether he acted reasonably in doing so.

[13] Although the family law proceedings in the FCF Court had not been filed when Mr Reggi filed the Judicial Advice Application, it should have been apparent to him from Ms Reggi's correspondence that such proceedings would be filed when the pre-action procedures had been attended to. Further, it should have been apparent to Mr Reggi that Ms Reggi accepted that the issues the subject of the Judicial Advice Application needed to be resolved. She did not seek to resist such resolution. She simply sought to have the issue resolved in the same forum that broader issues affecting the distribution of the matrimonial property pool would be determined. Her position was vindicated by the dismissal of the Judicial Advice Application. Against those matters, Mr Reggi advanced no compelling justification for bringing the Judicial Advice Application as a step towards ventilating the breach of trust issue in a separate proceeding from the family law proceeding.

[14] Given the circumstances in which Mr Reggi commenced and persisted with the Judicial Advice Application, and the basis upon which that application was dismissed, I consider that his costs of the application were not reasonably incurred. That is a basis why the court should order otherwise than as provided for in r 700.

[15] Further, I do not accept Mr Reggi's submission that the order he submits for is consistent with the reasons for the dismissal of his applications in that it would effectively allow the claims for costs to be adjusted and determined as part of the determination of the FCF Court as to what is a just and equitable distribution of the matrimonial pool of assets.[6] The question whether Ms Reggi is liable for breach of trust is one that might have been determined by either this court or the FCF Court but, for the reasons set out in my principal judgment, I concluded that the FCF Court is the appropriate forum to resolve that issue. The issue of the costs of the Judicial Advice Application is different. It is not an issue which should or could be resolved by the FCF Court as easily as in this court. Rather, the costs fall to be determined by this court in the exercise of its jurisdiction in determining the Judicial Advice Application. In identifying and valuing the matrimonial property pool, the FCF Court will have to take account of a liability created by any costs order made in this court. However, that is not a basis on which to conclude that the FCF Court, and not this court, should determine the parties' liability for costs relating to an application argued in and determined by this court.

[16] In those circumstances, I can see no reason why the usual rule as to costs should not apply.

[17] My reasoning in [14] applies equally to the costs of the Derivative Application. I do not accept Mr Reggi's submission that claims for costs in respect of the Derivative Application should be determined by the FCF Court on the basis that such claims form part of the matrimonial property pool to be adjusted in the family law proceedings. The FCF Court will be required to take account of liabilities created by costs orders made in this court, but that does not displace the need for this court to exercise its jurisdiction to determine the costs of an application which it has heard and determined. That determination is to be made by reference to the outcome of the Derivative Application itself. It does not depend upon the FCF Court's determination of the issues that Mr Reggi would have sought to have this court resolve if the relief he sought in the Derivative Application had been granted.

[18] Finally, for similar reasons to those already set out in [13], I do not consider that Ms Reggi's conduct in filing the family law proceedings after Mr Reggi had filed the Derivative Application, or in not bringing an application to transfer the Derivative Application to the FCF Court, should disentitle her from having the benefit of the usual costs order.

[19] In both the Judicial Advice Application and the Derivative Application, I will order that Mr Reggi pay Ms Reggi's costs of and incidental to the proceeding on the standard basis.

[1] Reggi v Reggi Investments Pty Ltd [2025] QSC 343.

[2] Uniform Civil Procedure Rules 1999 (Qld), r 681; Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72, 98 [67].

[3] Coral Vista Pty Ltd v Halkeas [2010] QSC 449, [40]-[41].

[4] Park v Whyte (No 3) [2017] QSC 230; [2018] 2 Qd R 475, 491 [56], [58].

[5] Adsett v Berlouis [1992] FCA 368; (1992) 37 FCR 201, 211-212.

[6] Reggi v Reggi Investments Pty Ltd [2025] QSC 343, [31], [52] and [53].