Theocharous v Theocharous

1. [1]

   By a notice of motion filed on 17 October 2025, the respondent seeks security for his costs of the appeal in the amount of $40,000 pursuant to Uniform Civil Procedure Rules 2005 (NSW) (UCPR) r 51.50(1).

Background

1. [2]

   By her will, the late Finikou Theocharous left her residual estate consisting largely of the family home to be divided equally between her five children including the appellant. The value of the residual estate was $1,360,496.72. That amount does not include legal costs paid by the estate or amounts that it is or might be entitled to recover from the appellant.

2. [3]

   Following the appellant’s divorce, the appellant lived with his mother in the family home from the early 2000s until about 2022, when his mother moved into a nursing home. He has no assets of his own. It appears that on occasions he worked as a tiler, but he was largely dependent on unemployment benefits and later a carer’s pension. He now receives a disability pension. He has a gambling problem which appears to have consumed what money he had.

3. [4]

   The appellant refused to move out of the home following his mother’s death. Ultimately, an order for possession was made in favour of one of the appellant’s brothers as executor of the estate so the house could be sold: see Theocharous v Theocharous [2025] NSWSC 45. The appellant was ordered to pay the executor’s costs of those proceedings. The appellant currently has no permanent residence.

4. [5]

   In separate proceedings, the appellant made an application for provision under Chapter 3 of the Succession Act 2006 (NSW). That application was dismissed by Parker J: see Theocharous v Theocharous (No 2) [2025] NSWSC 660 (J2). In addition, his Honour made an order that the appellant reimburse the estate in the amount of $42,544. That liability arose from a loan that the deceased had made to a local real estate agent, which the appellant had purportedly collected on the estate’s behalf but had not paid to the estate.

5. [6]

   Taking into account an offer of compromise, his Honour also ordered that the appellant pay the estate’s costs on the ordinary basis up until 8 July 2024 and on an indemnity basis from 9 July 2024.

6. [7]

   As a result of those orders, the respondents’ solicitor, Mr Angelo Andresakis, estimates that the appellant owes the deceased estate an amount of $314,920 made up of the following amounts:

7. [8]

   The result is that, absent a successful appeal, the amount the appellant owes the estate exceeds the amount of his bequest.

Grounds of appeal

1. [9]

   The notice of appeal identifies six grounds of appeal. Two relate to what is said to have been a misapplication by the trial judge of the rule in Browne v Dunn (1893) 6 R 67, although those grounds of appeal do identify how the rule was misapplied. Two grounds relate to factual findings made by the trial judge. One concerns the extent to which the appellant made improvements to the family home while living there. The primary judge ultimately concluded at J2[147] that it was not possible to make definitive findings about the degree of work undertaken by the appellant, although his Honour expressed scepticism about the appellant’s claimed financial contribution. The other concerns a finding by the primary judge that the deceased promised the appellant that he would have a life tenure at the family home as “highly implausible” (J2[163]). A fifth ground is that “the learned trial judge erred in law in the application of the test under Section 59 of the Succession Act 2006 (NSW)”. The sixth relates to the order for indemnity costs.

Relevant principles

1. [10]

   UCPR r 51.50(1) gives the Court power to order security for costs of an appeal in “special circumstances”. The relevant principles relating to an order for security under UCPR r 51.50(1) were summarised in these terms by Basten JA (with whom Ipp JA and Hoeben J agreed) in Preston v Harbour Pacific Underwriting Management Pty Ltd [2007] NSWCA 247 at [18]:

2. [11]

   The comments of Emmett J in Dye v Commonwealth Securities Limited [2012] FCA 992 at [28] are also relevant. There his Honour said:

Consideration

1. [12]

   In this matter, the appellant does not take issue with the quantum of the security sought. However, he submits that security should be refused because if it is ordered, it is likely to stifle the appeal. The respondent takes issue with that contention. He submits that the appellant failed to establish that other family members who have provided the appellant with assistance in the past, for example, would be unwilling to fund the appeal. He also submits that unless security is ordered the estate will not be able to recover its costs of the appeal if it is successful because the appellant’s bequest has already been exhausted, with the result that other beneficiaries will, in effect, have to bear the costs of the appeal.

2. [13]

   I have concluded that this is an appropriate case in which to order security. Although it is neither possible nor appropriate for the Court to embark on a detailed consideration of the appellant's prospects of success on appeal, it seems to me that on the face of the notice of appeal and the primary judge’s judgment, they appear to be weak. The only grounds that are clearly identified are the two grounds concerning factual findings. But one of those factual findings does not appear to have been critical to his Honour’s conclusions. Both factual findings depended in part on the benefits the primary judge had in observing the appellant give evidence. Moreover, the primary judge gave detailed reasons for rejecting the appellant’s evidence which on their face seem compelling.

3. [14]

   The evidence establishes that the appellant will not be able to pay any costs order against him. Moreover, those costs will in effect have to be borne by the other beneficiaries. The evidence before the primary judge was that at least one of those was also in difficult financial circumstances, although not as extreme as those of the appellant. In this respect the comments of Emmett J in Dye appear to be particularly apposite.

4. [15]

   Lastly, it is relevant to observe that the appellant’s financial position has in part at least been brought about by his own conduct in resisting the order for possession, with the consequence that the other beneficiaries were denied any part of their inheritance and, in effect, misappropriating and dissipating money that belonged to the estate.

5. [16]

   Taking those matters together, in my opinion, they establish special circumstances in this case. I accept that the result of ordering security may be to stifle the appeal. Normally, that would be a compelling reason for refusing security. But in this case, that consideration is outweighed by the considerations that favour an order for security.

6. [17]

   The respondent suggested that security could be ordered in tranches. However, I do not favour that approach. The amount of security is not great. If the true position is that the appellant is unable to raise security, it is in the interests of both parties that that fact is known sooner rather than later.

7. [18]

   Accordingly, the orders of the Court are:

   1. (1)

      The appellant provide security for the respondent’s costs of the appeal in the sum of $40,000;

   2. (2)

      The security in order (1) be provided within 28 days either by payment of the amount into Court or by the provision of a bank guarantee that is acceptable to the respondent;

   3. (3)

      If the appellant fails to comply with orders (1) and (2), the proceedings against the respondent be stayed until such time as the security is provided;

   4. (4)

      If after a further 28 days, the appellant fails to provide the security referred to in orders (1) and (2), the appeal be dismissed;

   5. (5)

      The appellant pay the respondent’s costs of the notice of motion filed on 17 October 2025.