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The motion arose against the background of disputes about the late Finikou Theocharous’s estate. Her will divided the residual estate equally between her five children. The judgment records its value as $1,360,496.72, excluding legal costs paid by the estate and amounts it might recover from the appellant ([2]).

The appellant had lived in the family home for many years. After his mother moved into a nursing home, he remained there following her death. Possession proceedings ultimately resulted in an order for possession in favour of one of his brothers, acting as executor, so the house could be sold. The appellant was ordered to pay costs in those proceedings and had no permanent residence at the time of the security motion ([3]-[4]).

In separate family-provision proceedings under Chapter 3 of the Succession Act 2006 (NSW), the appellant’s application was dismissed. The primary judge also ordered him to reimburse the estate $42,544 in relation to a loan made by the deceased, which the appellant had purportedly collected on the estate’s behalf but not paid to it. The primary judge made costs orders, including indemnity costs from 9 July 2024 ([5]-[6]).

The respondent’s solicitor estimated that the appellant owed the estate $314,920, including $54,920 for an amount owed to his mother and interest, $60,000 in costs from the possession proceedings, and $200,000 in costs from the family-provision proceedings. The latter costs orders were the subject of the appeal ([7]). The judgment records that, without a successful appeal, the estimated amount owed exceeded the appellant’s bequest ([8]).

The appeal notice raised six grounds, including complaints about the rule in Browne v Dunn, factual findings concerning the appellant’s work on the house and an alleged promise of life tenure, the application of s 59 of the Succession Act, and indemnity costs ([9]). Ball JA did not determine those grounds. The question before him was whether security for the appeal costs should be ordered.

Why the court decided this way

The governing power was UCPR r 51.50(1), which allows an order for security for appeal costs in “special circumstances” ([10]). Ball JA relied on the summary of principles in Preston v Harbour Pacific Underwriting Management Pty Ltd, including that impecuniosity without more will usually be insufficient and that security will usually not be ordered if it would stifle a bona fide and reasonably arguable appeal. The principles also recognise that an apparently hopeless, unreasonable or harassing appeal may support security, and that the subject matter or public interest may weigh against an order that would stifle an appeal ([10]).

The judgment also referred to Emmett J’s explanation in Dye v Commonwealth Securities Limited that an appeal differs from an original claim because a court has already made an adverse determination. Where a respondent faces a substantial risk of being unable to recover costs if successful, the appeal may impose that cost on the opposing party without a realistic prospect of recovery ([11]). Ball JA said those comments were particularly apposite because the appellant would not be able to pay a costs order and the resulting costs would effectively be borne by other beneficiaries ([14]).

The Court considered the appeal prospects only at a preliminary level. Ball JA said it was neither possible nor appropriate to examine them in detail on the security motion. Nevertheless, on the face of the notice of appeal and the primary judge’s reasons, the grounds appeared weak ([13]). He noted that the clearly identified grounds concerned factual findings, one of which did not appear critical to the primary judge’s conclusions. Both findings partly depended on the primary judge’s opportunity to observe the appellant giving evidence, and the primary judge had given detailed reasons for rejecting that evidence ([13]). This was not a final determination that the appeal would fail.

The appellant’s inability to pay was not considered in isolation. Ball JA also took account of the source of that financial position. He observed that it had been brought about “in part at least” by the appellant’s conduct in resisting the possession order and by conduct involving money belonging to the estate ([15]). This observation formed part of the combined assessment, rather than a standalone rule that a litigant’s conduct automatically warrants security.

The Court expressly accepted that security might stifle the appeal. It considered that ordinarily a compelling reason against security, but concluded that, in this case, the competing considerations outweighed it ([16]). The reasoning was therefore fact-specific: the Court balanced the potential loss of an appeal against the apparently weak grounds, the likelihood of unrecoverable costs, the burden on other beneficiaries, and the appellant’s role in his financial circumstances.

Ball JA declined the respondent’s suggestion that security be paid in tranches. He considered $40,000 “not great” and said it was in both parties’ interests to learn sooner rather than later if the appellant could not raise it ([17]).

Before and after state of the law

The judgment presents the security-for-costs principles as already established, drawing on Preston and Dye. It does not announce a new statutory test or state that it changes the general law. The relevant rule is UCPR r 51.50(1), with “special circumstances” as the stated threshold ([10]).

Before this decision, as described in the judgment, impecuniosity alone would usually not be enough. The fact that an order might stifle an appeal would generally weigh strongly against security where the appeal was bona fide and reasonably arguable. But those considerations did not operate as inflexible rules: the court was not to fetter its consideration of what may constitute special circumstances, and the appeal’s apparent character and the likely recovery of costs could matter ([10]-[11]).

After this decision, the principles remain those the judgment attributes to Preston and Dye. Theocharous illustrates their application to a particular combination of circumstances. Ball JA found special circumstances where the appeal appeared weak on a preliminary reading, the appellant could not meet a costs order, others would effectively bear the costs, and the appellant’s financial position was partly linked to his own conduct in related proceedings ([13]-[16]). The decision does not establish that any one of those factors, on its own, is sufficient.

The underlying family-provision appeal grounds included an alleged error in applying s 59 of the Succession Act ([9]). However, this judgment does not analyse the substantive requirements of s 59 or decide whether the primary judge applied that section correctly. Its treatment of the family-provision case is relevant background to the security application, not a substantive ruling on family provision.

Key passages with plain-English translation

At [10], the judgment sets out the Preston principles. In plain English, security is not automatic merely because an appellant has little money. The court considers the circumstances as a whole. A potentially credible appeal that security would prevent from proceeding will usually weigh against ordering security, while an apparently hopeless or unreasonable appeal may weigh in favour.

At [11], the judgment refers to Dye’s distinction between a first-instance claim and an appeal. The point is that, on appeal, there has already been an adverse court determination. If the respondent wins again but cannot recover costs, the expense may fall on the respondent or other affected parties. Ball JA considered that concern relevant here because the evidence indicated that the appellant would not be able to pay ([14]).

At [13], Ball JA limits what the Court was doing: it was not conducting a detailed merits hearing. Its observations that the grounds appeared weak were preliminary, based on the appeal notice and primary judge’s reasons. The paragraph identifies features that informed that preliminary view, including the nature of the factual grounds and the primary judge’s reasons for rejecting the appellant’s evidence.

At [15], Ball JA says that the appellant’s financial position had “in part at least” been brought about by his conduct in the possession dispute and in relation to estate money. In plain English, the Court treated the causes of the appellant’s impecuniosity as relevant, rather than viewing inability to pay as a neutral fact detached from the litigation history.

At [16], the balancing conclusion is explicit: security might stifle the appeal, but the Court found that concern outweighed by the factors supporting security. This is the central explanation for why security was ordered despite the possible effect on access to the appeal.

At [18], the orders specify the consequences. Security of $40,000 was due within 28 days, by payment into Court or a bank guarantee acceptable to the respondent. Failure to comply would stay the proceedings against the respondent until security was provided. If security remained unprovided after a further 28 days, the appeal was to be dismissed. The appellant was also ordered to pay the costs of the security motion.

What fact patterns trigger this precedent

This decision is most directly relevant to security-for-costs motions on appeal under UCPR r 51.50(1), where the court is asked to assess “special circumstances”. Its factual combination is important: the appellant was unable to pay an adverse costs order; the respondent argued that the shortfall would effectively be borne by other estate beneficiaries; the appeal grounds appeared weak on a preliminary reading; and the appellant’s financial position was found to have been caused in part by conduct in related proceedings ([12]-[16]).

The case also addresses the competing concern that security can prevent an appeal from proceeding. Ball JA accepted that risk and still ordered security because of the other circumstances ([16]). It may therefore be useful when analysing how a court can weigh stifling against recovery risk and the apparent strength of grounds, but it does not say that the risk of stifling is unimportant or that it is always outweighed.

The judgment does not support treating poverty, a weak appeal, unpaid costs, or conduct in earlier proceedings as automatically decisive in every case. The Court emphasised a combined assessment and relied on the particular evidence before it. It also did not decide the substantive merits of the appellant’s grounds, including the challenge involving s 59 of the Succession Act.

How later courts have treated it

The supplied judgment contains no later judicial treatment of Theocharous v Theocharous [2025] NSWCA 243. It cannot establish from this source whether later courts have followed, distinguished, applied or criticised it.

The authorities that the judgment itself discusses are Preston v Harbour Pacific Underwriting Management Pty Ltd [2007] NSWCA 247 and Dye v Commonwealth Securities Limited [2012] FCA 992. Ball JA set out the principles summarised in Preston and considered the reasoning from Dye relevant to the risk of unrecoverable appeal costs ([10]-[11], [14]). Browne v Dunn is mentioned only because two appeal grounds alleged its misapplication; the security judgment does not decide that issue ([9]).

The two related Supreme Court decisions, Theocharous v Theocharous [2025] NSWSC 45 and Theocharous v Theocharous (No 2) [2025] NSWSC 660, are described as background to the possession and family-provision disputes ([4]-[6]). The supplied material does not provide enough information to assess how those decisions have been treated beyond their role in the factual history.

Still-open questions

The judgment does not determine the appeal’s merits. It does not decide whether the primary judge misapplied Browne v Dunn, made reviewable factual errors, erred in applying s 59 of the Succession Act, or was wrong to award indemnity costs. Those matters remained grounds of appeal when the security motion was decided ([9], [13]).

Nor does it formulate a numerical threshold for when an appeal is sufficiently arguable to make stifling decisive. Ball JA expressly declined to conduct a detailed prospects assessment ([13]). The judgment’s references to weak grounds should be read within that limited procedural setting.

The decision also does not say how the analysis would change if there were evidence that family members could or would fund the security. The respondent argued that the appellant had not shown that family members who had previously assisted him would be unwilling to provide funding, but the judgment’s reasoning and result were based on the matters it identifies at [13]-[16] ([12]).

Finally, the judgment does not state a general rule about the significance of financial circumstances caused by a litigant’s own conduct. It identifies that feature as one part of the particular case’s special circumstances ([15]-[16]). How much weight it would carry in a different factual setting remains dependent on the evidence and the court’s assessment under r 51.50(1).

This is general legal information, not legal advice. Zoe can make mistakes. Before acting on, relying on, or using this analysis, have it checked by a qualified Australian lawyer.