
Estate Disputes & Possession: Theocharous v Theocharous [2025] NSWSC 45
Mar 19, 2025The defendant, Harris Theocharous, was one of the deceased’s sons and had lived in the Bankstown property for over 20 years. He claimed that his mother had made promises allowing him to remain in the home for life. Based on this, he commenced family provision proceedings seeking a Crisp order, which would grant him a life estate or alternative rent-free accommodation. [See our earlier blog in relation to Crips orders here]
Andrew, as executor, sought to sell the property to finalise the estate administration. Harris opposed the sale and refused to vacate, leading Andrew to commence separate possession proceedings.
Main Issues Considered by the Court
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Was Harris entitled to remain in the property based on proprietary estoppel?
- Harris claimed that the deceased had made verbal assurances that he could live in the property indefinitely.
- He argued that these assurances gave rise to a life interest in the property through proprietary estoppel.
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Could Harris prevent the executor from selling the property?
- Harris had lodged a caveat over the property, asserting an interest based on the alleged promise.
- He later allowed the caveat to lapse and did not seek an injunction to prevent the sale.
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Was Harris’ family provision claim a valid defence to the possession proceedings?
- Harris’ primary claim for continued occupation was made in the family provision proceedings, not in the possession proceedings.
- The court had to determine whether the family provision claim affected Andrew’s right to possession.
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Who should bear the costs of the proceedings?
- Andrew sought costs against Harris, arguing that the possession claim was necessary due to Harris’ refusal to vacate.
- Harris contended that his legal costs should be paid out of the estate.
The Court’s Consideration and Decision
Claim for Possession
The court ruled that as the registered owner of the property in his capacity as executor of the estate, Andrew was prima facie entitled to possession. Harris had no legal or equitable interest in the property that would justify his continued occupation.
- Harris abandoned his proprietary estoppel claim during the hearing, meaning there was no basis for him to argue a life estate.
- His family provision claim was still pending, but the court found that it did not justify delaying possession.
- Harris did not seek an injunction to prevent the sale, nor did he contest the possession proceedings with substantive evidence.
Accordingly, the court granted possession to Andrew and issued a writ of possession, giving Harris 28 days to vacate.
Costs Orders
The court made several key rulings regarding costs:
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Harris to pay Andrew’s costs of the possession proceedings
- The general rule that costs follow the event applied.
- Harris’ refusal to vacate meant the possession claim was necessary.
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Estate not responsible for costs
- Harris argued that Andrew’s costs should be paid from the estate.
- The court rejected this, stating that Andrew was acting properly as executor.
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Indemnity costs from 30 January 2025 onwards
- Andrew had made a formal offer of compromise (which included that Harris' costs would be paid for by the estate), and if Harris had accepted that offer, he would have avoided a costs order against him.
- Harris rejected the offer, so the court awarded indemnity costs against Harris for the period after the offer expired. Indemnity costs refer to a higher scale of legal costs that a losing party is ordered to pay when their conduct during litigation justifies a departure from the usual "party/party costs" order. Under rule 42.5 of the Uniform Civil Procedure Rules 2005 (NSW), indemnity costs cover all reasonable legal costs incurred by the successful party, rather than just the standard costs considered necessary or fair. They are typically awarded in circumstances where the losing party’s conduct has been unreasonable, improper, or imprudent.
Key Takeaways for Executors and Claimants
This case reinforces several important legal principles in estate administration and possession disputes:
- Executors have a duty to finalise the estate – If a property is to be sold for estate administration, beneficiaries cannot delay the process without legal justification.
- Family provision claims do not automatically prevent possession orders – A claim for additional provision from an estate does not, in itself, create a legal interest in estate property.
- Proprietary estoppel claims require strong evidence – If a person asserts a right to property based on verbal promises, they must provide clear evidence and pursue proper legal avenues (e.g., maintaining a caveat and seeking an injunction).
- Rejecting a reasonable settlement offer can be costly – Courts may impose indemnity costs if a party refuses a fair offer and then loses in court.
Conclusion
The Supreme Court’s decision in Theocharous v Theocharous underscores the importance of following proper legal procedures when disputing estate administration. While Harris may still pursue his family provision claim, his failure to substantiate an interest in the Bankstown property resulted in an adverse possession ruling and a significant costs order. Executors dealing with resistant occupants should take note of this case when managing estate property disputes.
Contact the Shire Legal team if you have any questions.
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